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The benefits of using an international pension for expats in Spain Image

The benefits of using an international pension for expats in Spain

March 31, 2021

What to be aware of when looking at Spanish taxes for expats through the establishment of an offshore pension arrangement. 


5000 miles of beautiful coastline, world-famous beaches, spectacular mountain ranges, unique cuisine, and a wonderful Mediterranean climate; it is no wonder people choose to spend their retirement in Spain.


However, when moving to Spain or living in Spain, it is vitally important to have your financial affairs including any pension arranged in a manner that benefits you whilst an expat in Spain and provides sufficient flexibility should you eventually leave.


The rest of this article will look at some of the benefits that international pensions provide to expatriates who have made Spain their home.


Asset Protection:

It takes time and effort to build your wealth with many hours of hard work. Therefore, for the most of us, we can simply not afford to lose this money as we do not have the time, opportunity, or the energy to rebuild it. International pensions provide a solid legal foundation that protect ones saving from claims against one’s wealth and protects your wealth from the very moment your funds are contributed.  Asset protection is not only vital for claims arising from an individual or company attack, but the risk of an unforeseen catastrophic decision made by a government can deplete one’s wealth overnight. We saw this happen in 2012/2013 in the Cyprus banking crisis. Take a moment to think if your financial affairs would withstand an attempted attack on your estate?



Having money and having access to it are two different things. International pensions provide both a safe home for your wealth and gives you a very flexible environment from which to access lump sums, regular payments, annuities, or a combination of these. This means you can tailor your pension benefits to meet your need for both regular income and capital. This flexibility is important as your pension can cater for changing circumstances in life. To put this into perspective, it is not as easy to plan 10 years down the line and life can change in a blink of an eye due to health, family circumstances and external economic and legal reasons.



Research has shown that many expatriates will move to a destination like Spain, and enjoy the sun, beach, golf and life that it offers. However, there comes a point where they would like to be closer to family which could mean returning home after many years or finding themselves in a country that had not been envisaged. An international pension provides mobility and caters for such outcomes without the need to restructure your wealth.



When we pass away, we generally want our wealth to pass in a seamless manner to our spouse or dependants. However, without succession planning the consequences of passing away in a foreign country may have dire financial consequences for your beneficiaries. This is a highly complex matter and the laws that apply will be determined by the country in which you are resident at the time of your passing, your country of birth and the jurisdictions in which you may hold accounts.  International pensions address all these complexities and remove the need for foreign wills, probate, and executors. Importantly they also mitigate the many estate and death taxes that can apply as well as other cross border complexities. The result is peace of mind for you and those left behind as the pension assets transfer seamlessly in a short space of time to those to whom you want it to go. 



The Spanish tax authorities have designed their tax laws to favour those with retirement income which is certainly the more efficient form of income in Spain. In addition, there is no tax on the growth of the investments while it is in your pension which further enhances the pension over time. International pensions therefore enable expatriates to take advantage of Spain’s preferential tax treatment of retirement income. With solid tax planning you can get the most out of your pension savings.


In conclusion, an international pension offers a highly efficient vehicle to hold and protect one’s wealth, whilst also benefiting from Spain’s favourable tax laws designed to attract and support retirees with their retirement planning. In addition, it provides the seamless passing of wealth without the need for foreign wills or the complexity of cross border issues ensuring that those left behind are taken care of in an efficient way providing peace of mind to all.


It is always advisable to receive pension advice from reputable firm of pension advisers on who understand the local tax rules and are able to structure your pension plan tax efficiently in Spain.


If you are a British expat in Spain with savings outside of a pension plan, you should seek pension advice from a financial adviser at Fiduciary Wealth about the benefits of establishing an international pension arrangement.


At the end of the day, it is important to make the most of what you have both for your benefit and those that rely on you.


Ryan Levy | International Business Consultant
BCom in Financial Management & Certifcate in International Trust Management
Overseas Trust and Pension


Overseas Trust & Pension is a specialist provider of international trust, retirement and pension solutions for both corporate and private clients.

Our aim is to meet the strategic financial requirements of clients while our focus is to protect, preserve and enhance client wealth. We achieve this by offering a broad range of award winning financial solutions catering for income, accumulation and succession of wealth from one generation to the next.


More on how we can help with your tax planning: https://www.financialplanningspain.com/what-we-do/our-services/tax-planning