Spanish residency for expats explained Blacktower Financial Services

Normal (Civil) and fiscal residency is the topic I get the most questions about. It is not my area of expertise, but this is the information you need.  Many people think that they are one and the same thing. But they are not.

What is the normal residency?
Normal (Civil) residency is obtained from the Spanish National police station in the area where you live and should be applied for, after 90 days if you are intending to live in Spain for more than 183 days per year.  It could be easily described as a “staying permit”.

The documentation of the Spanish residency for UK and EU citizens is currently a small green card of credit-card size (with no photo).  Many of you would have an A4 paper certificate if you obtained it years ago – this is still valid.  Non-EU citizens obtain a card with a photo, and the format is a mixture of light red, white and blue colours.  After Brexit this may mean a change for UK expats and is why many from the UK are trying to obtain official residents before the end of the year.

What you need
The civil residency has two main requirements:
1.    Financial means – Depending on the police station it will be proof of regular income or savings
2.    Health coverage – Employer provided, self-employed or a pensioner or private with full coverage in Spain.

What is fiscal residency?
Fiscal Residency is when you spend more than 183 days in Spain and have got your EU or non-EU Spanish residency cards/certificate and present the annual Income Tax Declaration form 100.

Is fiscal residency necessary?
To begin with, you do not have a choice of not being a Fiscal Resident if you live in Spain and this is your main residence, you are obligated to present the annual Income Tax Declaration based on your worldwide income.

What you need
The certificate of Fiscal Residency is a white document obtained from the Tax Office (when it is required). There are two types:

•    The first one is the normal Certificate which is often requested for use inside of Spain. For example, is sale of a property by foreign Residents so there is not retention of the 3% the requirement for sellers who are non-residents in Spain or in settling an inheritance.

•    The second and most common document for Residents is the Certificate of Fiscal Residency under the Double Taxation Treaties “Certificado de Residencia Fiscal con Convenio”, to confirm Fiscal Residency in Spain as these are required by Tax Offices in other countries to stop deducting and paying Tax there.

Financial Planning and Residency
It is important to remember once you are a fiscal resident that many of the financial products (Investments and pensions) could be treated completely differently for you as a Spanish fiscal resident.  
It is possible that you are unwittingly breaking tax rules in Spain in either incorrectly declaring or not even declaring assets at all for tax because that is the way you used to do it in the UK. The main mistakes usually occur when taking benefits from company or personal pensions or by continuing to invest in an ISA and not reporting the profits/interest in Spain because it is a tax-exempt product – not the case in Spain.

For more information about how we may be able to help you, contact your local office today.

The local Blacktower office address is:
120 Avenida Dr. Artero Guirao 2C.  San Pedro Del Pinatar, 30740, Murcia, Spain.
Our office suite is easy to find on the main N332 through road of San Pedro del Pinatar with easy parking.

If you wish to make an appointment to discuss your own situation then call 657684094 or email keith.littlewood@blacktowerfm.com

Disclaimer: The provision of information in this communication is not based on your individual circumstances and does not constitute investment advice. Blacktower makes no recommendation as to the suitability of any of the products or transactions mentioned.

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120 Avenida Dr. Artero Guirao 2C. San Pedro Del Pinatar, 30740, Murcia, Spain.

Tel: +34 657 684 094

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Financial Advice Issues for Expats in Spain

I have been a Qualified Financial Adviser for almost 35 years now. 25 years in the UK for major institutions such as Natwest, RBS and Royal London. I have been in Spain giving expats financial advice now for 10 years and it is quite remarkable the different approaches as well as advice that is required for an expat now living in Spain.  Blacktower is a company that has specialised in providing the best solutions for its clients living outside the UK for 30 years also.

The currency issue is always high on the agenda and a discussion for the long term future has to be taken onto account.  Questions like What will happen if one partner dies? Will the other remain in Spain? What about other family members? What Inheritance tax provisions do you have in place? The list goes on and on.

Existing portfolio’s and investments that were the mainstay of portfolios in the UK may now be obsolete.  An example of this is quite often tax efficient products in the UK like ISA’s and previously held TESSA’s PEP’s actually have low growth rates and provide no tax advantage to a Spanish fiscal resident.

Existing Pension holdings either paid by the state or private pensions built up through working lifetimes are topics that have to be covered.  Many expats have lots of small pensions from many ex employers and can be confused by the communications and administration in dealing with them.  At Blacktower we specialise in advising on how to consolidate and bring all these pensions together in one place.

Bank accounts and investments in Spain always bring up lots of questions too.  Quite often the small print associated with financial products in Spain is in Spanish this can make it very difficult even if you have a good grasp of the language.  Understanding Jargon in English is sometime difficult enough.  I provide clear easy to understand letters and documents in English so that you fully understand any terms and conditions before making a decision.

Advice on tax efficiency is just as important and offering good returns.  There are products available exclusively for Spanish expats that can provide invaluable benefits.  Having a good base knowledge of the tax implications both now and in the future is an essential ingredient to making a sound decision.

I will complete a thorough factfind, ask you the right questions, establish your individual needs, attitude to risk and capacity for loss and desired returns before providing you with a full written report of advice and my recommendations in plain English.  You will then have time to read and consider all the information before contacting me with how you wish to proceed.

Click for more information about Keith Littlewood.

The above information was correct at the time of preparation and does not constitute investment advice and you should seek advice from a professional adviser before embarking on any financial planning activity.

Blacktower Financial Management (Int) Ltd is licensed in Gibraltar by the Financial Services Commission (FSC) and is registered with both the DGS and CNMV in Spain