Neighbour has rented out our property abroad without permission!

I think you need to get a Spanish solicitor asap.

Bear in mind that the non-resident “deemed income tax” is payable annually whether you receive rental income or not. It’s calculated on the rateable value of the property. It’s another thing that a Spanish tax adviser can help you deal with.

Considering he collects in cash and hasn't been there for years he might be just about to collect a bundle.

Oh my God.

Unless you have lived/rented in Spain you do not understand.

All transactions are in cash. It is SO common, simply because NOBODY can be implicated. Let alone OPs father who has received no money for at least 4 years.

Tax is not the worry at all.

I have just spoken with a Spanish lawyer who has advised a letter before action be sent to the neighbour and take things from there. The ultimate aim would be to get the contract with the tenants annulled - if there even is one.

Eek do you think that's a good idea OP considering it sounds like your dad has been taking money and not declaring it for tax in either Spain or the UK? I imagine you could open quite the can of worms and end up much worse off.

At the moment he hasn't 'lost' money as such, he's just not profited from the horrible neighbour pocketing rental money. Still awful but no money 'lost'. Whereas legal processes will cost money and could end up exposing the fact your dad hasn't declared income and may need to make tax repayments = real money lost and trouble caused.

I would think hard about which course of action has the most potential risk vs potential reward.

@unsurebut this all sounds so complicated!! It's a shame it's not straightforward for June but best wishes with getting this sorted.

I had my landlady in mind. We have a valid contract. So yes, I would take her to the cleaners. But bearing in mind this owner is renting not paying any tax on the proceeds or declaring the property a rental apartment, has he drawn up a contract or is it by word? I wouldn´t want to be in his shoes if the tenants get difficult. He needs legal advice and playing it cool. No locks being changed, at least without giving the tenants a copy.

Your dad can simply deny ever receiving anything, so i doubt tax etc is a worry.

The taxation rules for non residents that aren’t part of the EU is complicated- I think if you rent the property even just for a week of two a year that you have to pay an annual tax of a set amount - if it’s not declared a rental property and you are caught you could be fined and owe back taxes. So if your dad has been dealing with cash and not filing in the tax forms in Spain you could be between a rock and a hard place. I’d maybe bring up this element with the Spanish lawyer too in case it changes anything.

My partner’s dad used to rent out his apartment in Spain for just 2 months a year but decided it would cost him a lot to continue doing this when the rules changed and Brexit happened. It sounds like the taxes are high for non resident landlords and complicated!

So for 3-4 years your dad hasn't had a bundle of cash, but you have no idea how much renting has gone on in this time?

Given that your dad is potentially exposed I wouldn't have suggested initiating legal proceedings but I see you've done it now.

Good luck OPs dad 🙏

The tax situation is going to be extra-complicated to sort out because non-resident owners of Spanish property have to pay Spanish tax on their rental income at a flat 19%. That tax can then be deducted from whatever they might owe HMRC after adding the rental income to their UK income, but it has to be paid first.

This means that if push comes to shove with the neighbour, he could report your Dad to the Spanish tax authorities for having taken the money in cash. Or (perhaps more likely), if you call the police to try and get the tenants out, the police might well ask what has been happening on the tax front too.

OP, I feel bad for you inheriting this situation, but it does rather feel as if your Dad tried to bend the rules and may be about to have to deal with the consequences of that.

It wasn't my suggestion.

That's an appalling suggestion. The tenants are presumably paying rent in good faith. I really hope you never become a landlord if that's your attitude

The tenants have presumably agreed the rental in good faith. Suggestions to "get the heavies" onto them are dreadful.

At this point you don't know what was agreed between your dad and his neighbour as there's nothing written down. How reliable is your dad's memory? Does he speak fluent Spanish, does the neighbour speak fluent English? If not, there might be complete misunderstanding as to what's been agreed.

What does seem clear is that your father has agreed to the property being rented out without the relevant paperwork and licences, and hasn't declared/paid tax on the rental income. This clearly started before he became incapacitated so he knew what he was doing.

I'm sorry you're having to pick up the pieces but I'm even more sorry for the poor tenants.

Depends whether they have a legal rental contract. Also, many parts of Spain require rental licence numbers so if they don’t have this could be illegal renting. Huge number of issues. They need legal advice asap

If you can find a group of heavies to clear the house in the night with absolutely no consequences then I'm pretty sure you could do this.

Course you would. 😂

He probably hasn't, and that is the crux of the matter (well, one of them).

He has received what sounds like, very little money (cash) in the last 4 years.

Any money transaction in cash has to be proved and it cant.

This is SO common. I would not worry about tax. I really wouldnt. Its a whole different kettle of fish here.

Good its a flat and not a house. Makes it easier. Do you have the name of the "president of the building"? (There will be one)

My DP's would consult a notaire in France if they did what your dad did. If they're anything like Spanish lawyers they're usually fair good at their jobs and things are straightforward.

I wouldn't rush to listen to a few posters advice here re squatters and you'll never be able to evict them.

I remember actually... friends of DPs in France had a swimming pool (we have one too) and NDNs of their used to regularly come and use it whilst they were away, sometimes with permission and sometimes not. The friends had to tell them after a while they didn't want them to use the pool (usually the children) because of safety reasons. They put up CCTV but we did the same, our NDNs are farmers and very wealthy people with their own pool but better safe than sorry.

So your Dad has been evading tax on rental income for years!

I'd have loved investigating this one when I worked at HMRC Compliance............