It will not have escaped your notice that both HMRC and the Spanish tax authorities are on the warpath and are targeting British expatriates in particular.
From a Spanish perspective anyone spending more than 183 days in Spain in any one tax year is deemed resident and as such should be paying their taxes there. Anyone with money deposited in an offshore or UK bank where the registered address of the account holder is in Spain will likely find that the Spanish tax office will start an enquiry into the residency status of that person using electricity consumption records and other information to pin point whether or not they should be paying tax in Spain. Of course an investigation on one front can often trigger a more in depth review of a person's financial circumstances.
HMRC too have been quick to identify expatriates as a source of tax leakage, knowing full well that if an individual is not liable for tax in their new country of residence then they should remain tax residents of the UK and therefore be taxed accordingly.
The message from both tax authorities is that there is no longer a place for the €financial nomad€ who traditionally sidestepped contact with either tax office. In truth this practice was never going to be sustainable particularly in times of austerity with tax revenues in sharp decline.
Wouldn't it make sense to properly review your financial situation to ensure that you are paying the correct amount of tax in the right jurisdiction and that you are benefitting from all the tax breaks you are entitled too? Many expatriates rely on pensions and investment income and to be living in Spain but still hold these savings in the UK can often be detrimental to your financial well being. For example did you know that by transferring your UK private pension to a QROPS, which is only available to non UK residents, can mean significantly reducing the amount of tax rate you will pay on the income that you draw (often as little as 3%) as well as potentially saving a 55% tax liability on the value of your fund when passed to beneficiaries?
If you have savings in a UK investment bond or tax wrapper these can often be deemed as non compliant by the Spanish authorities meaning an annual tax liability whether withdrawals are made or not. Compare this to an investment product designed specifically for expatriates living in Spain where growth is virtually free of tax and regular withdrawals can be made at very favourable tax rates.
These are just some of the ways you can benefit by ensuring that your residency and financial planning are correctly aligned. Of course to consider the options available you need to engage with an adviser who can provide you with true cross border financial advice and who understands both the tax rules and the financial products available in each country. Fortunately Fiduciary Wealth Management is well positioned to do just that with offices in Spain and central London and a team of advisers ready to assist. Contact them now on 00350 200 50982 or email wealth @fiduciarywealth.eu.
From a Spanish perspective anyone spending more than 183 days in Spain in any one tax year is deemed resident and as such should be paying their taxes there. Anyone with money deposited in an offshore or UK bank where the registered address of the account holder is in Spain will likely find that the Spanish tax office will start an enquiry into the residency status of that person using electricity consumption records and other information to pin point whether or not they should be paying tax in Spain. Of course an investigation on one front can often trigger a more in depth review of a person's financial circumstances.
HMRC too have been quick to identify expatriates as a source of tax leakage, knowing full well that if an individual is not liable for tax in their new country of residence then they should remain tax residents of the UK and therefore be taxed accordingly.
The message from both tax authorities is that there is no longer a place for the €financial nomad€ who traditionally sidestepped contact with either tax office. In truth this practice was never going to be sustainable particularly in times of austerity with tax revenues in sharp decline.
Wouldn't it make sense to properly review your financial situation to ensure that you are paying the correct amount of tax in the right jurisdiction and that you are benefitting from all the tax breaks you are entitled too? Many expatriates rely on pensions and investment income and to be living in Spain but still hold these savings in the UK can often be detrimental to your financial well being. For example did you know that by transferring your UK private pension to a QROPS, which is only available to non UK residents, can mean significantly reducing the amount of tax rate you will pay on the income that you draw (often as little as 3%) as well as potentially saving a 55% tax liability on the value of your fund when passed to beneficiaries?
If you have savings in a UK investment bond or tax wrapper these can often be deemed as non compliant by the Spanish authorities meaning an annual tax liability whether withdrawals are made or not. Compare this to an investment product designed specifically for expatriates living in Spain where growth is virtually free of tax and regular withdrawals can be made at very favourable tax rates.
These are just some of the ways you can benefit by ensuring that your residency and financial planning are correctly aligned. Of course to consider the options available you need to engage with an adviser who can provide you with true cross border financial advice and who understands both the tax rules and the financial products available in each country. Fortunately Fiduciary Wealth Management is well positioned to do just that with offices in Spain and central London and a team of advisers ready to assist. Contact them now on 00350 200 50982 or email wealth @fiduciarywealth.eu.
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