Hamiltons Financial Services SL
Are not registered with the Spanish Financial Services to sell or give financial advice.
Hamiltons Financial Services operates from La Cala de Mijas in Málaga Province selling or offering investments, insurance products, equity release and mortgage plans.
Hamiltons does not appear to be registered or authorized by the CNMV, DGS or Banco de España. They recently sold a totally inappropriate equity release plan to a British couple falsely claiming that it mitigated Spanish inheritance tax.
Hamiltons earned a considerable sum of money in commission on the transaction.
Hamiltons Equity Release with Rothschilds
Mr. & Mrs. B retired to Spain and bought their dream house in the Andalucian countryside. Living modestly, and with no mortgage to pay,
their pensions, hers from a bank and his from the Prison Service, seemed perfectly adequate.
They responded to an advert in a local magazine warning about “Inheritance Tax – the Spanish Bombshell.” A representative of the company duly called on them. Without asking any questions about their financial or tax positions, other than to ascertain that they owned the house entirely, he launched into a sales pitch which was designed to frighten them. He clearly succeeded.
The pitch was basically that their house was lovely and increasing in value all the time and that when one of them died, the other would face a crippling bill in Inheritance Tax. And when the second one died, the bill would become even more substantial. He suggested what he described as a straight forward way of avoiding this tax altogether. This would involve taking out a mortgage on the house, and investing the proceeds in an offshore investment bond. As the bond would be untraceable by the Spanish Tax Authorities, the house would then appear to have a substantial debt attached, reducing the amount of IHT.
To Mr. & Mrs. B. this seemed a clever plan and despite never having heard of the company they were reassured that the lender would be a reputable name, Rothschilds. They were also delighted to hear that their house had nearly doubled in value in the four years since they had bought it. They duly entered into an agreement, without being told:
- there was “no cooling off” period
- fees, commissions and charges would add up to a staggering 28,000euros, taken out of the 250,000euro mortgage.
- The investment bond had substantial penalties up to the fifth year.
- If the value of the bond was insufficient at termination, they could lose their house.
- The lender had rights not only over the property, but also over the bond.
- The company, Hamiltons, was not registered nor regulated by the Spanish Authorities.
The calculation of IHT used by the salesman showed a “market value” of the house of 350,000 euros and a resulting tax bill of over 90,000 euros. In fact, the method used by the Spanish Tax Authority, Hacienda, is based upon the rateable value of the property. Using their method, the tax bill on the first death would be 13,000 euros and the total less than 40,000 euros. So in order to avoid these more manageable debts, in the first month the B’s paid 28,000euros! And put the security of their house at risk!
''We are informed that Spanish Inheritance Tax should be €3,350 tax on the first death even taking the taxable value of the whole property to be €350,000 (and it is highly likely that the true taxable value was less than that). We have not taken into consideration the tax on the second death.''******************
Amazingly, Hamiltons also failed to establish that Mr. & Mrs. B. had no dependants or other family, and did not know to whom they would leave the house anyway!
Sadly, at the age of 56, Mrs. B. died of an asthma attack. A family friend telephoned Hamiltons to inform them. When asked by the friend why this financial product should be sold to a couple with no dependants, Mr. Duncan Moulder of Hamiltons became rude and abusive and hung up.
This type of story is now common in Spain. For more information, visit www.costa-action.co.uk