Spain

If you are an expatriate living in Spain or are thinking or moving to Spain there are a number of things to consider. Top of the list should be whether or not your finances are in order.

Spain along with a lot of Europe is going through austerity plans that are giving rise to additional taxes or increased taxes. However by utilising Spanish tax compliant solutions much of your savings and wealth can be protected and legitimately structured to pay the least amount of tax possible.

Things to consider are:

What happens to my savings/assets on death?

For residents of Spain, Spanish Succession law applies to your worldwide assets and unlike UK inheritance tax, it also applies when assets are passed to your spouse. This also applies to lifetime gifts.

Are my current savings and investments tax efficient?

Many expats moving to Spain often hold PEP’s ISA’s. Premium Bonds etc. However whilst these are excellent products for a resident of the UK, they are not recognised under Spanish Law and therefore are not a tax efficient savings or investment solutions and liable to tax in Spain at the highest rate. Better Spanish compliant solutions are available through well-known international organisations that will save tax and should you require mirror your existing investment selection.

In addition if you are holding an offshore bank account in an offshore centre such as the Isle of Man or Jersey, a tax charge of 27% could apply on the interest received under the account.

Is the UK the best home for my pension now I’m resident in Spain?

For many their pension is the largest asset after their home, therefore careful thought should be given to ensuring the tax efficiency and safety of your pension fund. Once a pension fund in the UK enters a state of income drawdown, the fund will be taxed at the rate of 55% on death, when passing the benefits to the nominated beneficiaries as a lump sum regardless of your residency status at the time. What’s more pension income can be taxed in the UK even if you are resident in Spain. This may mean paying tax at a higher rate in the UK then you would in Spain.

Professional, regulated advice should be sort in all circumstances.

Contact us today on +34 9650 60689 for a FREE initial consultation. Many of our clients prefer to deal with us over the phone and email, or if you prefer we can arrange for one of our local advisers to make contact. We have advisers covering mainland Spain, the Balearics and the Canaries.

FREE Tax Guide for Spain
Download our free guide to QROPS
Spain Seminars
News