Get the right to move: Organize your visa
Pensioners are classified as “economically inactive”. That is, there are additional requirements compared to people of working age.
Since Brexit, there are new and stricter rules. There are two types of visas to obtain the right to live in Spain: “non-profitable visas” and “Golden visas in Spain”.
Non-profitable visas require proof of your financial resources to pass the income check and then apply for one year. At the time of renewal, this visa is valid for another two years.
Brevins Frank estimates that the cost of a visa is £ 3,500 for a couple. This is split into an application fee of £ 516, with additional costs for medical checks, criminal checks, statutory stamps, and document translations.
Golden visas are more expensive, but instead of investing a significant amount of money in local property or investing in the economy, Britons can get flexible residence rights in many EU countries. The cost of the application is 5,000-6,000 euros each time.
To meet the requirements for real estate investment, you need to buy one or more real estate worth € 500,000.
Other investment options for Golden Visa include buying at least € 2 million in Spanish bonds, buying € 1 million worth of shares in a Spanish company or a Spanish venture capital fund, or € 1 million in a Spanish bank. Includes making a deposit.
When applying, it is important to get all the information correctly. Jason Porter of Blevins Franks said: Not only do you have to start the process over, but you also have to come up with more cash for new applications. “
Insights into Spanish tax law
Anyone planning a move must consider the financial and tax situation before moving. Otherwise, you run the risk of facing large charges.
UK tax-effective investments such as Isas and venture capital trusts are not subject to the same tax treatment abroad. In Spain, interest, dividends or capital gains resulting from these investments are taxable.
For pensions, the income earned from the pot is taxed where the person lives. Therefore, it is taxed in Spain, not in the United Kingdom. The only exception is the civil service pension, which is taxed only in the UK.
Importantly, the 25pc tax exemption pension cash rules no longer apply, Porter said. Even 25pc is taxable as there is no tax exemption factor for pension funds in Spain. Those who plan in advance may want to receive tax-exempt cash before moving.
Anyone planning to sell a family home in the UK after moving can be prosecuted. Porter said: “Most countries have some form of major housing tax exemption, so there is no capital gains tax at regular events, but UK rules are very different from Spanish rules. Selling is taxable in the UK. It may not be an obligation, but it may be in Spain. “
Similarly, anyone planning to postpone the sale of a UK business until they leave to avoid the UK capital gains tax is likely to find that it will be taxed in Spain, he added. rice field.
Spain, like other European countries, has taxes that do not exist in the UK, such as exit taxes and wealth taxes. This means that expatriates will need to fill out additional tax returns. Assets around the world must file a wealth tax if they exceed € 2 million.
Foreign assets in excess of € 50,000 must also be declared, otherwise severe penalties may be imposed.
Inheritance and wealth taxes in Spain vary by region. Inheritance and wealth taxes are reduced by 100% in some areas, such as Madrid, while death taxes of up to 34% are levied in others.