RETIRING
IN SPAIN Every year thousands of Britons wave goodbye to cold winters, traffic jams
and NHS queues to retire abroad. Most people will be entitled to some form
of UK state pension. Around one million people currently claim the state pension
abroad. Your pension or widow's benefits, can be paid directly to you
in Spain. Or, if you wish, you can choose
to have payment by payable orders sent straight to you by post Whichever you
choose, payment is made every four or 13 weeks in arrears.[Download
the Retiring to Spain guide here.] If you worked for
a Government agency,
Police or armed forces, etc., you will not be liable for tax on that pension by
the Spanish tax Authorities. All other pensions from whatever source are liable for inclusion
in your Tax declaration to the Spanish Tax Authorities. If you take
a lump sum from your pension while you are living in Spain, only 40%
is subject to tax.
CAN
I CLAIM A SPANISH
PENSION? If
you have lived and worked in Spain for a
minimum of 15 years and paid you
national Insurance contributions and Income tax you are eligible
to receive the Spanish State pension. If
you have worked throughout Europe and made
the applicable contributions there is provision
within the law that entitles you to a pension in proportion to the time you have lived and
worked here.
AM
I A RESIDENT ? You are regarded as resident for tax
purposes if you spend more than 183 days in Spain, or your permanent home is
in Spain. As such, you are legally bound to submit a tax
declaration and must declare all pensions. Our
download
areaprovides thorough guidelines on the tax implications of
moving abroad along with a fact sheet on benefits that can be exported
to Spain and those that cannot.
DO
I NEED A SPANISH
WILL? If
you are a foreigner with assets in
Spain, you should make a Spanish
will. This will help avoid
time-consuming and legal problems
for your heirs. The Spanish
testament should clearly state
that it disposes only of your
assets in Spain. If you have other
assets in the UK you should
also have a will &
testament drawn up there
clearly states that it disposes
only of the assets in the UK. Spanish Inheritance
Taxes are payable
after 15025€ and there
is
no
exemption from these
taxes. However, if you
are an official
resident in Spain, and
if you leave your
inheritance to a
spouse, you could be
eligible for a 95%
reduction in the value
of your property for
inheritance tax
purposes. Spanish
law
requires
that
two-thirds
of an
estate
must go to
the
children,
as
compulsory
heirs.
However,
as a
foreigner,
this law
does not
apply to
you and
you will
be able to
leave your
estate to
the person
of your
choice.
You will
not be
exempt
from
paying the
inheritance
taxes. The will
itself is
in two
columns,
one in
Spanish
and the
other in
English or
the
language
of your
choice. It
will be
checked by
the Notary
Public and
signed in
his
presence,
with three
witnesses.
This is
the most
common
type and
is called
an open
will
[testamento
abierto].
The Notary
Public
keeps the
original
in his
file and
give you
an
authorised
copy and
will send
a
notification
to the
Registro
Central de
Ultima
Voluntad,
which is
the
Central
Testament
Registry
in Madrid.
Each will
is given a
certification
number and
kept on
file to
make sure
that a
legal copy
can always
be found.
If you
have lost
your copy
contact
the
central
registry
to get a
copy. Alternatively
you can
make a
closed
will
[testamento
cerrado],
or
holographic
will,
hand-written
by you, or
a verbal
will,
which
requires
the
presence
of five
witnesses. Your
lawyer
will
advise you
of
possible
legal
alternatives
to getting
around
paying the
maximum
tax. Here
are some
common
solutions.
Form a
family
corporation
or
trust,
in
which
the
family's
wealth
passes
to the
company.
When a
family
member
dies,
the
board
is
reorganised
and
shares
transferred.
This
is
subject
to a
low
tax
rate.
Make a
gift
of
your
property
to
your
heirs
while
you
are
alive,
keeping
the
(usofructo)
right
to
continue
using
the
property
as
long
as you
live.
However,
the
Spanish
gift
tax is
the
same
as the
inheritance
tax.
Sell
the
property
to
your
heir,
reserving
the
usofructo.
This
is a
good
option
if
your
property
exceeds
60100€uros
but
must
be
done
at
least
5
years
before
your
death.
Visit
the Download
area
for the questionaire to assist in the
preparation of your Spanish will. Once
completed take it along to an "Abogado" it
will speed up the process. Also
in our Download
area
What to do in case of death