A recent study indicates there are over 360,000 British residents registered in the country. It is also expected that for the rest of 2021, there will be many more people moving to Spain, which means it is vital that people stay in touch with different tax laws and regulations regarding pensions.
Rules implemented in March 2021 states pensioners must hold an annual income or salary of £21,000 to live in the country.
Be aware of the rules impacting a new life in Spain
Julio Prieto, a Barrister and Abogado at London-based Del Canto Chambers, explained to the Daily Express, saying; “The UK breathed a sigh of relief last week when the government announced that October 4 would signal the end of the traffic light system on travelling abroad, interest in purchasing Spanish properties has come back on the table as travel restrictions to Spain are lifted. The reopening of borders will give rise to an influx of UK nationals resuming their plans to move or invest in opportunities overseas, incentivised by the pandemic to make dramatic lifestyle changes; those motivated by the possibility of being allowed to work remotely. “
There was a significant drop in the Spanish housing market in 2020, but of course, there were many reasons for this. In 2021, it looks as though British buyers are still active, with the Costa del Sol being an area of significant interest.
Mr Prieto continued; “Interest from British investors in Spain has continued to grow significantly since the Brexit vote, and we expect this to continue as Brits regain their pre-pandemic confidence. Spain – a gateway to other European markets – boasts significant legislative and tax-related incentives for foreign investors and is still the number one destination for Brits looking to move or conduct business operations from abroad. Recent statistics show that almost half of over-50s who wish to emigrate would choose Spain – a country where one’s residency status and global wealth can be used to maximum advantage.”
Stay up to date with tax changes in Spain
David Denton is a tax specialist at Quilter International and he has spoken at length about the legal and tax system in Spain. He spoke to the Daily Express, saying; “For those arriving with an employment contract with a Spanish company, some generous tax rules apply, colloquially known as the Beckham Law, as it was allegedly established so that footballer David Beckham would not be unduly disadvantaged when he joined Real Madrid in 2003. But if not, you should be aware that the basic personal allowance for everyone under the age of 65 is €5,550, or €6,700 from age 65, and €8,100 from age 75, with income tax on earned income, rental income and pensions starting at 19 percent, above available allowances, topping out at 47 percent (above €300k). UK pensions (including the state pension) are generally chargeable to tax in Spain and not the UK, and the tax-free lump sum available in the UK doesn’t apply. This means it could be good advice to draw one’s pensions before arriving in Spain to enjoy this feature. The exception to this is that public sector schemes are normally taxable in the UK, not Spain.”
In these difficult times, a lot of people are looking for advice or guidance. It is imperative people follow official guidance, but when it comes to property market matters, it is helpful to speak with a skilled and experienced professional. At Fine & Country Inland Costa Del Sol, we aim to provide all homeowners with guidance and support should they require any information about the Spanish property market.