The beginning of a new year is a good time to reflect on the next twelve months and review your financial planning, making sure it is up-to-date and aimed at protecting your family’s long-term assets.

For British citizens who live in Spain, it is important to know the different taxes that exist in Spain, as well as the regular changes in tax regulations that could affect British residents of Spain. Perhaps the greatest concern for many British residents in Spain has been Brexit and their consequent uncertainty about residency rights and medical care. On 8 December 2017, the United Kingdom (UK) and the EU submitted a joint “progress report,” confirming their commitment to maintain existing rights for EU citizens in the UK and British citizens in the EU. 

If you are already a permanent resident of Spain, rest assured that the regulations related to medical care will remain the same. If you are not yet registered as a resident of Spain, you will need to obtain official permanent residency before the UK’s date of withdrawal from the EU, scheduled for March 2019. If you are still deciding  whether to move to Spain, you should accelerate your plans and become a resident before March 2019.

 

 

 

 

Tax planning in Spain

It is always a good idea to review your tax planning periodically to confirm that it is correct. You should get professional advice to ensure that you take advantage of the tax planning opportunities available in Spain. The correct application of tax laws to your situation can allow you to keep most of your investments in one place and legally avoid paying too many taxes.

Beginning in January 2016, more than fifty countries, including Spain and the UK, began collecting data as part of the automatic exchange of information, implemented through the Common Reporting Standard. The first data exchange occurred in September 2017. Other nations will start sharing data in September 2018.

Tax planning for Spanish residents has many nuances, especially for those residents who earn income in one country and live in another. Get expert advice on how to benefit from Spanish tax regulations to ensure that you are in the best position to enjoy your life in Spain. Are you sure you are paying your taxes correctly? Specialised advice can give you peace of mind and save you money.

 

Savings and investments

In November 2017, the Bank of England raised the interest rate for the entire UK for the first time in more than ten years. As a result, keeping too much of your retirement savings in cash can now be risky, especially if you are not earning enough to keep pace with inflation.

A successful investment is about managing risk and obtaining the desired return, creating a well-planned strategy specifically based on your personal circumstances, time, needs, objectives and risk tolerance. You must obtain a clear and objective assessment and have adequate diversification of your investments so as not to overinvest in any one type of asset, country, sector or company. Your portfolio should be reviewed periodically, as the prices of assets rise and fall, which may cause your portfolio to become unbalanced.

 

Estate planning

It is important to review your estate planning after moving to Spain, since both the inheritance law and taxes work very differently than in Spain than in the UK.

In Spain the inheritance and gift taxes paid by heirs depend on the degree of kinship, the current wealth of each heir, the local norms in the corresponding autonomous community and whether the regional or state norms will be applied. There may be legal ways to reduce your tax liability.

 

Pensions

Spain’s current pension system has changed significantly in the past few years. Today there are more options available than ever before; therefore, it is essential to make the best decision for your goals and to protect your retirement savings. You should consider all your options, as well as the tax implications of those options in Spain and the UK, to determine the best solution for your particular situation.

Spain imposes forced inheritance. This can impede your ability to divide your equity as you wish. However, you can use the inheritance regulation of the EU’s Brussels IV to opt for the inheritance law of your home country if you must indicate this option in your will. We advise you to get advice to confirm that you are making the best choices for your family.

Reviewing your wealth management agreement once a year can be profitable and provide you with peace of mind. You should review the entire agreement as a whole, since the changes to one area could affect others. At Welex, we would be happy to assist you in establishing solutions tailored to your personal situation.

Do you have a company in Spain? It is important to comply with the presentation and registration of the accounting books in the company’s registry. Accounting books are the books where the accounting of your company in Spain is recorded. They may be mandatory or voluntary and are regulated in articles 25 to 33 of the Commercial Code.

The most frequently chosen way to present your company’s accounting books is digitally. They can be presented by means of a CD, with the information recorded to the company registry of the province where the registered office of your company is located. They can also be presented online. These files are prepared with the accounting programs available or with programs provided by the company registry in Spain.

Welex Law Firm provides tax and property management advice to Spanish residents. We have a wide knowledge of Spanish taxes and tax planning. We adopt a professional approach to provide you with correct tax advice. We deal with inheritance problems, investments and pensions, and we specialise in reducing tax payments on invested capital, pensions, wealth and inheritance. Contact our law firm for personalised advice.