Spain
The Spanish tax and legal system is very different from that in the UK and many other countries. Many people who have moved to Spain or are planning to do so inadvertently find it complex and potentially expensive from a tax perspective. What they often do not realise, however, is that they may be able to take advantage of Spanish tax compliant opportunities to protect their assets from the various Spanish taxes, so much so that they could end up paying less tax in Spain than in countries like the UK.
As with any wealth and estate planning, the starting point is to understand what the rules are and then establish if there are ways to minimise the personal impact of them and if you can use the rules to your benefit.
SPANISH TAX RESIDENTS
From a tax perspective, the starting point is whether you are Spanish resident or not. If you are a Spanish tax resident or you will become one then, in common with most other countries, you will be liable to Spanish income tax and capital gains tax on your worldwide income and gains. You may also be liable to Spanish inheritance tax if you receive an inheritance or gift as a resident of Spain. The rates of tax and the reliefs available can vary in Spain depending on whether the State rules or the rules of a particular Autonomous Community apply.
You may also still be liable to UK inheritance tax if you are a UK domicile. If both local and UK inheritances taxes are payable on the same assets, you will be able to credit the overseas taxes against the UK tax.
UK RESIDENTS WITH ASSETS IN SPAIN
If you are not Spanish tax resident or have chosen not to become a tax resident of Spain you will still be liable to Spanish inheritance tax on your Spanish assets. This results in many people paying –
- Inheritance tax in Spain on the first death, and
- Greater levels of combined UK and Spanish inheritance taxes
You will also be liable to Spanish capital gains tax if you sell your Spanish assets whilst UK resident, and withholding tax will be deducted at source in Spain.
For more information on Spanish taxes CLICK HERE to download our free tax guide to Spain.
Spanish succession law decrees how your assets should devolve upon your death, protecting any children of the deceased rather than the spouse. However, these rules may not apply to you if you are not a Spanish national, provided you have a Will valid under Spanish law.
WHY CHOOSE BLEVINS FRANKS?
- We have local offices and qualified advisers both throughout Spain and in the UK. This means we are able to provide initial and ongoing advice to help you reduce tax on your wealth and help you structure your assets in the most efficient manner, whether you are at the planning stages of moving to Spain, or you are already living in Spain, or if you are considering a return to the UK.
- Blevins Franks Financial Management Limited is authorised in the UK by the Financial Services Authority (FSA) for the conduct of investment and pension business. We are authorised to give advice in Spain through the EU Insurance Mediation Directive (IMD) – we are a UK company with offices in Spain. All our advisers in Spain are professionally qualified.
- We have first hand and up to date knowledge of the ever changing Spanish tax regulations, as well as the opportunities available to reduce your tax liabilities.
- We take a holistic approach to protecting your wealth as we are able to give you integrated advice covering your Spanish assets, your UK assets and any assets you own elsewhere.
- We provide a personal, ongoing, customer focused service and do not treat our clients as account numbers.
- So far we have been providing trusted services for over 35 years. We are here to guide you and your wealth today; in the future as your circumstances and objectives change, and eventually to help your spouse/partner and family when they inherit your assets.
The tax rates, scope and reliefs may change. Any statements concerning taxation are based upon our understanding of current taxation laws and practices which are subject to change. Tax information has been summarised; an individual must take personalised advice.
