Before you make your transition to enjoying life basking in the sun in Spain, making a list of plans is likely one of your primary considerations. One of the top considerations on this list of plans is sure to be financial security and stability considerations during your time spent in Spain. Creating a mental or list in print of your primary financial considerations when it comes to stable and secure finances will assist in creating these conditions during your span spent in the warm comfort of Spain.
Of course, if you have purchased a property located in Spain, you will very likely have an open bank account in your locale in Spain. Since you have already done that, be sure your account is adequately funded to pay expenses in the immediate future, such as utility bills. Additionally, be sure to fund your account with enough to cover any costs that might surface that you didn’t anticipate, necessarily. Inquire at your bank if an account free of fees is available. Most banks do have this option, but it’s generally necessary to fund the account regularly with a minimum of 700€.
It’s not advisable or necessary to close bank accounts you have open in the United Kingdom, because retaining an account back in your native country will someday be useful if you plan to visit relatives and friends there, or if you wish to take advantage of interest rates low in the United Kingdom, which are currently quite advantageously low. Be sure to have enough money deposited in your account left open in the United Kingdom for an adequate period of time, provided plans change. Always give yourself a backup plan in case you decide to return home for any reason.
Deciding on Spanish Residency
Consider that if you spend in excess of 183 days in Spain per year, at least fiscally, you must become a tax paying resident in Spain. The United Kingdom has an agreement that only requires taxes to be paid in one of the two countries, the United Kingdom or Spain. However, be advised that the HMRC works in conjunction with the Spanish tax office, Hacienda, with regard to locating those who don’t declare their assets and income in either of the two countries.
If you plan to remain in Spain as a permanent resident, it’s necessary to make your local United Kingdom tax office privy to this information, divulging your address in Spain. Additionally, it’s advised that you should notify your bank in the United Kingdom of your move to Spain, as well as any other financial services that you make use of in the United Kingdom.
When you become a resident of Spain, advantages exist that are not open to non-residents, such as advantages with particular account types. Whether you decide on becoming a resident of Spain or remaining a resident of your native country, you will be assigned an NIE number when you buy a Spanish property. You will be asked to divulge this number to telecommunication and other utility companies when you request their services. Banks and other similar business types will almost invariably ask for this number, as it is how they will verify your identity.
Spanish Tax Declaration
Non-residents are required to give Spain an income tax declaration, even in the instance that there are no declarations to actually make. You can employ a gestor or gestoría to perform this task for you. If you choose to rent your property, it’s necessary to pay tax on the earnings made from this rental property, whether you declare these earnings in the United Kingdom or in Spain. You will also be responsible for yearly local paid on your property. Be sure you have adequate funds available in your Spanish bank account to fund this payment, because it will be deducted by direct debit, regardless of whether you are physically located in Spain or elsewhere at the time.
One of the optimal methods to fund your Spanish tax requirements is to establish a regular payment plan employing a a currency exchange business, such as Smart Currency Exchange. This particular companies and others like it will charge either no fee or a minimal fee for transferring a fixed amount on a regular basis to Spain. You can impose protections on the amount you will be transferring regularly from exchange rate changes when you employ a forward contract. It’s smart to contact a company of this kind for advice with regard to your unique circumstances.
Not only is this system useful to expats, but it’s also a smart plan for Spanish residents. An ongoing problem faced by taxpayers is fluctuation in currency values. Currently, the pound is standing its ground against the Euro, but it never hurts to make it easier if the value of the sterling drops regularly. Additionally, a currency expertise business can provide you with the best current details on safeguarding yourself in this situation. It’s advisable to establish an account with one of these expert companies prior to entering Spain.
Spanish residents and residents elsewhere must declare their national assets to the Spanish tax authorities. When this task is complete, you must only repeat performing this task if your asset value elevates to more than 20,000€ in a single year. Though this sounds like a great deal of funds, since the sterling is currently valued so high, values will increase when the calculation is completed from pounds to Euro. It’s also necessary to complete a yearly income tax return. Keep in mind that pensions are considered income in Spain, and pensions are not tax exempt, but is paid will be dependent on the specific level of your income in total.
Spanish Insurance Considerations
It will be necessary to end the majority of insurance you have established in the United Kingdom, and begin new Spanish policies. Legally, it’s necessary to take out an insurance policy on your Spanish property. The contents can optionally be insured if you wish, but legally, it’s not necessary. However, it’s highly advisable.
Car insurance is also a legal Spanish requirement, but if your car is a newer model, or you are planning on purchasing a vehicle in Spain, a completely comprehensive policy will generally work out better for you.
Medical insurance is a consideration you must tackle in Spain. If you plan to be employed in Spain, a monthly portion will be required for you to take advantage of the SNS, Sistema Nacional de Salud (the Spanish National Health System). Those who live off a pension that are residents of Spain, are also covered under this free medical care plan. However, a small fee is required to pay for any medication necessary. Unemployed residents and non-residents below the age of an established pension plan availability will need to fund their own health care, or participate in a medical insurance plan of their own choosing to fund their costs.