Summer is well and truly here so it’s time to enjoy everything that brings, especially before it gets too hot! It’s hard to beat Spain when we have so many sunny days – a walk along the seafront or a stroll through the forest to keep cool and listen to the nature.

From a financial perspective, I am always here to update you on anything new or tips/hints to keep your finances healthy – this month we are focusing on the following:

• Biometric card for entry & exit to Spain – Autumn 2024
• Inheritance tax & gift tax in Spain
• 80+ state pension for UK persons living abroad

Biometric card for entry & exit to Spain
The EES (Entry/Exit System) will be introduced by the EU in Autumn 2024 – this is an automated system for registering travellers from the UK and other non-EU countries each time they cross an EU external border. It will require third country nationals, including UK nationals, visiting the EU to create a digital record and provide their biometric data (fingerprints and facial image) at the border when they enter the EU’s Schengen Zone. It is expected that Spanish Green Certificate holders may face significant delays and difficulties at borders if they do not have a TIE.

The system will register the person’s name, type of travel document, biometric data (ie fingerprints and captured facial images) and the date and place of entry or exit each time they go through a ‘checkpoint’, which will in real terms replace stamping of passports (so those regular travellers to the EU won’t have to worry about running out of passport pages with stamping!).

Whilst hopefully making travelling easier and quicker, it’s also clear to note that there will be a ‘hard electronic’ record of which borders you cross and how many days you are spending in each country, which from a tax perspective could be interesting. Let´s see how long it takes for this to also become common practice at ‘road borders’.

They purely look at the amount you are inheriting and if you are a Spanish tax resident apply the following to work out how much tax you need to pay them (if any):

• Your relationship to the deceased, (the more distant a relative you are, the more tax)
• The amount being received, (there is a progressive tax upwards with the more you inherit)
• The value of existing assets by the inheritor
• Which region you are tax resident in Spain and where additional ‘local’ laws apply

Inheritance tax starts from zero (allowances) and can reach up to 82% for a distant relative. Therefore, it’s imperative to understand what this number is should the situation arise, enabling you to plan effectively and maximise the remaining monies. It´s only my personal opinion but why would you not want, with proper planning, to maximise those ‘hard earned monies’ your relatives accumulated and left you over their lifetime?

On a side note, if there are relatives in other countries, (perhaps you have siblings), the Will can be set up to make sure you receive the same amount from the estate net of inheritance tax -the executor of the Will can deduct the tax from the ‘pot’ and then distribute accordingly – therefore the tax can be paid from all members receiving the inheritance not just yourself and enabling you to receive the same amount in real terms. This is something I have come across on a few occasions.

Another way is to receive any monies is as a ‘Gift’ whilst the donor is still alive, the tax on these is between 5-9% (again, the closer the relation the less tax you pay, so for a parent making a gift the tax would normally be 5%). Furthermore the location of the assets, (such as property in the UK), will make a difference to the amount paid.

As you can probably appreciate, by understanding these rules you can start to plan how and when best to receive any assets from relatives/parents. This is an area in which we work closely alongside tax advisers/planners almost every day, making sure our clients take sound financial/tax planning advice and a strategy is implemented to make sure the money is:

• Received as tax efficiently as possible
• Managed carefully to provide a tax efficient income for life (and for any other close family members)
• Invested safely and strategically
• Set up in an inheritance friendly manner for future generations

If you would like to discuss any of the topics above in more detail or you would like to have an initial consultation with Chris to explore your personal situation, you can do so here.

Click here to read independent reviews on Chris and his advice.

If you would like any more information regarding any of the above, or to talk through your situation initially and receive expert, factual based advice, don’t hesitate to get in touch with me.

Due to emotional and unfortunate circumstances faced by some of my clients recently, I am drawn back to the importance of a simple document we created some years back, during our Covid lockdowns of 2020, and have recommended that our clients do the same.

Most have embraced it, some probably haven’t. Personally, I think it’s of benefit to everybody, but we all have our own ways of doing things. A lot of time and effort went into producing the document, based on previous client experiences, and our own. There didn’t seem to be an appropriate name for it at the time, so we simply called it ‘’The Folder’’.

The whole point of creating your folder is to ensure that there is a record of your assets, your important contact information and plenty more. It is a single file or folder and can be digital or physical. This folder will allow you to detail any important information / assets where it is vital a record is kept. We think we have covered everything and believe this document will make things a lot easier for everybody in many different circumstances.

Recent dealings with my clients reminded me to review my own folder and unsurprisingly there were a few changes to be made………

There are many scenarios where you´ll be thankful for making the folder. When I moved house I went straight to the folder and had all the company’s contact information as well as all the policies or account details which were relevant. This made informing them all much easier. I´ve also lost family members where finding their folder reduced the stress in dealing with their estate. In these moments of stress, you can find yourself trawling through endless pieces of paperwork to ascertain asset and account details, then you get that lightbulb moment…….. why wasn’t it all documented.

And that’s exactly why the folder was created.

Apart from dealing with personal practicalities, like moving house, I believe the folder comes into its element when having to deal with the loss of a loved one. Rather than spending hour after hour trying to unravel their finances, all the information is to hand, in one folder. Having experienced both sides of this situation (one with a folder and one without) I completely understand the additional pain caused by what should have been easy administrative tasks. The folder took most of that pain away. Speaking to some of my clients recently I know they are feeling the same………….

As I mentioned earlier, the folder can be physical or digital. For the physical folder it is vital to only list information that would not create a problem should that folder end up in the wrong hands. So, I have only listed the names, telephone numbers, policy / account numbers of all our assets. It would give enough information for someone to be able to deal with our affairs with minimum hassle.

Some still ask, is it worth the effort?
Well, I think it is. A time of loss can be stressful enough without having to try and piece together the deceased’s financial affairs. This can be a really difficult time for family members. However, preparing the folder is much more than avoiding stress; if you leave behind an administrative nightmare you could delay the access of inheritors or beneficiaries of funds and potentially cost a small fortune in legal fees. Imagine trying to track down investments you have no record of or pensions that may have been held for 50 years or more?

To give you an example of this, the UK Department of Work and Pensions estimate that there is currently more than £400 million sitting in unclaimed pensions pots in the UK. Good luck trying to find out if you have one!

• Personal pension documents
• Employer pension details
• Details of any entitlement to state pensions
• List of bank accounts with account numbers, login details
• Details of any credit cards
• Property, land and cemetery deeds
• Proof of loans made
• Vehicle ownership documents
• Stock certificates, brokerage accounts, investment platform details, online investment account details
• Details of holdings of premium bonds, government bonds, investment bonds

This list is based on my own experiences and those of my clients – you need to be thorough when completing the folder, ensuring nothing is left out.

And don’t forget to review your folder. I will admit to being guilty of not keep my folder up to date and tend to only look at the folder when something significant changes in our lives. It´s easy enough to overlook a change in insurance company or something that at the time doesn’t seem hugely important. I reviewed mine recently and it was just that – small changes to our circumstances, but apart from being hidden deep within our emails there was no other record of those changes.

I would recommend reviewing the folder on an annual basis, but if you’re extra diligent you should review and update every time something changes. For example, if you change insurance companies then add the new details and delete the old. This is a continuous job, its not something you do once and never look at again.

Most importantly – please remember to tell someone about your folder!

Someone needs to know you have made one and whether it´s digital or physical. If its digital they need to know if there´s also a password. Personally, I have sent copies of mine by email to family members, so they have a record of it. They don’t need to know your passwords, just the basics.

Remember, there is very little point going to all this effort if know body knows it exists.

I hope you consider completing your folder. Unfortunately, most people only consider it when they´re trying to deal with a situation and as mentioned, they have that lightbulb moment. Taking an hour out of your time now will save someone many, many hours later down the line.

If you have any questions about The Folder or other aspects of your finances, please feel free to reach out on chris.webb@spectrum-ifa.com

When to sell your UK home and whens best to move to Spain

It’s a big decision to make, selling up in the UK and moving to Spain, but it’s also a decision that needs careful planning when it comes to making sure you don’t get caught up in the Spanish Tax system unnecessarily.

The best way to explain what I mean is to look at a typical example.

Mr and Mrs Smith decided enough was enough, and they put their home in the UK on the market with the intention that once it sold, they would move to Spain. The house sold to the first viewer for £500,000 in February 2023, with a quick completion needed, so things moved fast. The couple had owned the house since 1980 when they paid £100,000 for it, so a nice £400,000 profit.

If they Upped sticks to Spain in March of 2023, then this could have terrible implications, which many people aren’t aware of. Essentially, in many circumstances (not all, depending on your age etc.), Spain will tax you on the capital gains made on a UK property if you are considered a tax resident in Spain in the year in which you sell the property, even though it was your main residence. This of course is not what we are used to in the UK.

So, in this example, because the couple moved to Spain in March of 2023, they will spend more than 183 days in Spain this year, deeming them tax residents in 2023. Therefore, the £400,000 profit made on the sale of the UK property will first need to be converted to Euros, and then capital gains tax will be applied at a rate of between 19% and 26%, meaning a tax bill due in 2024 of approximately €112,000. Imagine the shock when sitting with your tax adviser in 2024 to file your first Spanish tax returns, and he informs you how much tax you will have to pay.

So this is exactly why careful planning needs to take place when sorting out the timing of your move to Spain.

In this theoretical example, by simply delaying the move until after the summer, then Mr and Mrs Smith will no longer have spent 183 days in Spain in 2023, and will have still been UK tax residents that year. By doing this they will have completely avoided any tax implications here in Spain, a huge saving for them.

So, the cost of a short term rental after selling their home, or staying with family, may seem a bit of a hassle, but it will certainly be worth it in the long term.

There are also other things to consider. Tax free lump sums from UK pensions are taxable here, as are the profits on any ISAs you may have, so it’s not just selling the house that needs careful planning when timing your exit from the UK.

Make sure you leave the UK in the most tax efficient way before starting the next stage of your life here in Spain.

Watch the podcast with Jeremy Ferguson and UPSTICKS.ES below

Mortgage Interest rate update – June 2024
On June 8th, the European Central Bank (ECB) announced the decision to lower interest rates, from 4.5% to 4.25%. It was as expected, with the institution itself pointing out for months in advance that June would likely be the time for a change.

Companies and governments will be able to continue financing themselves at a lower cost, having adjusted to interest rates that have reached their highest levels since 2001. The announced cut is of course marginal, especially in comparison with the dramatic increases from zero in July 2022 to 4.5% in September of last year – two years during which the cost of financing skyrocketed and banks turned off the credit tap.

Inflation is now showing signs of subsiding. The ECB’s objective was to cool the economy in order to stop the upward spiral in prices, and it seems to have succeeded – the inflation rate in the Eurozone reached a maximum of 10.6% in October 2022 and currently prices are growing at a more subdued rate of 2.6%, according to May data. At this level, it is close to the ECB target of 2%. The rate cut is designed to lower borrowing costs, thereby encouraging consumer spending and business investment. This increase in economic activity is expected to help balance inflationary pressures and move us further towards the ECB’s inflation target.

The Eurozone has recently been experiencing a noticeable slowdown in economic activity. Additionally, geopolitical tensions and trade uncertainties have exacerbated these economic challenges, prompting the ECB to act. This move aims to address the Eurozone’s slowing economic growth and persistent inflation concerns, reflecting the ECB’s strategic role in supporting economic stability. And, although economic growth has been anaemic (barely 0.4% in the euro zone in 2023), the ECB may have saved the economy from recession, understood as two consecutive quarters of negative growth.

ECB President Christine Lagarde indicated that the ECB is prepared to implement further measures if necessary, depending on future economic direction. The central bank will continue to closely monitor key economic indicators, such as growth rates, inflation trends, and external economic factors, to guide its policy decisions. Mortgage interest rates in Spain have started to fall, which is good news for borrowers, but there is no certainty on the timing or the scale of future rate cuts.

Should you have any enquiries regarding the content of this article, or any other questions relating to mortgages in Spain, please do not hesitate to reach out to us for further information.
Patricia Nadal: spain@spectrum-mortgages.com

www.spectrumspanishmortgages.com

Baby boomer homes will have to be sold off in a “fire sale”

I wrote in a recent article about the disadvantages of holding excessive real estate in one’s investment portfolio.  I highlighted a few issues around costs and illiquidity along with more recent poor performance, and the need to hold liquid investments that can be passed down outside of your estate.

I was therefore interested to read, in a recent article in the Daily Telegraph, about the subject of ever increasing Inheritance Tax liabilities being suffered by so called ‘Baby Boomers’.

Referring to the article by Rob White of the Telegraph –
Baby boomer homes will have to be sold off in a “fire sale” as their families are hit by unaffordable inheritance tax bills, wealth experts warn.

Baby boomers will pass on £1.2 trillion in inheritance over the next few decades. But a combination of property values and a lack of preparation could leave their loved ones in financial peril at the very height of their grief.

UK Inheritance tax (IHT) can run into hundreds of thousands of pounds and must be paid within six months of death. Unless the deceased left enough behind in savings, their cash-poor descendants could be unable to afford their own inheritance.

Experts believe this could lead to a flood of homes hitting the market, as the next generation is forced to sell the family silver and take “punitive” loans to pay huge tax bills they were completely unprepared for.

As Britain’s troops came home from the Second World War, expanding the population was probably just a by-product of the first thing on many of their minds. Back home after six years of battle and bloodshed, they were finally reunited with the loved ones they left behind and the lives they’d put on hold. The next three years heralded a birth rate not seen on our shores since the early 1920s. Over a million babies arrived in 1947 alone as the baby boomer generation was set firmly in motion.

Around one in four are thought to be millionaires, while last year estate agent Savills found that over 65s hold around 43% of housing wealth. Their children could inherit £90bn in the next decade alone and there are fears that passing on such substantial estates could lead to unintended consequences, both for those they loved the most and the country as a whole.

IHT in the UK is now a 40pc “death tax” charge on someone’s estate.

Everyone gets an allowance of £325,000 before anything is due, with the possibility of another £175,000, known as the nil-rate band, if you’re bequeathing a property to your children or grandchildren.

There’s nothing to pay on what you leave to a spouse or civil partner and, even if you’re widowed when you die, your late partner’s allowance can still be used. However, 40pc of anything you inherit above your allowances must go straight to the taxman. Neither allowance has increased since 2020 and they’re both frozen until at least 2028. There were hopes Chancellor Jeremy Hunt would scrap IHT in this year’s Budget, but he didn’t.

As a result, HMRC is already reporting that families handed over a record £7.5bn in IHT last year – an increase of £400m – and forecasts suggest it could rise another £2bn before 2030.

The amount of IHT paid by families is climbing rapidly.

Experts fear this is all combining to create a major problem for the UK housing market.

When someone dies, the executors of a will have to apply for probate to legally deal with the estate. However, it often isn’t granted before IHT becomes due. Although you can pay it with cash from the estate, such as the deceased’s savings, you cannot sell their assets before probate is granted.

This can mean people are not only forced to sell, they’re also pushed into taking expensive, long term loans until completion – all at a time of mourning.

Harry Bell, of wealth managers Charles Stanley, said: “Being an executor is not an easy job and it’s very stressful. Often, they’re the children of the deceased, so they’re already in a fragile and difficult position and are constantly reminded they’ve lost a loved one.”

“To add insult to injury, the IHT bill has to be paid within six months and probate usually takes longer than this. This often means money must be borrowed at punitive rates to cover the bill. If there isn’t enough cash in the estate, investments and property will have to be sold to cover the bill. This can be a long process, all while the funds borrowed are accruing more punitive interest.”

Chris Rudden, of investment platform Moneyfarm, said: “The average 35-44 year old has less than £7,000 in savings and they’re the first generation that’s poorer than the one before.”

“Property prices are generally very high now, particularly in the south, where there are 600,000 properties over £1m. If you’ve suddenly got £100,000 IHT to pay and only £20,000 in the bank, it’s not going to get you very far.”

“Many, many estates will have one of these properties, possibly even two, and would be way above the threshold with other assets. A lot of the next generation don’t have the money sitting around to pay the tax, so they may have to sell the assets they’re inheriting.”

“That will negatively affect house prices, both for those selling and those not. We saw in 2008 and 2009 what falling house prices can do, particularly in the US. Either the Government will change the policy on IHT, or people may have to foot the bill for something they can’t afford.”

“We could be looking at a property fire sale and the next generation is sleepwalking right into it.”

Please get in touch if you would like to discuss tax efficient investments that can be left to your loved ones and beneficiaries outside of your taxable estate.

Owning our home is generally considered to be a good idea.

It provides us with creature comforts along with a sense of security, particularly in our retirement years.

Is investing in ‘bricks and mortar’ a good idea?
Perhaps not, if you are selling a UK property whilst resident in Spain, as I am currently.
Apart from capital gains tax considerations and selling costs, a recent BBC News report says:

House prices fall as lenders raise mortgage rates in the UK
House prices fell in April as potential buyers continued to face pressure on affordability, according to Nationwide. The UK’s largest building society said that UK house prices were down by 0.4% compared with the previous month, with the average home costing £261,962 (some 4% below the peak of summer of 2022). The rising cost of borrowing is a key factor behind the recent drop in property values.

Rock-bottom rates long gone
Mark Harris, chief executive of mortgage broker SPF Private Clients, said, “There are likely to be ups and downs in mortgage pricing in the weeks and months ahead, but ultimately borrowers will have to get used to paying more for their mortgages as the days of rock-bottom rates have long gone.”

This is the second consecutive monthly fall in UK house prices, according to Nationwide’s data. Factors influencing regional property prices vary widely across the country, but the national headline figures have been downward. This data is based on the building society’s own mortgage lending, which does not include buyers who purchase homes with cash, or buy-to-let deals. Cash buyers account for about a third of housing sales.

On an annual basis, the pace of house price growth slowed from 1.6% in March to 0.6% in April

You can read the BBC News article in full via this link https://bbc.in/4a0GXfO .

The article highlights the risk of being overexposed to property in your investment portfolio.

Just when you want to cash in, market conditions may not be favourable.

And you cannot usually sell part of a property – it is an all or nothing transaction.

A well-diversified global investment portfolio is a different proposition altogether. It provides access to a range of valuable growth opportunities, it is constructed to ensure your personal risk profile is at the centre of your investment strategy and it can be highly tax efficient for UK expatriates living in Spain.

Please feel free to contact me for more information about this subject or to book a call for an informal chat.

How would you feel knowing that your hard-earned savings could be earning 9.6% pa for the next 30 years but that you have opted for an alternative paying just 2% pa instead? Ok, this is quite provocative as they are two different types of savings.

According to the Schroder 30-year forecast, these could be the average annual returns on the Indian stock market and deposit accounts respectively.

So now you may be rationalising your decision to use a deposit account by saying something like “Oh well, I don’t like the stock markets and I don’t know much about India”. This is fair enough.

Your best friend has just said “We are off to the Caribbean for a few weeks and we have always wanted to go to Patagonia so we may nip across there for a bit after the Caribbean” …. “Blimey, how can you afford that?” is what you might say, or at least think.

How interesting it would be to hear “We put some of our money in shares in Indian companies and they have paid for the trip” Your average return of 2% pa may now seem pretty sickening.

Would you invest for 30 years? Maybe, maybe not. Will you be around for 30 years, depending on your current age?

And here’s a funny thing

• At age 50 your average life expectancy is 82 for men and 87 for women
• At age 60 your average life expectancy is 83 for men and 87 for women

There’s more

• At age 70 your average life expectancy is 85 for men and 89 for women
• At age 80 your average life expectancy is 89 for men and 91 for women
• At age 90 your average life expectancy is 94 for men and 95 for women

The older we get the more our life expectancy increases. All of this means that you could well be around for 30 years or more if you are under the age of 60. You do not however have to have a 30-year investment time horizon. The minimum period we would suggest is five years but after that there is flexibility with timing.

It is not always easy to choose your savings but here is how we help with guidance:

• Leave money aside for an emergency fund (yes, in that deposit account)
• Complete a reliable risk assessment exercise to determine your attitude towards risk
• Show you different combinations of investments around your personal risk profile and discuss the options with you
• Never put all your money in one type of investment eg not all in a deposit account
• Review your attitude to risk regularly because it changes as your circumstances change
• Adjust your investments when required to ensure you are taking the appropriate level of risk for your circumstances

Which of the following applies to your situation?

• Have too much money in bank accounts?
• Have recently received an inheritance?
• Are selling a business or have share options about to vest?
• Have losses on your current portfolio?
• Do not review your risk profile and investments at least annually?

If the answer is yes to any of these questions, please feel free to arrange a call with me using my online system to book a time that is convenient for you.

It is an opportunity to get a better outcome from your savings, provide for your family, and help give yourself a sustainable income in retirement.

Undoubtedly, you will be more relaxed too knowing that you have the right risk profile for your savings and that it is updated annually.

Every so often, I write about this cheery subject but it really is worth getting to know the basics if you do not want to suffer from, or leave your beneficiaries exposed to, the slings and arrows of outrageous tax complications. There are proposed changes to UK inheritance tax which I will discuss below.

Inheritance tax in Spain has pretty much disappeared, for some and for the time being. For example, in the Valencian Community, there is an inheritance tax (and gift tax) allowance of €100,000 for spouses, grandparents, parents, children, and grandchildren. For younger beneficiaries, the allowance is higher, as it is for those with qualifying disabilities. Since 28th May 2023, there is also a 99% reduction on the tax bill for spouses, etc. This means that there is little or no tax due for the relevant category. I am not going to write about the different tax bandings but you can contact me if you want to know more.

Taxes in Spain tend not be abolished but rather put on hold or reduced, temporarily. In Valencia, this “new” 99% reduction is the same as the old 99% reduction which was in place up until 2013 when it was reduced to 75% and subsequently 50%. Asset distribution is an important consideration, making certain that, should the thinkable happen, i.e. the reduction is changed again, spreading wealth as tax efficiently as possible is key. (Spending everything is also a way of reducing any inheritance tax liability albeit to the disappointment of those expecting some handy cash.)

Therefore, planning is necessary to decide which child receives which asset. (See below for proposed UK inheritance tax change).

Although you might read that the double taxation agreement between Spain and the UK does not cover inheritance tax, tax paid on the UK estate can be deducted proportionately from the individual’s tax liability in Spain.

Proposed changes to UK inheritance tax
The UK government is looking to move from a domicile basis to a residence basis. To determine where one is domiciled can be a complicated exercise.

The UK government website states: HMRC will treat you as being domiciled in the UK if you either:

• lived in the UK for 15 of the last 20 years
• had your permanent home in the UK at any time in the last 3 years of your life

The proposed change, effective from 6th April 2025, will be to charge individuals who have been UK resident for 10 years and keep them on the radar for 10 years after leaving the UK. This would mean that after 10 years in, say, Spain, only UK assets would be subject to UK inheritance tax. This leads us back to my point about asset distribution. Where possible and necessary, assets should be allocated to beneficiaries based on their residence to maximise the tax allowances in both the UK and Spain.

We specialise in arranging savings and investments in a tax efficient manner and have saved clients and their families thousands in taxes on the death of a spouse, partner, or parent, or even an unknown uncle in one case. I am certain that we can help you too.

Are you British and living in Spain?

One of the hardest things I have to explain to a lot of clients who live here is what the difference is between residence and domicile. My objective is always to explain things in a way that makes sense and is understood, so typically endeavouring to simplify things as best I can, very often using analogies or examples that will help me get the relevant point across.

Residence is simply where you reside, typically, where is  your ‘main’ home? That answer will then normally determine your residence, so if you live in Spain, you will be a resident here. That will then normally (not always, but in the majority of cases) also determine where you will be paying tax.

Domicile however is something very different, but I always like to say that in most cases your domicile is simply determined by where you were born. So if you were born in the UK, having spent a large part of your life there before moving to Spain, your country of domicile will highly likely be the UK.

Over the years I have seen many articles published here about how you can do certain things to change your UK domicile, and they were always full of so many ifs and buts. Without going into detail, the reality is, it is really quite difficult to lose your UK domicile. However, the reason people would try and do this is usually focused on UK Inheritance Tax (IHT) planning. This is the bit people have sometimes struggled to comprehend. If you are UK domiciled, you will pay IHT on your assets outside the UK, regardless of where you live. So ‘clever’ people would try and help you lose your UK domicile so you could avoid UK IHT in the event of your demise.

That could now all be a thing of the past, as the UK Government has recently proposed changes to how IHT is calculated. Essentially, what they are proposing is that IHT in the UK is moved to a basis where residency, and not domicile, determine whether the estate on death is subject to tax in the UK or not.

Under these proposals to move to a ‘residence based regime’ from 2025, the estates of Britons living abroad will no longer be charged UK IHT on their estates globally, as long as they have lived outside of the UK for more than the last ten years.

This could have significant and valuable implications for the amount of tax levied on death on the estates of Britons who have lived here for more than ten years.  For many people, this could be very positive and welcome news.

Being the cynic I am, the question has to be asked, why would they do this?  Well, as an example, currently the UK is a very attractive place to own property and be resident as a non-UK domicile. This creates many favourable tax breaks for these people. This is one of the reasons we hear of the huge swathes of property in London being in the hands of foreign owners.

Chancellor Jeremy Hunt announced in his most recent Budget that generous tax breaks for non-domiciled individuals will be replaced with a“fairer system” from April 2025, with new arrivals to the UK paying the same tax as everyone else after four years. This of course means that if you are changing to a residence based test in the UK, then people who no longer live there would, or should, be treated with similar fairness.

So, retirement abroad could suddenly become a much more attractive prospect for many people as a result of this change, so fingers crossed it actually happens.

If you have any questions about being a Spanish resident and Inheritance Tax, please feel free to get in touch to see if I can help answer things in a clear and concise manner.

A big thank you to all our partners and to those that attended the recent open forum in the Hotel Linder Gold, Bendinat, Mallorca.

The Spectrum Group – Susan Worthington, Jonathan Goodman and Patricia Nadal

Prudential International – Edny van den Broek

Currencies Direct – Aldine Tomlinson, Alfonso Rey & Charlotte Park

Our open forum was the perfect format, that produced plenty of attendee interaction which lots of interesting and thought provoking questions from the audience.

We look forward to our next open forum during the coming months focusing on the financial life of an expat living in Spain.

If you would like to be notified about our next event, please contact me at susan.worthington@spectrum-ifa.com