Financial Impact Of Moving To Spain

For many years, people from the UK have been coming to Spain to live full or part time and in many cases it has been easy to avoid any disruption to the way Finances are managed.  Some people have chosen to become Spanish Fiscal Resident, but others have chosen to keep their finances and taxes under the UK system.  Following Brexit and rules surrounding the amount of time you can legally stay in Spain and without the freedom of movement – this is no longer an option.

If you are now considering ‘biting the bullet’ and taking up full time residency in Spain, there are some very important considerations that you must take into account:

Do you own a property in UK?

Are you keeping it or selling it?

You may have owned your UK home for many years and moved to Spain without actually selling.  After you are a tax resident in Spain you may not benefit from the CGT (Capital Gains Tax) free allowance you get in the UK for your main residence.  As your main residence will become Spanish and you sell your UK home in future years, you may be subject to a huge Spanish CGT bill that could have been avoided with proper life planning.  Also there is no getting away with not telling Spain about your UK property, as once you are resident in Spain, each year you will have to complete an Overseas Asset Declaration (Modelo 720) to include all the assets you own outside of Spain valued in excess €50,000. Failure to do so can result in large fines.

Do you have Pension Funds?

Part of your financial planning in funding your move to Spain may be the use of your Pension Pots.  This is where very major mistakes can happen.  One example is the Tax Free element allowable as a UK resident.  This is TAXABLE as a Spanish resident as ‘earned income’ and can result in a huge tax bill if not planned for properly.

Do you have an ISA?

These are great for saving if you live in the UK as they are completely tax free.  Many people have built up substantial ISA funds and portfolios.  If you move to Spain, you can keep your existing ISA, but are not allowed to contribute any more into it.  You will NOT retain the tax benefits though.  If you do have an ISA it is very important to take advice and look at what alternatives could be tax efficient for you if saving tax is important, but more importantly make yourself aware of the tax implications to avoid an unexpected tax bill in your second year living in Spain.

Above are just 3 examples in which you can be caught out by easy-to-make financial mistakes that you may not have considered.  If you are thinking of moving to Spain, please make sure you do not fall foul and speak to a Qualified Financial Adviser as well as a Tax Specialist because some of the above can be very easy to avoid and plan for.  Make sure ALL your bases are covered.

If you would like more information or wish to make an appointment to discuss your own situation please call 657 684 094 or email 


120 Avenida Dr. Artero Guirao 2C

San Pedro Del Pinatar

30740, Murcia

Our office suite is easy to find on the main N332 through-road of San Pedro del Pinatar with easy parking.

Blacktower Insurance Agents & Advisors Ltd is authorised and regulated in Cyprus by the Insurance Companies Control Service and registered with the DGS in Spain.

Blacktower Financial Management (Cyprus) Ltd is authorised and regulated in Cyprus by the Cyprus Securities & Exchange Commission and is registered with the CNMV in Spain.

This communication is not intended to constitute and should not be construed as investment advice, investment recommendations, or investment research. You should seek advice form a professional adviser before embarking on any financial planning activity.