Question 1

Do I need Financial Advice when I move to Spain?

Accepted Answer

This very much depends on your situation, however the majority of those that relocate and become a tax resident in another country would benefit discussing their circumstances with a qualified adviser, preferably one that lives locally and understands the rules and regulations in that country.

Question 2

What sort of areas can they assist with?

Accepted Answer

Many of the products that you hold in the UK simply aren’t going to benefit you in Spain, products such as ISA’s, NS&I and UK Insurance Bonds are no longer tax efficient as a non-UK Tax Resident, however, there are products that are available in Spain that offer tax efficiency.

Question 3

What about my UK Pensions?

Accepted Answer

This is a complex area of advice and speaking to an adviser with knowledge and experience will really assist with this type of planning. There are options available to those that hold UK pensions to be able to structure them in a tax efficient manner when relocating abroad. The adviser will look at the existing schemes and then if required propose how the pensions can be managed in a cost affective and tax efficient way.

Question 4

Are you able to provide an example?

Accepted Answer

An example may be where a client is aged 55 or over but hasn’t taken their 25% Pension Commencement Lump Sum. As a UK Tax Resident this can be withdrawn from your pension tax free, however in Spain it’s not and tax may be due on the lump sum when added to other income in the year that it is taken. Therefore, it may be prudent to take it even if not required and then reinvest until such time that the funds are needed.

Question 5

What other benefits are there?

Accepted Answer

It’s often the case that people have more than one pension, often they have built up on average 6 policies over their lifetime so it may be that by transferring the pensions into one pot may be cost effective and this often provides a better overall return. There are various options available and the adviser will provide a detailed analysis of the existing schemes to see if a transfer is in the clients best interest.

Question 6

I have savings in a UK Bank Account, what should I do with these?"

Accepted Answer

It is very much dependent on the value held and what your objectives are with what you hold. If the funds that are held are more your short-term needs, then looking at options regarding how you can increase your returns and reduce the tax payable will be beneficial. There are a range of products that allow you to invest for income of growth and in Sterling or Euros. They can be adapted to your risk profile and level of income that you require.

Question 7

Can you tell me about the Modelo 720?

Accepted Answer

The Modelo 720 is a requirement to report assets held outside of Spain and is a declaration of assets held as of 31st December of each year. If you hold more that the equivalent of €50,000 in either Cash, Investments or Property that are held outside of Spain then these assets will require reporting if you are a Spanish Tax Resident. However, it is possible with the right advice to hold investments in products that are compliant with the Spanish tax authority negating the need to complete the Modelo 720. Again, this requires advice from a regulated advisory company.

Question 8

Can’t I just keep my UK Adviser?

Accepted Answer

Unfortunately not, before BREXIT it was possible for a UK adviser in some circumstances to continue to look after a client that had moved abroad if the advisory company had FCA passporting rights into that country. However, no allowance for this was made under the withdrawal agreement meaning that a UK Adviser can no longer continue to provide advice within Europe. It is also fair to say that the majority of UK Advisers wouldn’t know or understand the products and local taxes in Spain and could therefor unwittingly cause the client additional tax issues.

Question 9

What are the costs to receiving advice on both savings and investments?

Accepted Answer

The costs for advice are in line with those that you would expect to pay your UK financial adviser, any fees that you will need to pay will be fully explained to you at the outset. It is proven that those receiving the correct advice can save themselves unnecessary taxes and also ensure that their capital grows, is safe, secure and tax efficient.

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