ChiFRA

Many readers are enjoying their retirement years here in Spain, taking advantage of all the benefits living in Southern Spain has to offer.  You are reaping the rewards of all your hard work advancing your career, perhaps building up and selling a business, and the effort you put into accumulating your savings, investments and pension funds.  Some readers may have inherited capital, which has helped them achieve the dream of moving here.

In his eighth Budget as Chancellor of the Exchequer, George Osborne announced very few changes that are likely to affect expatriates on 16^th March 2016.

The Personal Allowance is increasing to £11,500 in 2017/2018 (it will be £11,000 per person in 2016/2017), and the higher rate band will apply to income in excess of £45,000 in 2017/2018.

We are fast approaching 31^st March, the deadline by which residents in Spain need to submit their annual Form 720 (Modelo 720) listing their overseas assets, where applicable.  If you have previously submitted a form, you only need to declare assets if they have grown a certain amount or you have sold or closed them. 

Besides confirming what you have to declare this year, this is also a good time to consider whether you are holding your assets in the most tax-efficient vehicles for Spain.  If you have investments that were set up with UK taxation in mind, you may be paying more tax in Spain than you need be.

If you live in Spain, the chances are that your heirs, or perhaps even yourself, will be hit by Spanish succession and gift tax.  Many British nationals also remain in the UK inheritance tax net – being non-UK resident alone is not enough to escape this tax.

While they are both taxes on inheritances and gifts, there are significant differences between how they taxes are applied, and the Spanish tax rules can come as a surprise to some.