Expat Tax Planning in Spain

Providing Spanish tax advice

The international tax service at Forth Capital provides high quality cross-border and Spanish tax advice for individuals moving to Spain, already living in Spain or purchasing property in Spain.

Our tax advisers are qualified Chartered Tax Advisers and members of the Chartered Institute of Taxation, who have specific expertise in Spanish taxation, with over 15 years of experience advising expatriates moving to and from the UK.

With our specialist knowledge of both the UK and Spanish tax systems, and how they interact, we can highlight opportunities to reduce your taxes whilst also ensuring you avoid the pitfalls.

Our Areas of Expertise

Residence Planning – you cannot choose where you pay your taxes.  This will depend on where you are resident and where your income and gains arise. It is therefore important to understand where you are a tax resident, as this may not necessarily be the country where you think you are resident.  We can guide you through the minefield that is the UK’s Statutory Residence Test and advise on Spanish residency rules and how both countries’ rules apply to your particular situation.  We may also need to consider the UK/Spain Double Tax Treaty to determine where you are resident.  If you are moving to Spain, or returning to the UK, we will advise you on the optimum time to leave or return to the UK, and your tax filing obligations in both the UK and Spain.

Spanish Wealth Tax – many Brits considering a move to Spain are uncomfortable with the idea of paying wealth tax and consider it to be an unfair tax.  However, depending on your circumstances and with the right planning, you are likely to be able to minimise the amount you pay.  It is important to note that the wealth tax rules differ in Spain depending on the particular region (Comunidad Autónoma) you live in, and many regions offer favourable reliefs and allowances.

Capital Gains Tax Planning – the Spanish Capital Gains Tax regime changed from January 2015, reducing the maximum rate for residents of Spain to 24% but at the same time abolishing certain deductions that were previously available.  If you are moving to Spain, we will look at the optimum time to sell assets to mitigate your UK and Spanish liabilities, including advice on the reliefs and deductions available.  From 6 April 2015, the UK is introducing Capital Gains Tax on the sale of UK residential property by non-UK residents.  Seek advice if you will be affected by these new rules.

Income Tax Planning – we can advise on tax planning for all forms of income, including rental income, salary v dividends, investment income, share options and more.

Spanish Succession Law – Spain’s succession laws dictate how a certain portion of your assets is distributed on your death, with children being ‘reserved heirs’.  In most circumstances, these laws do not affect non-Spanish nationals although each case needs to be assessed separately.  In addition, when the European Succession Regulation comes into effect on 17^th August 2015, individuals will be able to elect for the laws of their country of nationality to apply to their estate on death.  We can advise you on the impact of these Regulations to your own particular circumstances and how to make an election.

Spanish Succession Tax – this is an inheritance tax, but it operates in an entirely different way to UK inheritance tax.  The tax is payable by the beneficiary and is dependent on the amount of inheritance that beneficiary receives and their degree of kinship with the deceased.  Substantial reliefs may be available for close family members.  However, the rules are different depending on which particular region (Comunidad Autónoma) you are resident in, so it is essential that you seek advice on the rules applying in your area.  Owing to the way in which Spanish succession tax operates, there are many ways of reducing this tax and we can advise you of your options.

UK Inheritance Tax – even if you become resident in Spain and live there for many years, you may still be liable to UK inheritance tax which is based on your domicile status not your residence status.  It can be difficult for an individual to change their domicile status.  However, there are circumstances where this will be possible, and we can advise on the steps you would need to take to achieve a change of domicile, and the tax benefits of acquiring a non-UK domicile.

Tax Efficient Investments – investments that are tax efficient in the UK may not be tax efficient in Spain.  We can advise you on the options available as a resident of Spain and how restructuring can help to reduce both UK and Spanish taxes.

Pension Planning – the UK’s pension rules have been evolving rapidly over the past few years.  We can help you understand how your UK pension will be taxed in Spain, and the options available to you, including advice on the Spanish tax treatment of QROPS.

What happens next?

Click here or on the green speech bubble icon to the right of the screen and fill in the online form, a member of our team will then contact you to discuss your situation.