Spanish fiscal laws are very different from those in northern Europe such as the UK and Nordic countries for example. The approach to wealth and tax planning has to be advised on by experts in this sphere. This is where advice from a qualified, locally resident consultant at Finance-Spain.com comes into its own.
We pride ourselves on not only being independent but also having an approach to investments and pensions that is completely transparent. As well as holding a MIFID 2 license for investment advice throughout the EU we are covered by the requisite professional indemnity insurance as an extra layer of security for our clients.
Wealth management is a term often misunderstood. For example, you don't necessarily have to be 'super rich' in order to benefit from professional advice. It is more about constructing a plan for you to reach your financial goals - no matter what your stage in life. Our wealth management proposal includes retirement solutions, succession and estate planning for you and your family, tax efficient investments and an ongoing service second to none.
We develop long term relationships with our clients based on mutual trust and transparency. We have years of experience managing the largest estates to the smallest private pension funds. For a confidential initial chat please give us a call or send us a message on the form below.
It's important to review your retirement plans if you are, or intend to be, a resident of Spain. There are certain financial structures here that offer excellent tax benefits depending on your situation. Whether it's investments or pensions, however you plan to fund your retirement it really needs to be Spain specific.
For example, UK ISAS and the old PEPs (personal equity plans), TESSAs (tax-exempt special savings accounts) and Premium Bonds are non compliant in Spain and therefore taxable. Furthermore the providers of these UK products will not allow you to receive any UK tax benefits once you are a Spanish resident.
Having made the decision to move to Spain, it is essential that you plan prudently in order to optimise your finances, particularly in relation to the implications of income and capital gains/savings taxes as well as wealth tax, rental tax, succession tax and gift tax.
Although it's something we all have to pay of course, there is nothing illegal about mitigation strategies. In fact it is often the Spanish tax authority themselves who encourage the use of certain tax-beneficial structures. Click here to find out if you are catagorised as resident for tax purposes in Spain.
If you are resident in Spain with one or more UK pensions you could well be able to take advantage of either of these two pension structures - An International SIPP (self invested personal pension scheme) or a QROPS (qualifying recognised overseas pension scheme). There can be significant advantages to both, depending on your circumstances. Click here to read about the differences.
A warning though - SIPPs and QROPS have been used by scammers both in the UK and abroad to convince people to transfer out of their UK schemes after which they have lost most, if not all of their funds. Never deal with an unregulated firm. You can read more on how to identify a scam by clicking here.
Spanish compliant portfolio bonds (otherwise known as 'tax wrappers') and international platforms are both common types of holding structures used in Spain for investments. The difference is that the platform can hold direct investments such as company shares, stocks, mutual funds and unit trusts etc. However, a Spanish compliant bond is designed in the main to hold mutual funds or collective investment schemes.
The main attraction of a Spanish compliant bond over a platform is the tax benefits afforded by Hacienda. For example - the bond receives capital gains tax deferral (allowing for more compound growth), proportional tax relief on withdrawals and has the potential to mitigate Spanish inheritance tax (Impuesto sobre Sucesiones y Donaciones - ISD). Being in Spain we have relationships with several Spanish abogados fiscales via whom we have seen these benefits consistently recognised by the local tax authorities.
On the other hand, the attraction of a platform is the flexibility it offers in terms of investments. This approach, although not as tax efficient, can be more appealing to the more experienced investor or clients who have a preference for holding individual company shares for example. They can also be more cost effective. Especially if the client requires the ability to access 100% of the investment at all times, even in the early years.
This area of advice is vital in Spain. There are many differences between the way succession tax in Spain works compared to northern Europe. For example - Inheritance tax in the UK is based on the deceased person's estate. In Spain the tax burden falls upon the beneficiaries - even if they don't live here (this occurs when the asset being passed on, such as a property, is located in Spain - a common issue for expatriates).
There can be further complications such as;
1) UK IHT is potentially liable when the deceased is UK domiciled (nothing to do with where you live - something you acquire at birth and is difficult to lose)
2) IHT in Spain and elsewhere is not covered by the usual dual tax treaties (although there may be bilateral relief in some situations)
3) The conventional offshore Trust set up to mitigate IHT will not work in Spain as they are not recognised.
Making sure you have an up to date Spanish Will is important here. Especially in light of EU Directive 650/2012 where foreign nationals will be treated under the Spanish system of obligatory heirs (that establishes that two thirds of your estate has to go directly to your children) unless you specify a wish for your national law to rule your estate. If you have any questions or would like a confidential chat about your own circumstances please send a message below or give us a call.
Living in Spain has superb lifestyle benefits. However, when it comes to the ever changing fiscal, pension and tax laws it can be a minefield for an expatriate. This is where we come in. Our role is to help and guide our client's with their investments, pensions, estate and tax planning arrangements as a Spanish resident. In this respect it is very important to use a reputable, regulated wealth management service with well established offices in Spain.
Patrick Macdonald ASCI
International Financial Adviser
If you were born in the UK then you are UK domiciled - even if you live and pay taxes in Spain. This is VERY important as UK inheritance tax is payable by all UK domiciled persons, no matter where they live. However there are ways to mitigate this - contact us for more information.
"Many thanks to Patrick. He guided me through the process of transferring my funds with patience and expert knowledge. He also provided sound advice on the pitfalls I would have faced in Spain without his insight."
"We needed to switch our existing investment from a financial investment company that we no longer trusted and I opted to choose Patrick. He listened to our needs for a low risk investment, explained what was our best option and guided us through the application. He was professional, patient, understanding and very helpful."