We first published this article at the back in 2020 when ‘Brexit’ had just been agreed an the transition period just begun.  Through 2019 and 2020, we saw unprecedented numbers of British nationals registering as resident in Spain to secure their residency rights under the Withdrawal Agreement.

In early 2021 the numbers dropped dramatically as the reality of Brexit hit, however as the year progressed they picked up again as people continued with their plans to live in Spain albeit now under the conditions for nationals of third countries.

Throughout 2021 we received a lot of queries relating to Spanish residency and tax in Spain.  For many it seems, the main priority was getting residency with the consideration of tax, put to one side on in some cases completely overlooked.  However in the last few months we been getting a lot of enquiries from people planning to move to Spain, who want to understand and plan their tax position before making the move.

We’ve refreshed and republished the article, and we hope that it will provide answers to most general questions that you may have about tax in Spain, if you’ve recently taken up residency or are planning to.

The UK is no longer in the EU and the process and costs to register a UK car in Spain after Brexit have changed considerably.

This is because UK cars now are now treated as vehicles from third countries and must either clear customs, or get a customs certificate if your car qualifies for customs exemption.

The process you follow will depend on your situation as will the cost.  You’ll need to budget for costs of around €1,000 with taxes as applicable on top.

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.

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 only apply for the Withdrawal Agreement TIE in these circumstances:

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.

Spanish residency requirements for British citizens / UK nationals changed on January 1st 2021 when the UK left the EU.

British citizens / UK nationals now have to follow the same process as other non-EU national citizens of third countries to get Spanish residency, i.e. there is a requirement to first obtain a visa.

The minimum income required for a British Citizen / UK national to obtain a residency visa, is a lot higher than it was to get residency before Brexit.  In most cases a single applicant needs to have at least €27k per year, whereas previously less than €6k income would have been sufficient.

You also have to obtain a police criminal check report, and medical certificates are also required as part of the visa application.

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. 

The UK press and expat papers in Spain have all carried articles warning that thousands of Brits living in the EU will have their UK bank accounts closed by the end of the year.

In the UK the The Daily Mail, The Guardian, The Times and The Daily Telegraph to name a few, have all detailed how banks including Lloyds, Barclays and even the Queen’s bankers Coutts, will be closing expat accounts and withdrawing services.  The reason for this is the UK’s failure to agree a post-Brexit trade deal to allow cross border Financial Services to continue.

Banks are having to make decisions as to which EU countries to pull out of and which to continue operating in.

The bank, which is Britain’s biggest banking group, started writing to its customers living in these countries since August, telling them that their UK bank accounts would be shut on December 31.

Barclays also confirmed that its banking and credit-card customers living in the EU had started receiving letters.

Why Are UK Banks Closing Accounts & Withdrawing Services for Brits Living in the EU?

Update – Spanish Residency for British UK Nationals During the Transition Period

The article below was written the UK left the EU under the withdrawal agreement in January 2020.

Under the withdrawal agreement, British Nationals who hold a residency certificate have their rights as an EU citizen secured.  On July 6th 2020, the residency application procedure for British UK nationals, switched for the EU residency certificate to the withdrawal agreement TIE ‘tarjeta de indentidad de extranjeros’. Both the certificate and the new TIE give the holder equal status in terms of protected EU rights under the withdrawal agreement.

Read more about Spanish Residency for British UK Nationals and the Transition Period

Article written 13th April 2019

Earlier this year, the Spanish Government published its ‘No Deal Brexit’ Contingency Plan. The Contingency Plan was approved by Royal Decree 1st March, and affirms that the Spanish residency certificate will be needed to confirm legal residence in Spain. The plan makes provision for those residing in Spain who’ve not obtained their Spanish residency EU registration certificate before Brexit, to obtain residency documentation. However, it makes clear that British nationals in this situation will be treated differently to to those who have obtained their certificate BEFORE the UK leaves the EU.