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Brexit a year on
Wednesday, 16 February 2022

It has been over a year now since the UK left the European Union. And while British expatriates continue to enjoy the life they were used to in Spain, there have been some changes to understand and get used to, some more inconvenient than others.  And for those wanting to move to Spain from 2021 onwards, it’s a whole new ball game.

The door to Spain is not closed but things are more complex than they were. The key is planning ahead and working with specialists in cross-border planning who understand the issues and implications and have the resources to keep track of the changes and available options.

On a day-to-day level, many of us have run into issues when receiving parcels from the UK, whether it is delays at customs, import taxes or some UK shops no longer shipping to the EU. But there are bigger issues to deal with too.

The 90-day rule

This affects people who have holiday homes in Spain and were used to being able to come and go as they pleased.

Unless you have Spanish residence or EU citizenship, UK nationals are now ‘third country’ visitors, which means you can only spend up to 90 days in any rolling 180-day period without a visa. This limit applies across the EU Schengen zone.

Non-resident Britons now have their passports stamped as they enter and leave Spain. Once the European Travel Information and Authorization System (ETIAS) comes into force, expected to be at the end of 2022, it will keep track of arrival and departures electronically.

‘Green card’ and TIE

Those who were resident in Spain before Brexit maintain their previous citizens’ rights. You should have an official residence permit, whether the old ‘green card’ or new TIE. The ‘Tarjeta de Identidad de Extranjero’ biometric card explicitly states it has been issued to the holder under the terms of the Withdrawal Agreement.

The green card remains valid and proof of your rights. Changing it is supposedly optional, but we are aware that some authorities are insisting on the TIE.   The Spanish government also recommends exchanging your old card for a TIE as it is more durable and may simplify administrative processes.

Residence permits for new arrivers

It appears that working visas have been proving quite hard to obtain, but retired people can apply for Spain’s Non-Lucrative Visa and Residency Permit.  You will need to demonstrate   sufficient financial resources, suitable medical insurance and clean police records.  Importantly, you now have to apply in the UK in advance of moving.

If you can make a substantial investment in Spain, for example by buying Spanish property worth at least €500,000, a more flexible approach is Spain’s ‘Golden Visa’. You won’t need to spend six months in Spain to maintain the right to legal residence.

Note that having a Spanish residence permit does not provide onward freedom of movement in the EU.  If you want to move to another EU country, you’ll need to apply in the same way as you would if you were moving from the UK.

Tax residence

You are resident in Spain for tax purposes if you spend more than 183 days a year here, or your centre of economic or vital interests is in Spain.  Whether you have the withdrawal agreement TIE card or a non-lucrative visa, you are likely to be tax resident here and need to declare your worldwide income and wealth accordingly.

UK-based financial advisers and services

The UK lost financial services passporting rights with Brexit and UK based advisers are no longer authorised to give advice within the EU.  As 2021 went on, more UK based advisers have had to concede that they can no longer appropriately advise or service their EU resident clients.  This also applies to banks, investment and insurance companies, stockbrokers etc.

If you still use a UK-based financial adviser or service, confirm they can legally provide you with regulated services, or if there are limitations. For example, will you have to return to the UK for advice? Does their professional indemnity insurance cover you in the case of poor advice?

UK pensions and Spanish wealth tax

Although pension plans are generally listed as exempt from wealth tax, a 2019 ruling by Spain’s Directorate-General for Tax concluded that “the consolidated rights and economic rights of pension plans established in non-EU Members States may not benefit from the exemption”. Unfortunately this means that, following Brexit, UK private pension plans are liable for wealth tax.

There may be more post-Brexit changes to come.  The pandemic may have delayed some measures and as the UK develops rules that do not need to be aligned with its European neighbours, the differences could widen and present more challenges. But also, as time goes on, everyone will become more used to the new systems and they will become the norm.

We’re encouraged to see that, on the whole, Brexit hasn’t put people off moving to Spain.  Regardless of Brexit, from a wealth management point of view, you have always needed to adjust your tax, estate and financial planning to suit the local regime and make the most of what Spain has to offer, so take specialist cross-border advice.

David Bowern, Partner, Blevins Franks

+34 952 809 212

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All information is based on Blevins Franks’ understanding of legislation and taxation practice, in the UK and overseas at the time of writing; this may change in the future.

Blevins Franks Wealth Management Limited (BFWML) is authorised and regulated by the Malta Financial Services Authority, registered number C 92917. Authorised to conduct investment services under the Investment Services Act and authorised to carry out insurance intermediary activities under the Insurance Distribution Act. Where advice is provided outside of Malta via the Insurance Distribution Directive or the Markets in Financial Instruments Directive II, the applicable regulatory system differs in some respects from that of Malta. BFWML also provides taxation advice; its tax advisers are fully qualified tax specialists. Blevins Franks Trustees Limited is authorised and regulated by the Malta Financial Services Authority for the administration of trusts, retirement schemes and companies. This promotion has been approved and issued by BFWML.


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