A year after Brexit – what has changed for those living in Spain?

While British expatriates continue to enjoy the life they were used to in Spain, there have been some changes to understand and get used to, some more inconvenient than others.  And, for those wanting to move to Spain from 2021 onwards, it’s a whole new ball game.

We asked AIPO partners, Tax and Wealth Management Specialists Blevins Franks, to give us their update.

The door to Spain is not closed but things are more complex than they were. The key is planning ahead and working with specialists in cross-border planning who understand the issues and implications and have the resources to keep track of the changes and available options.

On a day-to-day level, many of us have run into issues when receiving parcels from the UK, whether it is delays at customs, import taxes or some UK shops no longer shipping to the EU. But there are bigger issues to deal with too.

This affects people who have holiday homes in Spain and were used to being able to come and go as they pleased.

Unless you have Spanish residence or EU citizenship, UK nationals are now ‘third country’ visitors, which means you can only spend up to 90 days in any rolling 180-day period without a visa. This limit applies across the EU Schengen zone.

Non-resident Britons now have their passports stamped as they enter and leave Spain. Once the European Travel Information and Authorization System (ETIAS) comes into force, expected to be at the end of 2022, it will keep track of arrival and departures electronically.

Those who were resident in Spain before Brexit maintain their previous citizens’ rights. You should have an official residence permit, whether the old ‘green card’ or new TIE. The ‘Tarjeta de Identidad de Extranjero’ biometric card explicitly states it has been issued to the holder under the terms of the Withdrawal Agreement.

The green card remains valid and proof of your rights. Changing it is supposedly optional, but we are aware that some authorities are insisting on the TIE.   The Spanish government also recommends exchanging your old card for a TIE as it is more durable and may simplify administrative processes.

It appears that working visas have been proving quite hard to obtain, but retired people can apply for Spain’s Non-Lucrative Visa and Residency Permit.  You will need to demonstrate   sufficient financial resources, suitable medical insurance and clean police records.  Importantly, you now have to apply in the UK in advance of moving.

Download our free Spain Non-Lucrative Visa Guide

If you can make a substantial investment in Spain, for example by buying Spanish property worth at least €500,000, a more flexible approach is Spain’s ‘Golden Visa’. You won’t need to spend six months in Spain to maintain the right to legal residence.

Download our free Spain Golden Visa Guide

Note that having a Spanish residence permit does not provide onward freedom of movement in the EU.  If you want to move to another EU country, you’ll need to apply in the same way as you would if you were moving from the UK.

You are resident in Spain for tax purposes if you spend more than 183 days a year here, or your centre of economic or vital interests is in Spain.  Whether you have the withdrawal agreement TIE card or a non-lucrative visa, you are likely to be tax resident here and need to declare your worldwide income and wealth accordingly.

The UK lost financial services passporting rights with Brexit and UK based advisers are no longer authorised to give advice within the EU.  As 2021 went on, more UK based advisers have had to concede that they can no longer appropriately advise or service their EU resident clients.  This also applies to banks, investment and insurance companies, stockbrokers etc.

If you still use a UK-based financial adviser or service, confirm they can legally provide you with regulated services, or if there are limitations. For example, will you have to return to the UK for advice? Does their professional indemnity insurance cover you in the case of poor advice?

We’re encouraged to see that, on the whole, Brexit hasn’t put people off moving to Spain.  Regardless of Brexit, from a wealth management point of view, you have always needed to adjust your tax, estate and financial planning to suit the local regime and make the most of what Spain has to offer.

Blevins Franks provides specialist cross-border wealth management advice. With offices spread throughout Europe, our clients receive guidance based on their own unique circumstances.

We help to ensure your financial affairs are set up in the most secure and tax efficient way possible, giving peace of mind to you and your family.

Contact Blevins Franks today.