The difference in taxes in Spain and those in the UK can be daunting for many British expats but ignoring these can create issues in both countries.
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 in Spain, Spain Wealth Tax and most importantly Inheritance Tax in Spain as well as Income Tax in Spain including on your Savings and Investments.
We have many years of experience providing tax planning advice to Brits in Spain. We are able to guide you through Spanish taxation and help you arrange your financial plans more tax efficiently from both a UK and Spanish tax perspective.
There are many distinctions in taxation between Spain and the UK.
British nationals will be unfamiliar with Spainish 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 planning can be particularly problematic for British expatriates. Most UK nationals will retain their UK domicile for a period of time after moving abroad and some may inadvertently remain UK domiciled which means that their worldwide assets are subject to UK Inheritance tax. This may occur if all connections to the UK are not severed and the individual is unable to demonstrate that they had no intention of returning to the UK. 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 tax 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. The potential liability to Spanish succession taxes therefore depends entirely on the value of your estate and where you reside in Spain. There might not be a liability.
You may have been used to tax friendly investment wrappers in the UK, such as ISAs, what you may not know is that ISAs, are not tax efficient in Spain.
We have already mentioned the impact of tax on your pension and investments. If you are intending to move to Spain or have already moved or even if you are an expat returning to the UK it is important that you discuss your tax affairs with one of our financial advisors to maximise the tax planning opportunities and reduce your tax exposure.
The good news is that there are options to legitimately reduce your exposure to excessive taxes in Spain which is why talking to a tax planning expert could be invaluable for you. We will assess your existing financial plans to provide constructive, tax planning advice and structure your pension, savings and investments tax efficiently in Spain.