The Spanish Non-Lucrative Visa offers residency to British nationals who have the financial means to support themselves without working. The Spanish Non-Lucrative Visa scheme is therefore ideal if you are retired, or have passive income, for example income from rental properties or other investments. The Spanish Non-Lucrative Visa is intended for full-time residency in Spain, i.e. 6 months or more per year.
The UK is no longer in the EU and the process and costs to register a UK car in Spain are a lot more than they were before Brexit.
This is because UK cars now are now treated as vehicles from third countries and must clear customs, have import duty and VAT paid, or get a waiver if your car qualifies for customs exemption.
Portugal has ended its Golden Visa residency program for property investors. This announcement came just a week after Ireland terminated of its ‘Golden Visa’ Immigrant Investor Program.
Both countries introduced Golden Visas in 2012, as did Spain, as they struggled to recover from the global financial crisis. The aim was to prevent banking collapse by bringing foreign money into their real estate markets.
Spain’s Digital Nomad Visa is now available following the passing of the new Startups Law, ‘Ley de Startups‘. This visa which allows the holder to live in Spain and work remotely or online, can be applied directly in Spain, or via the Spanish Consulate in the country in which you currently reside.
To get Spain’s Digital Nomad Visa, applicants must have sufficient funds to support themselves, proof they can work remotely from Spain, and must already have been working in their current ‘remote worker’ employment or self-employment prior to applying.
Holders of the Digital Nomad Visa are eligible for a special income tax rate fixed at 24% for the first 5 years, offering higher earners reduced income tax compared to normal residents.
Andalucía has become one the top 3 regions in Spain with the least taxes. On the 21st September 2021, the regional president, Juanma Moreno, announced the scrapping of Wealth Tax in Andalucía.
The tax has accounted for just 0.6% of income for the regional government (€95m annually), and Moreno believes the change will have a very positive impact on increasing revenue by attracting investment.
A large number of the highest wealth tax payers left Andalucía in 2020, resulting in a loss of income of estimated at around €18m (€3.5 million euros in wealth tax and €14 million in personal income tax).
The president is hoping that removing Wealth Tax will encourage people with high income who spend long periods in Andalucía, but are not tax resident, to make it the region their permanent home and pay tax there.
Moreno’s estimate is that the tax reduction will attract 7,000 new residents, the result being that the 0.6% of income lost will be far exceeded, through income tax and other indirect taxes collected.
As wealth tax hasn’t been abolished, the annual tax return still has to be done according if, according to the law, ‘ . . . the value of their assets or rights, determined in accordance with the tax regulations, is greater than €2,000,000 euros.’ However 100% tax relief will be being granted to zero the liability.
New ‘Large Fortune’ Tax Proposed
The good news of Andalucía’s Wealth Tax reform, was shortly muted by news that the Spanish government plans to impose a temporary national ‘tax on large fortunes’. The tax is yet to be approved by parliament, but is is expected to be implemented for 2023 and 2024 and will affect individuals with net wealth above €3 million.
Since wealth tax is collected by the regional Government, it was confirmed that any wealth tax paid would be offset against any ‘large fortune tax’ bill. As Andalucía now give 100% wealth tax relief, residents in Andalucia won’t have to pay wealth tax, however if their net assets equal €3 million or more, they would have to pay the ‘large fortune tax’.
The proposed rates are as follows:
- 0% up to €3 million of net wealth
- 1.7% between €3 million and €5 million of net wealth
- 2.1% between €5 million and € million of net wealth
- 3.5% for a net wealth of over €10 million
According to the information provided by the Spanish Ministry of Finance, the tax on ‘large fortunes’ tax will affect 23,000 taxpayers and raise €1.5 billion in revenue, which will be used to finance policies to support the most vulnerable who are affected by the recent steep rises in cost of living.
The TIE, Tarjeta de Indentidad de Extranjero, is the Spanish identification card for citizens from third countries (non-EU) who reside in Spain. The Withdrawal Agreement TIE is a special version of this card, issued to British UK nationals who have retained EU rights under the terms of the Brexit Withdrawal Agreement.
The qualifying requirements for applicants e.g. for proof of means remain the same as they were when the UK was in the EU. British UK nationals living in Spain who had not obtained a residency certificate, had until the 31st December 2020 to apply for the the Withdrawal Agreement TIE.
You can now apply for the Withdrawal Agreement TIE in these circumstances:
Importing a high value car from the UK in Spain post Brexit, now comes with added costs. As the UK is no longer in the EU and the standard process to import and register a UK car in Spain now involves customs.
This means on top of the registration tax which in most cases will be 17% of the vehicle value, 10% customs duty and 21% VAT will apply, unless you can find away around it.
Paying nearly £50k to register a £100k motor is simply not a consideration. There are however various ways these huge costs can be avoided, bringing the cost of importing and registering high value cars in Spain down to a few thousand Euros, rather than tens of thousands.
As of 1st January 2021 the United Kingdom was no longer a member of the European Union. The transition period to negotiate future arrangements between EU and the UK ended on 31st December 2020, with a deal of sorts finally agreed at the last minute.
As of the end of the transition period, privileges enjoyed under EU freedom of movement came to an end. British UK Nationals and their non-EU family members will be subject to all Spanish immigration rules for third-country (non-EU) nationals.
However, UK nationals and their family members who took up residency in Spain and other EU Member State before the end of the transition period in accordance with EU free movement law, will maintain their free movements rights after 31st December 2020.
Christmas Eve marked the moment the UK finally reached a Brexit agreement with the EU, full details of which have now been published. The so called ‘Free Trade Agreement: a new economic and social partnership with the United Kingdom’, is of most interest to UK nationals living in Spain and other EU countries, those planning to and those with other interests such as business or a holiday home.
The agreement covers not just trade in goods and services, but also a broad range of other areas such as, tax transparency, air and road transport, energy and sustainability, fisheries, data protection, and social security coordination.
Notable points for UK nationals in Spain or other EU countries in the agreement are that:
We wrote an article recently detailing that many British nationals living in Spain and other EU countries, have received letters from their UK banks telling them that their accounts will be closed at the end of 2020. This due to no Brexit trade deal having been agreed.
That article explained the impact of no Brexit trade deal on financial services providers in the UK. After 31st December 2020, these service providers will not legally be able to carry on providing services to their expat clients who reside in Spain or other EU countries.
The Brexit transition period ends at the end of the year, and with it the financial services licence EU ‘passporting’ rights which allow UK firms to provide financial services in EU countries.
As a result many providers, including Financial Advisers, are withdrawing their services as advisers where their client is a UK national living in the EU. It is only a small minority of financial service providers that have taken the necessary steps to establish themselves in the EU so they can continue providing their services.
It is therefore quite likely that from 2021, most expats living in Spain or other EU countries will not be able to receive advice or services from their UK Financial Adviser. Clients and advisers alike who are affected by this, should be acting now to make alternative financial arrangements.