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THEBRITISHINSPAIN.COM your online relocation guide

RETIRING IN SPAIN
E
very 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 area provides 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

 

 

 

 

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