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To Be or Not to Be That is the Question (Spanish Resident that is)?

Fiduciary Wealth Team

We receive many enquiries on this particular topic which is completely understandable. Whilst we were all in the UK, residency and residency issues probably never entered our heads but now we’ve moved to a new country we have to accept that we have to work with a new set of rules and plan our futures accordingly – otherwise we are never going to be able to “live the dream”.

I guess one of the reasons we all tend to steer away from this subject is fear and fear of the unknown. If we can remain as UK tax resident and maintain the status quo then we don’t have to confront our fears or change any of our existing arrangements and life can just carry on.

At this stage it is probably worth reminding you of the law in Spain.  If you spend more than 183 days in a calendar year in Spain (they don’t have to be consecutive) then you will more than likely be deemed to be Spanish tax resident which means that any tax efficient UK or offshore investments you hold may well be totally ineffective and will need to be disclosed to the authorities on the annual Modelo 720 declaration that all tax residents may have to complete.

There may be a few exceptions to the 183 day rule where you might be able to retain your UK residency but these are few and far between. In fact it is probably more likely that you might fall into the Spanish residency regime even if you don’t spend 183 days here, perhaps if your centre of economic interest is in Spain or if you have a spouse or dependent children based here permanently.

It’s worth reminding you here of that old phrase no pain, no gain. In my experience it is worth going through the pain of sorting out your affairs so that you can enjoy your new life in Spain knowing that your finances are re arranged appropriately to meet your new circumstances. Cross border financial planning is all about giving you the best of both worlds.

Residency is crucial and failure to understand and accept your proper residential status can lead to significant financial problems and penalties. From a financial planning perspective matching your investments and retirement planning to your true residential status is fundamental. 

To find out how you can make the transition from UK to Spanish tax resident in the most tax efficient way we would like to offer you a FREE private consultation (worth £500) to assess your current financial position and explain how our Spanish tax reduction strategies can help.  If you already have a clear understanding of your current situation we can offer a FREE tax planning assessment instead (worth £1,000). Just think you will be getting FREE advice on tax planning for Spanish residents as well as retirement, savings and wealth tax mitigation strategies.

We have all come to Spain for a better life let us help you make sure the tax man doesn’t spoil that. Call now on tel 951319727 or email enquiries@fiduciarywealth.eu.