Planning your retirement in Spain

Residence visas
Applying for legal residence in Spain now involves stricter requirements and more advance planning and paperwork. Retirees can apply for a Spanish non-lucrative visa, while if you have capital to invest locally, Spain’s Investor or ‘Golden Visa’ may be an option. While work visas can be harder to obtain, Spain has now introduced the Digital Nomad Visa.

The tax implications
You are a tax resident of Spain if you spend more than 183 days here a year, or if your centre of economic or vital interests is in Spain. Tax residence makes you liable for Spanish income, capital gains and annual wealth taxes on worldwide income and assets and subject to the succession and gift tax rules.

Timing your move to save tax
The Spanish tax year runs from January to December, whereas the UK is April to April. The two countries apply different capital gains tax rules and rates. Weigh up whether it is better to sell your UK assets as a UK or Spanish tax resident, then time your move accordingly.

Minimise tax in Spain
While Spanish taxation can look high, the tax regime presents attractive tax mitigation opportunities. The way you hold your assets can make a significant difference to how much tax you pay.

Pension options
For Spanish residents, most UK pensions are taxed in Spain, not the UK, but government service pensions are an exception. Pension lump sums are fully taxable in Spain. There are various options on how to take your UK pensions, so seek regulated advice to do what is right for you.

Your savings and investments
This is the time for a fresh review of your savings and investments. Ensure your portfolio is suitable for you today, has the right currency mix, is designed to meet your aims and risk appetite, and has adequate diversification to reduce risk.

Estate planning
Spanish inheritance tax works very different from UK’s. Spain also restricts who you can leave assets to, though you can plan ahead to get round this.

A helping hand
It pays to do your research but taking specialist cross-border advice will prove invaluable. Find a firm who can advise you for the longer-term – on all these various aspects – from your planning stages in the UK throughout your new life in Mallorca.

Keep up to date on the financial issues that may affect you on the Blevins Franks news page at www.blevinsfranks.com