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Viewing posts from: November 2000

History: How it can save you money

By John Hayward - Topics: Spain
This article is published on: 31st May 2023


“If you think you have it tough, read history books.” Bill Maher
I was not particularly interested in history at school, mainly because the history masters (I went to a grammar school where we were taught by masters in moth-eaten gowns and who wore their ties outside their jumpers) would want to teach us about aspects that I had absolutely no interest in.

The Dark Ages, for example. They are called dark ages for a reason. These days I will happily surf the web (can we still say that?) going off-piste (no holding me now) and finding out brilliant historical facts that I am interested in and not what I am told to be interested in. Or maybe I am being told, in this Artificial Intelligence world that we now live in. Having said that, I have not felt any pressure to learn any more about the dark ages.

What is my point here? History is important because it can help us to make decisions. The problem is that, although we have plenty of information to refer to, and perhaps have taken on board, we all too often forget, or even choose to ignore, the “lesson”. In the investment world, it appears that everything that is happening now never occurred before. Or maybe it did but in a dark age when nobody was literate enough to write down what was going on.

Sell low, buy high. Isn’t that a ridiculous investment strategy? It seems not, to some. I have been in the company of many people over the years who believe that they know when to sell and when to buy back in when “things are better/markets have settled/it is less rainy/the dog has been to the vet”. This strategy has consistently proven itself to be flawed. Although past performance is no guarantee of future performance, history can give us an idea of what could happen in the investment world after different global events. In more recent years, the financial crisis of 2008 and Covid-19 in 2020 have been big tests. After both “incidents”, those who stuck with it have been better off.

Financial Express

Source: Financial Express

Focusing on a stock market index that many British people are familiar with, the FTSE100, in the last 15 years to 1st May 2023, there have been 4 years that have been negative. I apologise for spelling this out but that means 11 years have been positive. 11-4. I like that score. The average annual gain of the index over that period has been almost 13%. Even more interesting is the tendency that a bad year is followed by an outstanding one. This is why, when people sell, they crystallise a loss and then possibly miss the best part of any recovery.

I understand that not everybody is comfortable with sitting out large falls (2008 and 2020). To cater for this, we have solutions within our armoury which limit the downside whilst still providing long-term growth.

To find out how we can help you with your existing investments, and/or provide you with ideas for the future, contact me today at or on +34 618 204 731 (WhatsApp)

If you are feeling down, pick up a history book. It is certain to take your mind off your woes.

Am I paying too much Wealth Tax in Spain?

By John Hayward - Topics: Spain, Wealth Tax
This article is published on: 21st February 2023


Just when you thought that it was safe to win the lottery in Andalusia or Madrid, the socialist Spanish government have introduced a new
temporary Solidarity Tax.

According to Investopedia, a solidarity tax is a government-imposed tax that is levied in an attempt to provide funding towards theoretically unifying (or solidifying) projects. In other words, it is a tax on the wealthy to provide funds for the not so wealthy. Other regions still have Wealth Tax with varying allowances and this will continue without the risk of having to pay two taxes. That said, taxes are rarely straightforward and I am confident that there will be issues in the future which will result in the Spanish tax office tweaking things. It is interesting, if not extremely concerning, that Wealth Tax was introduced on a temporary basis as well. It has been around for the last 11 years. So, not really temporary in my opinion.

Wealth Tax in Spain

We are in Modelo 720 season at the time of writing, with overseas assets having to be declared by 31st March. Although not a tax declaration, the Modelo 720 naturally leads on to Wealth Tax. One of the asset types to declare is property.

In Spain, the tax office can reference the Cadastre to establish a property value. However, they do not have access to the land registry in, say, the UK. Therefore, the only price that is in writing is the purchase price. It is this value that should be entered on the Modelo 720 and subsequently be liable, or not, for Wealth Tax. My suspicion is that people have declared what they believe to be the market value and are possibly paying too much in Wealth Tax as a consequence.

Modelo 720

By redistributing wealth and utilising the allowances, and applying the 60% rule (contact me for more information), it is possible to reduce Wealth Tax (and/or Solidarity Tax) or even eliminate it completely.

We can introduce you to investment products that are not only tax efficient in Spain in terms of income tax but can help to reduce Wealth Tax.

More Spanish residents to pay wealth tax

By John Hayward - Topics: Spain, Tax in Spain, Wealth Tax
This article is published on: 19th January 2023


Valencia reduces allowance with more people having to pay
the Impuesto Sobre el Patrimonio

Further to my article from last week, and after consultation with our accountant associates, it appears that the main residence wealth tax allowance of up to €300,000 only applies after 3 years of living in the property (habitual residence). This has been questioned but, as is often the case in Spain, getting a response from the tax office can be tricky.

The tax office words that are relevant in terms of getting around this 3-year rule are “circumstances that necessarily require the change of housing”. Moving to Spain to retire or for a change of lifestyle would not generally tick that box. If there are justifiable health reasons or similar then that appears to be acceptable in terms of applying the allowance.

To emphasise the habitual residence aspect, from JC & A Abogados in Marbella: “Please note that you must live effectively and consecutively in the property for more than 3 years, so you cannot rent the house out even for one day. In addition, you have to impute a benefit in kind for the Spanish property during the same 3 years period.”

In the words of JC & A, “The 3 year period starts counting from the purchase date as long as the dwelling is inhabited effectively and permanently within 12 months as from the purchase date.”

“…..a taxpayer who bought his main home but could not live in it because it was not suitable and had to have some works that exceeded 12 months; the conclusion is that the 3-year period starts counting from the date he moved in and not the purchase date.”

Adding salt to this potential tax wound, whilst it is not treated as your main residence (even though you live there permanently), you have to pay tax on its value as if you were a non-resident.

This all seems rather inequitable but is the law as things stand.

If you would like to discuss managing your money in these volatile and uncertain times, please do not hesitate to contact.
Visit John Hayward of The Spectrum IFA Group or complete the form below.

The Spanish State Pension

By John Hayward - Topics: Retire in Spain, Retirement, Spain, UK Pensions
This article is published on: 21st November 2022


How many years must one work in Spain to claim a Spanish State Pension?
When Brexit finally happened, one of the concerns that I had was regarding the bilateral agreement between the UK and Spain. I wanted clarification on whether years worked in the UK would continue to count towards the years required to qualify for the Spanish State Pension. The minimum number of years in the UK is 10 years but in Spain it is 15 years. Under the Trade and Cooperation Agreement made between the EU and the UK on 24th December 2020, and specifically the Article SSC.7: Aggregation of periods, it states that the periods of employment must be considered “as though they were periods completed under the legislation which it applies”.

How does this work in practice?
If someone has worked for 9 years in the UK and 14 years in Spain then, under the individual countries’ rules, neither minimum has been achieved. However, both countries’ rules are satisfied when adding the 9 to the 14 and vice versa. That is not to say that one would receive 23 years’ pension from either or both countries but merely that the person qualifies for a pension in both countries; 9 years’ pension in the UK and 14 in Spain. Details of how the pension is calculated can be found in my colleague Chris Burke’s article Claiming your UK State Pension whilst living in Spain/EEA.

Pensions Spain

Can you continue working in Spain whilst claiming a Spanish State Pension?
In the UK, you can receive your State Pension and continue to work. You will then only pay Class 4 National Insurance contributions, those associated with profit, as no further pension benefit will be accumulated. In Spain, you cannot claim your full State Pension entitlement if you continue working, and you do not employ anyone. However, it is possible to continue working beyond Spanish State Pension age and claim a reduced pension subject to certain conditions, one of these being that you must have achieved the minimum number of years to claim 100% of the Spanish State pension. This is currently 35 years but will be increasing over the next few years. You can once again apply the principle as discussed above in terms of adding the years in the UK to achieve this minimum.

To find out what your options are and how we can help you with your retirement planning, please contact me at or call/WhatsApp me on (0034) 618 204 731.

Making a Will in Spain

By John Hayward - Topics: Spain, Spanish will, Succession Planning
This article is published on: 22nd August 2022


Make the list. The kids will love you even more

Wills in Spain

After what has been a long hot summer, made even hotter with the wild fire we experienced here on the Marina Alta last week (I didn’t panic although my 10-year-old daughter asked me why I did. Thank you to the fire services), I felt that it was time to assess what is going on generally.

I now have a huge list of topics to cover and I aim to get bits and pieces out to you over the coming weeks. I will make just one point regarding investments. Those who are waiting for the war in Ukraine to end, or inflation to return to 2%, before investing could be in for a long wait and miss an opportunity. We have seen a significant bounce in financial markets after a nasty first half of 2022.

Making a Will in Spain

I wanted to start this new batch of information with a subject that I have written about before but is still relevant and extremely important. I was with a client a few days ago and we were discussing how essential it is that his children know what assets he has for inheritance purposes. He then commented on the fact that a neighbour died recently and nobody knows her next of kin. What a crazy situation. As in other countries of the world, unclaimed assets will end up boosting Spain’s coffers. From what I have researched, there are many millions, if not billions, of euros that will possibly help us all (no guarantee) if left unclaimed due to there being no will or any other notification of the next of kin.

Even if there is a clear instruction regarding who inherits what, I have experienced the problem of looking through draws and cupboards and sorting through documents, most of which had been kept unnecessarily.

Plans that we at The Spectrum IFA Group arrange have the facility to nominate beneficiaries. Not only does this save a lot of hassle for inheritors but it can also take the policies outside probate thus making funds available much sooner.

Making a Will in Spain

Click on the link below to access The Important Information Document which is here to help and can be used in whatever way you want to use it. It is editable and so you can alter categories, etc. Some people might be uncomfortable telling their next of kin exactly what they have. I appreciate that. However, it is still useful to provide the name of banks, insurance companies, etc., and to note things like Premium Bonds and other investments. You can also name your gestor, accountant, lawyer, and even your financial adviser. I can assure you that your beneficiaries will be grateful, in more ways than one.

If you would like to discuss managing your money in these volatile and uncertain times, please do not hesitate to contact me using the details below.

Visit John Hayward of The Spectrum IFA Group or click on the link below. You can also take a look at an overview of who I am and how, with the support of The Spectrum IFA Group, I can help you.

Spanish Tax on Personal Pensions

By John Hayward - Topics: Pensions in Spain, Retire in Spain, Spain, Tax in Spain, Tax on Pensions
This article is published on: 1st June 2022


Further to the recent article written by my colleague Charles Hutchinson regarding temporary annuities and their taxation of annuities in Spain, I am expanding on the tax treatment of personal pensions generally.

Depending on the type of retirement income that you are receiving, it will either be taxed as regular income, “work” income as the Spanish call it, or savings (passive) income with a different set of tax rates being applying to each type. It is generally understood that the income from pension plans that received tax relief (effectively where the contributions were deducted from income before tax was calculated) will be treated as work income.

The word “annuity” is used in a general sense in the UK as the regular payment which comes from a pension scheme. It is possible to convert a personal pension fund to an annuity, with a view to guaranteeing a fixed income for life albeit waiving the right to the capital value of the pension pot. Whether or not it is advisable to purchase an annuity is another matter. This will depend on personal circumstances.

As far as Spain is concerned, an annuity is a form of income that attracts favourable tax treatment. An annuity in Spain is either temporary or for the whole of life. The annuity is purchased. It is not income drawn from an existing pension fund unless that fund is encashed to buy the annuity. At that point though there is the possibility of a large tax bill on the encashment.

The key points here are that:

  1. Not all pension income is treated the same way for tax
  2. Declaring work income as an annuity is not correct and, if reported intentionally in this manner, it is possible that it will be treated as fraud. The Spanish tax office is making a special effort right now to check on this. They can go back at least 4 years with their investigations
  3. Care should be taken when accessing retirement income to make certain that, not only is it being declared in a lawful way, but also that you do not leave yourself open to a nasty and unexpected tax bill

Contact me today for more information on how we can help you to protect your assets from unnecessary taxation and make more from your money, protecting your income streams against inflation and low interest rates, to talk about Spanish Tax on Personal Pensions or for any other financial and tax planning information contact me at: or call (+34) 618 204 731 (WhatsApp).

Spanish Tax Guide 2022

By John Hayward - Topics: Spain, Tax in Spain
This article is published on: 24th May 2022


Over the past year or so, with Covid-19 restrictions being lifted and impact of Brexit becoming clearer, we have received many enquiries regarding taxation in Spain, not only from people who are looking to move to Spain but also from those who already live in Spain, in some cases for many years. There are areas of tax that are complex, not helped by the fact that you might receive different opinions on the same tax subject.

In countries such as England, Wales, and the United States of America, there is a Common Law code. Established in England in medieval times, it is based mainly on case law. A decision made many years ago could still apply today. This is a system which has allowed us to get used procedures which have been in place for a long time. This is not necessarily the case in Spain.

Spain, like other countries in Europe, have a Civil Law code. Within this system, rules can be updated regularly. As flexible as this system is, unless you are completely up to date with the latest rules, which may only have been recently altered, it makes it extremely difficult to know how exactly you should be declaring your income and gains in Spain.

Please click on the link below to download our latest Spanish tax guide which is designed to give you a better understanding of the different Spanish taxes, to whom they apply, and when they need to be paid. Spain is made up of autonomous regions and so there can be different rules and tax rates that apply.

However, the general principles are the same or similar throughout the Spain. You will be subject to at least one of these.

  • Income Tax
  • Inheritance Tax
  • Gift Tax
  • Wealth Tax
  • Capital Gains Tax

If you have any questions, please get in contact. If we do not know the answer to your tax questions, we know someone that does.

Spanish tax on UK property

By John Hayward - Topics: Spain, Tax, Tax Declarations, Tax in Spain, UK property
This article is published on: 29th March 2022


In February I wrote about the impact on investments with Russia’s invasion of Ukraine and inflation rearing its ugly head. For the last month or so, the movement of global stock markets has attracted comparisons to a violin player’s arm joint and the undergarments of a professional lady. This is possibly the future for investments for a while although there appears to be more positive than negative movement (at the time of writing in case there has been a sudden catastrophe).

In the meantime, away from the uncertainty of how much a tank of fuel will cost in 6 months’ time, I want to mention something regarding Spanish tax on UK property.

31st March 2022. The end of the declaration period for everyone’s favourite, the Modelo 720. Although this is not a tax declaration, it does highlight assets and how these might be taxed in the future, whether this be capital gains tax, wealth tax, inheritance tax, or income tax. Focusing on the latter, I believe that it is generally not appreciated that a tax resident in Spain has to pay income tax on a UK property, even if it is not rented out.

It is (fairly) well known that, if you are a not tax resident in Spain, and you own a property in Spain, and you receive rental income, you have to pay Non-Resident Income Tax (NRIT) or Non-Resident Imputed Income Tax (NRIIT) if you do not receive rental income, perhaps both depending on how much of the tax year (1st January to 31st December) it is rented out. Imputed rent is a fictional amount of rent that the Spanish tax office decides is what you are receiving based on the cadastral value. It works the other way around. That is, if you are a tax resident in Spain with a UK property, and you do not rent it out, you still have to pay tax on the imputed rent.

How is the tax calculated? UK properties do not have a thing called a cadastral value. Some have said on the (not always reliable) worldwide web that it would be the rateable value that would be used. The actual rule is that, if there is no cadastral value, the tax is based on 50% of the original purchase price with the application of a rate of 1.1%. That gives you the imputed rent. It is this figure that would be used for income tax purposes.

For some people, this may not introduce a problem, especially when considering the double tax treaty between the UK and Spain. It is the fact that those who should have been declaring this “income” have not been and my message could prompt a chat with their tax agent. The Spanish tax office is regularly sweeping up what they (or their computer) see as outstanding items, often up to 4 years old in line with Spain’s statute of limitations.

Contact me today for more information on how we can help you to protect your assets from unnecessary taxation and make more from your money, protecting your income streams against inflation and low interest rates, or for any other financial and tax planning information, at or call or WhatsApp (+34) 618 204 731.

Modelo 720 – the end of late filing fees?

By John Hayward - Topics: Modelo 720, Spain
This article is published on: 28th January 2022


Is this the end of ridiculously huge fines for the Modelo 720?

Although the ECJ has not stated that the Modelo 720 (the declaration by Spanish tax residents of assets outside Spain) is illegal, the European Court of Justice agrees with the European Commission that Spain has failed in its obligations under the free movement of capital because Spain has been charging disproportionate fines for non or late disclosure. The ECJ notes that Spain does not treat the disclosure of Spanish assets in the same way.

Spain has seemed to ignore pressure before on this subject but the ECJ has stated that, if Spain does not address this issue, Spain will face large fines. Perhaps this time Spain will act.

The Modelo 720 – Does this affect me?

In 2013, the Spanish government launched an “anti-fraud” plan to prevent tax evasion. It appears that this was originally aimed at Spanish nationals who were “hiding” their money outside Spain, but it soon became applicable to non-Spanish nationals living in Spain.

The Modelo 720 has to be completed by 31st March of each year and is based on assets held as at 31st December of the previous year. In general, you will be deemed tax resident if you are in living in Spain for more than 183 days of a calendar year (which is the same period as the tax year).

Smart Banking

By John Hayward - Topics: Banking, internet banking, Spain
This article is published on: 1st September 2021


Don´t panic Mr Mainwaring!

We’re almost 2/3rds through 2021 and there seems to be a lot more optimism, in Spain at least. However, certain problems exist and are not likely to go away any time soon. One of these problems is with banks. My particular bank branch did not exactly cover itself in glory over the last 17 months or so, allowing long queues to form outside, allowing only one person in at a time (when there were three members of staff inside!?). We all understood why they were doing it, but opening for only 2¾ hours a day and then not being particularly helpful if you could get in during that short window of time, made us feel a little bit let down.

The days of the local bank manager who knew everything about you, from the details of your spending habits to what school the kids went to, have long gone. There is little or no familiarity with customers and the main aim for the bank staff these days is to sell products, often with questionable relevance to the customer and rarely explained sufficiently, in my experience.

Let us think about the future of high-street banking. My opinion is that there will be a lot less bank branches in 10 years’ time than there are today, maybe none. I avoid going to a bank as much as I can, other than to grab some cash outside (from the machine and my account, obviously). I do all of my banking online. I have no fear of it but I appreciate that there are those who do and do not trust the system. I also appreciate that there is the possibility of fraud and theft but, as long as I follow the instructions like “Don´t give your card and pin number to someone else!”, I am confident that any money stolen will be covered by the bank. There are people who keep their card and a note of the pin number in the same handbag/wallet. The bank will not be very sympathetic in these circumstances. Also, be wary of anyone taking your card where you cannot see them. Cloning cards is a popular pastime for some. The overall feeling here is that those who do not like or want online banking will not have the choice in the future.

Everything is pointing towards branchless banking. That means people having to do all of their banking online. For me, that is perfect. The internet connection permitting, I can go to my bank at any time of the day. I don’t have to wait for it to finish a chat about the weather or the health of their cat before being attended to. I don´t have to find a home for half an Amazon Rainforest worth of paper and, generally, on the homepage there is a smiley photo of a person who may, or may not, work for the bank but that doesn´t matter. In order to perform certain actions online, you need to have registered a mobile telephone. For those not yet in the world of smartphones, it might be time to arrive. A smartphone is not essential for internet banking but the functionality of a smartphone just makes the whole process so much neater and easier (eventually). Whether you use a phone, iPad, laptop, or PC for your internet use, you will need the phone to confirm certain transactions and instructions.

I mentioned some months ago about ways of getting around bank charges that have been applicable since Brexit. Although the withdrawal agreement stated that the UK would remain part of the Single Euro Payments Area (SEPA), certain banks decided to apply charges to UK transactions with the excuse that the UK was no longer part of the EU. They have not taken any notice of the agreement and customers have been paying exorbitant fees for banking. I have recently discovered that a client of mine has been charged €18 a month on a small private pension of around £170 per month. This is being paid to her Spanish bank and they are charging, because they can. She challenged them on this (10% fee a month) and they said that they didn’t realise that it is a pension. However, they still have not done anything about it. Therefore, I have helped the client sort out a new banking arrangement for these transfers, saving her hundreds of euros a year in bank charges, as well as providing her with an exceptional exchange rate.

Brexit has introduced new problems and highlighted existing ones. Undoubtedly, as we progress through the journey and consequences of Brexit, we will have to deal with new taxes, new charges, new barriers, and new paperwork. We at The Spectrum IFA Group can help to make that journey less painful and less complicated.

Contact me today to find out how I can help you make more from your money, protecting your income streams against inflation and low interest rates, or for any other financial and tax planning information, at or call or WhatsApp (+34) 618 204 731.