London

#EmbraceSpain VII: hand in hand against adversity

The luxury real estate market in the United Kingdom has improved with Brexit and the presence of internationals (including Spaniards) has had no significant decrease despite the effects of an almost ten-year crisis.

Seven weeks have passed since our firm, Del Canto Chambers, developed the campaign #EmbraceSpain, during which we have been closely following economic and tax developments concerning the United Kingdom and Spain. We have been astonished by the election results in the United States with the election of Donald Trump as president –  it’s almost as like a Brexit round two, which we could name #USAExit.

The United Kingdom brought out some modifications last April to the tax on transmissions. These changes and the uncertainty generated after Brexit have demonstrated the need to make changes to the complex British tax system. That is precisely the position that the National Audit Office (NAO) adopted in its latest report.

However, not only do some sectors of the market not seem to resent the aforementioned events but they are recovering, which is good news for the British economy. This is the case for the luxury real estate market, which rose 16% this year compared to 2015, with a total of 6,684 operations. The bulk of this increase is concentrated in London, with a total of 4,238 operations (8% of the total), despite changes in Stamp Duty Land Tax (SDLT).

In Spain, the think tank of strategic studies, Elcano Royal Institute, has published the 2016 edition of its traditional report on the global presence of Spain. This document calculates the weight of our country (and 90 more) on an international scale through their own indicator called the Elcano Global Presence Index (IEPG).

Thus, according to this report, despite the enormous ravages of the economic crisis, Spain’s overall presencein the United Kingdom has dropped slightly by four tenths since 2010 but has remained stable throughout the period 1990-2015.

On a different note, our very own lawyer Raul Del Canto, published the second part of his analysis of the non-binding opinion in which the Advocate General of the Court of Justice of the European Union (CJEU), Paolo Mengozzi, issued last July on soil clauses.

In this opinion piece, the Italian court justified limiting the invalidity of these clauses by invoking, implausibly, public law to argue on a matter that is clearly confined to private law.

As for our participation, last weekend we participated in the XIII European Film Festival of Seville, with the premiere of the documentary film “The Keys of Memory“, produced by Almutafilm directed by Jesús Armesto. After the premiere there was a discussion in which, as well as the director, Leon Fernando del Canto participated in as executive producer and Mar García as the main actress. The documentary is a deep reflection on the theme of identity and the memory of the people, and how it affects the history of Andalusia.

We are also attending the 63rd edition of the Ondas Awards Gala, which reward the best works of the year in the field of radio, television and music. These prizes have been awarded since 1954 and are organized by the PRISA communication group.

To conclude, once again it seems that the UK has been able to resist against the consequences of Brexit and the Spanish economy is slowly rising from the ashes. These improvements far from mark the end of this period of “famous” uncertainty. We must therefore continue to fight not only to continue this positive trend, but also to keep the strong relations between both Spain and the UK.

Xavier Nova (@xavinova)

Director of Del Canto Chambers

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