Frequently Asked Questions | Spain

There are similarities between the Spanish tax system and those of other countries. For instance, Spanish employment income is taxed in a way that’s similar to the UK’s PAYE system. However, there are key differences. Here are some of the main ones:

• The Spanish tax year follows the calendar year (January to December).
• Capital Gains Tax is progressive and based on your total gains within the year, not per transaction.
  For example:
  • Gains up to €6,000 are taxed at 19%.
  • The next €44,000 (i.e., up to €50,000) is taxed at 21%.
  • Higher bands apply above this.
    Gains from different sources—such as property sales, investment sales, and bank interest—are combined.
• Gift Tax applies, including for gifts made to family members.
• Spain has a Wealth Tax, which varies by region and is subject to thresholds and allowances.
• Inheritance Tax is paid by the recipient (not the estate), and rates can vary depending on the relationship to the deceased and the region.
• Spain is made up of 17 Autonomous Communities, many of which have their own tax rules and powers.

Possibly—this depends on your home country.
Some countries, like the USA and, to a lesser extent, the UK, require you to file tax returns or pay taxes even if you’re a tax resident in Spain.

However, Spain has double taxation agreements with many countries (including the UK and USA). These agreements usually allow you to offset taxes paid in one country against taxes due in the other, to avoid being taxed twice on the same income.

If you’re moving from the UK, it’s best to take care of certain matters before relocating.

Watch our video: “Relocating to Spain” to learn what steps to take before your move.

As soon as you’re settled in your new accommodation, we recommend seeking the advice of a financial adviser with both professional expertise and personal experience of living in Spain.

Why is this important?

• Without proper guidance, you may set up your finances in a way that later needs to be undone—this can be both time-consuming and costly.
• Navigating Spanish bureaucracy can be confusing and slow.
• An experienced adviser can help you stay on the right path and save you a great deal of time and stress.

Opening a bank account is generally straightforward. You’ll need:

• Your passport
• Proof of address
• Your NIE (Número de Identificación de Extranjero) – your official foreigner ID number

You may want assistance in applying for your NIE, as it’s an essential document for many administrative tasks in Spain.

Yes, we regularly collaborate with trusted professionals to support our clients. These include:

• Specialist Visa Lawyers
• Wills & Inheritance Tax Lawyers
• Income & Capital Gains Tax Lawyers
• Conveyancing Lawyers
• Currency Exchange Specialists

No, you don’t have to move your pensions or savings.
However, you might want to transfer some funds to:

• Improve tax efficiency in Spain
• Generate a regular income
• Reduce exposure to currency exchange fluctuations

If you have UK pensions, it’s often best to leave them in the UK until you’ve received advice on both UK and Spanish pension rules.

We recommend watching: “Why a Financial Adviser is Essential for Expats Living in Spain.”

Getting the right advice ensures you remain compliant and financially efficient in both countries.

Yes. At the Spectrum IFA Group, we provide ongoing support to our clients. This includes:

• Regular financial reviews
• Updates on tax and legal changes
• Personalised advice as your circumstances evolve

Our Trustpilot reviews consistently highlight the long-term value we provide—many of our clients have been with us for over 30 years. They also appreciate our responsiveness and dedication when they need assistance.