On 25th March we posted a story about the changes in Spanish tax laws that stated expats must declare all overseas assets worth more than £44,000 or face fines that could be in excess of the value of the asset. This has prompted thousands of British expats to start leaving Spain and head back home to the UK.
Andrew Oliver, senior managing partner of deVere Spain told the Telegraph this week “I would urge these expatriates to seek financial advice on this issue. People need to speak to their adviser about the bona fide solutions which offer tax efficiency, peace of mind and a low administration burden,”
“But rather than allowing these new reporting laws to force you to quit Spain and the high quality of life it offers you and your family, it would be worth first seeing if an overhaul of your financial affairs is the solution.”
The requirements that came in to place at the end of April of this year affected anyone that lives in Spain for more than 183 days per tax year and has assets (including property, bank accounts and investments) worth more than €50,000. The Foreign Office estimates that 800,000 British nationals live all or part of the year in Spain. Residency is difficult to measure, but estimates vary from 250,000 to 400,000.
There have been various complaints about the new law, with many fearing it as a ‘Cyprus style money grab’. Oscar Anton, the deputy mayor of Javea, where 55% of the population, mainly Britons, are affected by this – is one of the few Spanish politicians officially opposing this law. He says many EU residents are coming to Javea Town Hall each day wishing to de-register as local residents.
However, the debt-burdened Portugal has encouraged those expats left uncertain about their future in Spain to up-sticks and move across the border where any new residents will not have to pay tax for up to five years depending on their circumstances.
Despite this new law coming in to place, there are various incentives that encourage British entrepreneurs to move to Spain at various levels, as well as a retired person’s visa which entitles the holder to retire in Spain at the age of 65.
If you are considering a move to Spain, Portugal or Europe either as an expat, entrepreneur or to retire, get in touch with Cadogan Tate to discuss our international moving services – please click here.