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Financial Planning Spain - Living in Spain and looking for a tax efficient investment?

Fiduciary Wealth Team

Why should you consider a Spanish tax wrapper? Well with this type of arrangement you can defer all taxation on your savings until you make a withdrawal and then only pay tax at capital gains rate on the growth element of your investment.  In practice this could mean a tax rate in single digits on your savings as the following example shows:

Investment

300,000

Value after 5 years

450,000

Withdrawal required

60,000

2/3rds deemed

1/3 rd deemed

capital = 40,000

growth= 20,000

(no tax)

Tax on 6,000 @ 19% plus additional tax @21% on 14,000

4080

(taxable)

Effective tax rate on funds withdrawn

6.80%










          Tax is paid directly to Hacienda by your provider ensuring that you do not have any problems with the local tax authorities and there are a broad range of fund options available to suit every risk appetite. In addition this type of arrangement is currently outside of the scope of the EU savings directive which applies to all types of income producing investments including bank deposits and your plan may potentially be structured in a way to mitigate Spanish succession taxes.

How does this compare with your present arrangements? Are you spending more than 183 days in Spain without declaring yourself a tax resident fearful that your savings are going to be heavily taxed? Have you created expensive offshore companies or structures in an attempt to avoid tax and which might now come under the scrutiny of a revised EU savings directive? Have you left money invested in products that are tax efficient in the UK without realising this may no longer be the case whilst resident in Spain?

Whatever your circumstances, doesn’t it make sense to review your current investments to ensure that these are not only tax efficient based on your current residential status but that they also meet your current and future investment objectives? Knowing that you or your client’s have a fully compliant investment makes it a lot easier to sleep at night!

For an initial discussion speak to one of our financial planners Spain on +350 200 50982 or email wealth@ fiduciarywealth.eu.