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#EmbraceSpain XXXII: UK Elections and Negotiating Suspicion

#EmbraceSpain XXXII: UK Elections and Negotiating Suspicion

The British government and the opposition are launching proposals and measures for a general election that has momentarily taken the media focus off Brexit.

At Del Canto Chambers, we have focused this week on taxes and the British real estate market, sectors for which, in the face of the upcoming UK general election, measures and proposals have been developed.

The Labor party has proposed a tax increase for those earning between £80,000 and £150,000 a year. In addition, the HMRC has adapted the rules for the exchange of tax information to the digital environment (in the same line that is being followed in the EU as advocated by the Economic and Social Committee -CES-), the discount on wealth tax as increased by 50% to 60% to alleviate the crisis of housing availability and it has also suspended the application of income tax for entrepreneurs who rent a property.

On the other hand, a survey has shown that Britons would be willing to pay more for council tax to finance social assistance while, from the economic point of view, the services sector, construction and manufacturing are the Sectors that “pull the cart” of the UK economy.

The fight against international tax evasion continues and Google has been ordered to pay Italy about € 306 million for tax evasion in the period of 2002-2015, and the authorities of Gibraltar have met with the European Parliament in a committee on tax evasion.

In Spain we continue working with the claims placed by those UK nationals with properties in Spain affected by the floor clauses, while the Spanish government has estimated in 3,700 million euros the cost for the banks of removing these clauses.

As lawyer Claudio Rodríguez Vera states in an article published on our blog, the Supreme Court has issued a new ruling on floor clauses by which it tightens the material transparency requirements of such clauses and guarantees a case-by-case assessment. On this decision, Rodríguez Vera says: “The Supreme Court provides legal certainty by ensuring that each floor clause judicial process will have an independent assessment and sentence but, above all, it avoids the extra-judicial” filter “that the government approved in January in order to avoid collapsing  the courts, and which  damaged the consideration case by case, essential in the right exercise of law. “

In addition, the Provincial Court of Madrid has issued the first favorable ruling of the IRPH (the benchmark index of the Mortgage Loans), which opens the door for people with mortgages affected by this index to place their claims. Our Firm has already filed several lawsuits in this regard.

As for the real estate market, the Spanish government will subsidize young people with up to 10,800 euros to buy a house, in a context in which both, price (2%) and real estate acquisitions, (26.9%) have increased. On the other hand, the incentivization of buying  large properties to get the residence permit in Spain has not been so successful.

Crossing the Atlantic, Colombia’s investment expectations are growing in the country’s 108 customs-free areas, just when the United States has approved an aid package known as “Paz Colombia” with about 450 million dollars. In addition, tax collection in the country has grown 4.7% year-on-year only in the first months of 2017.

Lastly, Qatar, following the recent approval of a bill on VAT, which we analyzed in our blog, has created another rate, the selective tax, which will apply mainly to junk food and luxury items, as well as to those goods considered harmful to human health or the environment, such as alcohol, tobacco or sugary drinks.

The Qatari government continues with its policy of attracting foreign investment by strengthening its commercial ties, this time with Portugal, and it is standing out as the main point of arrival for community products to the common market that make up the Gulf countries.

Paradoxically, with a government that refuses to give priority to the “real Mediterranean corridor” by investing the funds received from the EU,  Spain is losing big business opportunities and job creation.  An investment that would allow all commercial maritime traffic from Asia and the Middle East to the EU to be unloaded at our Mediterranean ports, from Algeciras to Barcelona. This would make possible to reactivate all port activity, logistics and warehousing centers, the modernization of the rail network and road infrastructures, with the consequent generation of work and the location of a multitude of new companies.  It is such a necessary investment in this country, that, at this pace it seems sadly destined to be increasingly funded by the financial aids of the European community.

The upcoming general election in the United Kingdom, which Theresa May has described as necessary to provide more negotiating legitimacy vis-à-vis Brussels, has “frozen” each party’s actions, while awaiting the unfoldment of the events. These elections should not be used to generate mistrust between Britain and the European Union. In a recent survey polled by Político, most Britons believe that the EU might try to influence this voting. Neither should we be carried away by this opinion nor should we give reasons from Brussels for London to be suspicious.

You can follow our opinion on the development of international news in our blog and our social networks like Twitter, Facebook and Linkedin.

Xavier Nova (@xavinova)

Director of Del Canto Chambers

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