60-second interview with Patricia García Mediero

Monday, 05 October 2020
After COVID-19, wealth taxes will be firmly back on the agenda, says Patricia García Mediero.

What does your firm or organisation do?

Avantia Asesoramiento Fiscal y Legal is a boutique firm providing Spanish tax and legal advice and services to private wealth clients.

What has STEP done for you, individually, or as a business?

As a former winner of a Boutique Firm of the Year Private Client Award, it has given our firm visibility, market positioning and reinforced our brand of business.

What is the most important thing STEP does, in your opinion?

STEP is a unique platform for the dissemination of knowledge, thought leadership and best practice to professionals in the private wealth industry.

You are on the panel of our Thought Leadership web event on Wealth Taxes – the future of taxation in a post-COVID world on 23 October. Would you be able to give us a soundbite on what the main issues will be for the audience to take away?

In the post-COVID world, taxes will be on the rise. The idea of redistributing wealth as part of a renewed social contract to address the perception of growing social inequality, together with the need to meet exponential public funding requirements post-COVID, puts wealth taxes, including inheritance and gift tax, strongly back on the agenda.

Why would you recommend that practitioners attend this event?

The event will address the main issues affecting an individual’s exposure to wealth taxes: tax residence, situs-based rules, determination of values, typical exemptions or reductions, treaty protection (or lack thereof) and interaction with other taxes.

Can you comment on the impact of Spain’s wealth tax on the economy?

Wealth tax, while marginal in terms of overall tax revenues in Spain, has a very significant impact among private wealth clients. The current exemption operating in Madrid has resulted in a significant increase in intra-regional transfers of tax residence.

However, with the current exemption likely to be abolished, attention is now turning to securing business property relief. At a 2.5 per cent marginal tax rate, families with shares in operating groups are growing increasingly concerned about the impact this will have in their finances, and ultimately on their businesses.

Has it put people off investing in the country?

While the special regime for those moving to Spain does provide protection from the wealth tax, its increasingly restrictive application leaves many individuals exposed to the tax. This is one of the main areas of concern among potential incomers as well as those considering a substantial investment, such as a large holiday property.

Author block
Patricia García Mediero
Patricia García Mediero

Patricia García Mediero is Partner, Head of International Private Wealth at Avantia Asesoramiento Fiscal y Legal, Spain. Patricia is a member of the STEP Cross-Border Estates Special Interest Group Steering Committee.