When you move to Spain you will be faced with a new set of tax rules that will have significant impact on your savings and investments. What was tax efficient in the UK is unlikely to be tax efficient for you in Spain. They may feel like a safe option, but tax efficient plans in the UK such as ISA’s and UK investment bonds will no longer provide you with the same tax benefits when you become resident in Spain – even winnings from Premium Bonds are taxable. Worldwide bank interest is taxed as savings income in Spain and if you receive UK rental income this could be taxed in both the UK and Spain.
With the introduction of Common Reporting Standards your information can be passed seamlessly between providers and tax authorities and disclosure of all investments and income is essential to avoid punitive measures from the Spanish tax office.
The good news for you is that there are tax efficient investments available to Spanish tax residents where capital can grow free of tax which will allow you to maximise returns from your investments and minimise your tax liability.
As cross border financial planning experts we are here to help you transition your investments from the UK to Spain in the most tax efficient way and to manage these assets on your behalf over the longer term.
Tax planning becomes more complicated when you move to Spain. You now have to deal with the tax rules in both UK and Spain, the way they interact and then ensure that you pay the right tax in the right country.
Our tax planning experts are here to provide cross border tax planning advice to help ensure that you do not pay more tax than necessary. As a resident of Spain you will need to be aware of the implications of Capital Gains Tax, Wealth Tax and most importantly Inheritance Taxes as well as Tax on your Savings and Investments.
British nationals will be unfamiliar with Wealth tax which was reinstated in Spain in 2011. This could affect you as a Spanish tax resident if the value of your worldwide assets exceeds the tax-free threshold. Our experts can help you structure your assets in a way that helps to minimise the impact of this tax.
Inheritance tax can be particularly problematic for British Expatriates. Most UK nationals will retain their UK domicile when they move abroad which means that their worldwide assets will be subject to UK Inheritance tax. This will always be likely unless you sever all connections with the UK and can demonstrate that you have no intention to return. In addition to a liability for UK tax your beneficiaries may be subject to succession and gift taxes on Spanish assets or assets passing to Spanish residents. Spanish succession tax is extremely complicated and the tax calculation depends not only on the relationship between the beneficiary and the deceased but also in which autonomous region of Spain the beneficiary lives.
Elsewhere we have already mentioned the impact of tax on your retirement and investment plans. If you are intending to move to Spain or have already moved or even if you are planning to return to the UK it is essential for your financial well-being that you discuss opportunities to limit your tax exposure with our expert cross border financial and tax planners.
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