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Relocation check list for a move to Spain |
| This article was written by Mark Wilkins of the The Rights Group. Although some aspects are specific to moving to Spain, many of the issues discussed also apply to any international move. Please note that the information provided in this article is of a general interest nature and intended as a basic outline only. You are well advised to contact a professional for advice specific to your circumstances. Nothing contained in this article should be seen or taken as the writer or publisher providing legal or financial advice. As removals companies have countdown diaries to help you remember all those important elements needed before the "Big Day", I felt it would be useful, for those seeking to relocate to or acquire a holiday home in Spain, to have a "Check List" featuring those items that required specific attention and which could be ticked off as they were completed. According to a recent report prepared by Accountants PKF, more than 74% of Britons want to retire abroad. So if you are part of that majority who's interested in moving to Spain you'll need to consider using The Rights Group's Check List to aid your smooth relocation. Please "cut out and keep". Home
You'll need to consider your pensions, tax, life assurance, investments and healthcare arrangements in your new home. Please note that, for example, a UK national, a Dane, a Swede or Norwegian has the right to live in Spain by virtue of their countries' membership of the European Economic Area. If you are retiring abroad, you can continue to receive your UK State pension. If you are moving permanently to Spain, you should get yearly increases in your pension.
You should inform your local social security office, the Inland Revenue National Insurance Contributions Office (International Services) and the Department for Work and Pensions when you move and provide your contact details in Spain. Personal and company pension schemes can usually be paid anywhere. The experience of others has shown that some company schemes, for example, will pay a pension only to a UK bank. Further, some annuity companies levy charges for each overseas payment, although others do so for free. You may consider transferring your pension fund abroad. This would eliminate the Euro/Sterling exchange rate risk if your fund were maintained in Euros. Please note that all such international transfers must receive the prior approval of the Inland Revenue and specialist advice should be obtained from a pension's expert. Tax Personal circumstances vary greatly but you may cease to be liable to UK tax if you cut all ties with the UK and become domiciled abroad. However you will technically be a UK resident if you spend a requisite number of days in the UK and will consequently suffer UK tax on your income.
Please remember that if you are proposing to rent out your UK property this will attract a UK income tax charge. Inheritance tax It is essential to ensure that you have a Spainsh Will - which should be in addition to a UK will. If you have offshore interests you may also wish to consider a will which is specific to that jurisdiction, for example, Gibraltar. Make sure that your various wills dovetail and do not contradict each other. It is advisable for both the husband and the wife to have wills - please see below. Liability to UK Inheritance Tax (IHT) stems from your amount of assets you own and your domicile. The Inland Revenue considers that you are domiciled in the country of your permanent home. Domicile is distinct from nationality, residency or your country of birth. Changing your domicile is often difficult as the Revenue is reluctant to accept that your departure from the UK is permanent. To be certain you'll need to obtain from the Revenue written confirmation that they acknowledge that you are no longer domiciled in the UK - if that is your aim. If you're domiciled in the UK, IHT applies to your assets, wherever in the World they are situated. If you are domiciled abroad, on the other hand, UK inheritance tax applies only to your assets in the UK. In Spain you may well be liable to Spanish IHT. You should note that transfers between husband and wife (which are exempt from inheritance tax in the UK) are subject to Spanish IHT following the death of either party. Capital gains tax (CGT) this depends on whether you're retiring abroad permanently or just buying a holiday home. UK residents are liable to CGT on their world-wide assets, so if you sell your holiday home, it will be subject to CGT in the UK and may well be subject to a payment to the Spanish Tax Office or "Hacienda". The effect of this may be to neutralised by double taxation Treaty relief. Life Assurance It is prudent to ensure that all UK life assurances are maintained through payment from a UK bank account. In addition, as a change in residency or domicile may constitute a material change it should be disclosed to your life assurance provider in writing. Investments Please note that existing investments such as the tax-free status of existing UK investments, PEPs and ISAs, continue to apply, but you in ceasing to be a UK tax resident you will have to reduce contributions into them. You will also need to obtain special local advice to establish whether you will become liable to tax on the income from these investments in Spain. Generally we would recommend that you should seek the assistance of an expert financial adviser to establish what to do about your investments and the best ways to minimise income and capital gains tax. Health One of the most important factors to take into account if you are moving to Spain is your long-term healthcare. Collect and complete the E121 form from the Department of Health covers UK citizens receiving the state pension for some health costs. However, you may still find yourself paying substantial additional costs. As a consequence many retirees to Spain take out a comprehensive medical and dental policy. The Department for Work and Pensions will be able to advise on your rights in Spain. Pets If you are going abroad and wish to take your pet cat or dog with you, the Pet Travel Scheme (PETS) could allow you to avoid long quarantine periods. Working guide and hearing dogs may also travel on the scheme. Spain is a participating country in PETS. To be eligible, your cat or dog must meet the requirements of the scheme and travel via certain designated air routes You can get more advice about the PETS scheme from Pet Travel Scheme Helpline Department for Environment, Food and Rural Affairs, Area 201, 1a Page Street London SW1P 4PQ Tel: +44 (0)870 241 1710 Email: pets.helpline@defra.gsi.gov.uk You have just completed the first steps towards a more exciting and varied life. Congratulations, see you by the pool! © Mark FR Wilkins 2005 (Marbella) The Rights Group SL mark@therightsgroup.com The Rights Group 0034 600 343 917 |
