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Financial updates in Spain

By Chris Burke - Topics: Autonomo in Spain, Digital nomad visa Spain, Spain, Wealth Tax
This article is published on: 23rd November 2022


This month we cover the following topics (if there is anything you would like to understand more or wish to see covered in these articles, don’t hesitate to ask):

  • Digital Nomad Visa – Update
  • New Wealth Tax Implemented for those with assets over €3 million
  • New Autonomo payments from 2023

Digital Nomad Visa – Update
The Spanish Government has confirmed plans for its digital nomad visa scheme. The scheme will offer citizens from non-European Union countries the opportunity to live in Spain whilst working remotely for companies located outside the country.

The visas will be available for those who derive a maximum of 20 per cent of their income from Spanish firms and who work remotely for companies located outside Spain. The visas should bring vital help to the Spanish economic sector and that it will also help the country recover from the economic damages caused by the Covid pandemic.

Even though there has been no detailed information publicly and the law has not yet been 100% passed through Parliament, it has been publicised that the visas will be initially granted for a period of one year. There will then be the opportunity for this period to be renewed for more than five years, depending on the circumstance of the applicant.

Spain’s Economic Affairs Minister, Nadia Calviño, stressed that “the digital nomad visa will attract and retain international and national talents by helping remote workers and digital nomads set up in Spain.”

In order to benefit from Spain’s digital nomad visa, applicants must be able to show or prove that they have been working remotely for at least a year and be from outside the European Economic Area. They must also show that they hold a contract of employment or, if freelance, prove that they have been regularly employed by a company outside of Spain. Proof that they have enough money to be self-sufficient and have an address in Spain is needed too.

Spain is not the first country in Europe to instigate a Digital Nomad Visa programme. Estonia, Croatia, Portugal and Iceland already have a similar visa scheme, and in January this year the Government of Romania implemented a similar visa.

New Wealth Tax Implemented for those with assets over €3 million
Spain is set to implement a new wealth tax, its second, as the country looks for ways to raise funding to pay for social policies amid soaring inflation.

As reported by Bloomberg, those who have assets worth at least €3 million ($2.9 million) a year from 2023 will be affected, the Budget Ministry said in late September. Payments made against an existing wealth tax will be deductible from the new one, it said.

There are three ranges to the tax:

Assets Tax (Payable Yearly)
Between €3 and €5 million 1.70% payable on the value of the assets
Between €5 and €10 million 2.10% payable on the value of the assets
Over €10 million 3.50% payable on the value of the assets

23,000 people will be affected by the new tax and is expected to raise around 1.5 billion Euros. In 2024 another 204 million is expected to be raised by an increase of up to 2 percentage points on incomes above 200,000 Euros a year. There will be tax reductions for lower earners which is estimated to be worth about €1.88 billion over two years.

New Autonomo Payments from 2023
Self-employed workers (Autonomo’s) in Spain will start paying new monthly social security fees which will be based on the amount they earn. The changes will be brought into force from January 2023.

For those newly self-employed and under the age of 35:

Time Period Amount Payable
The first 12 months €60 (80% reduction)
Month 13 – Month 18 €146.97 (50% reduction)
Month 19 – Month 24 €205.76 (30% reduction)

This flat rate is a measure to promote self-employment that consists of paying a reduced monthly Social Security contribution as a self-employed person for two years.

For those who have been self-employed for two years or more:

Amount earned per month (€) 2023 2024 2025 2026
< 600 €281,50 €269,30 €257,00 €244,80
600 – 900 €281,50 €269,30 €257,00 €244,80
900 – 1.125,90 €293,90 €293,90 €293,90 €293,90
1.25,90 – 1.300 €351,90 €351,90 €351,90 €351,90
1.300 – 1.500 €351,90 €413,10 €413,10 €413,10
1.500 – 1.700 €351,90 €413,10 €474,30 €474,30
1.700 – 1.900 €351,90 €413,10 €474,30 €535,50
1.900 – 2.330 €351,90 €413,10 €474,30 €535,50
2.330 – 2.760 €351,90 €413,10 €474,30 €535,50
2.760 – 3.190 €351,90 €413,10 €474,30 €535,50
3.190 – 3.620 €351,90 €413,10 €474,30 €535,50
3.620 – 4.050 €351,90 €413,10 €474,30 €535,50
>4.050 €351,90 €413,10 €474,30 €535,50

In summary, the current minimum fixed payment of €294 will be changed to a progressive system of 13 instalments, depending on income. This will be introduced over 9 years. It’s important to note that these changes have not yet been finalised and there are still some details to be agreed.

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. You can book an initial consultation via my calendar link below or email/send me a message.

Autonomo or set up a company/SL in Spain

By Chris Burke - Topics: Self-employed in Spain, Spain
This article is published on: 22nd November 2022


After the recent news from the Spanish Government that they are set to change the Autonomo tax payment structure, many questions have arisen. The main questions surround if it will be cheaper, easier and more effective to start an SL than be Autonomo. In this article, I aim to answer this question and clear any doubts that you may have.

What is an Autonomo?
Autonomo is the Spanish word for freelance or self-employed individual. If you provide some kind of service (irrespective of what this is), you need to register as an Autonomo.

What is an SL?
An SL (Sociedad Limitada) is the equivalent to a Limited Liability company, a private limited company (or ltd) in the UK.

What are the main differences between an Autonomo and an SL?

The 6 main differences are:

1. Set Up
To create an SL, there are several steps which must be taken. Firstly, the initial investment required to set up an SL is a minimum share capital contribution of €3000 (according to the recently approved Law 18/2022, of 28th September, also known as “Ley Crea y Crece” the minimum share capital contribution will be €1, as long as the company complies with the requirements approved). The next steps include registering the company with the Mercantile Registry (Registro Mercantil Central), signing a public deed at a notary office and allowing for additional tax documentation.
On the other hand, becoming Autonomo is much more straightforward. No initial investment is required and the process is significantly faster and easier. You must register with the tax authorities (Agencia Tributaria of Hacienda) and with Social Security (Seguridad Social).

2. Liability
An SL is incorporated as a separate legal entity. It is distinct to the entity of its owner(s) and partners. This means that the shareholder’s liability is limited to the capital invested in the business. The personal finances of the owners/partners would not be affected if the SL was to go under. However, Directors of the company are liable (with all their personal wealth) against the creditors, the shareholders, for their actions taken through the company both legally and financially.

However, Autonomos are responsible for all business debts. There is no legal separation between the company assets and the personal assets. As a result, there is more risk in the form of personal property, savings and possessions.

3. Taxation
An SL, as a legal entity, is subject to corporate tax (Impuesto de Sociedades) at a fixed rate of 25% of profits. A discounted rate of 15% over profits may be available for newly established companies in their first two years of operation (the first year in which the company has profits and the following year).

Any transaction that the company might carry out with related parties must be at the market value e.g. the remunerations paid to the Administrator.

In case the shareholder/s is a person developing a professional activity, the Spanish Tax Authorities require that at least a 75% of the profits of the company must be paid to the professional shareholders. Therefore, in the end only a 25% of the profits of the company benefit from the lower tax rates in the Corporate Income Tax with respect to the Personal Income Tax. If you could not prove that the company has its own personal and material resources, the Tax Authorities could argue that 100% of the profits of the company must be transferred to the professional shareholders.

Autonomos pay IRFP on their net income, after associated business costs. The tax is progressive in the sense that the higher the income, the higher the rate of tax. The tax rate results from adding the Spanish tax rate and the one approved in each region (“Comunidad Autónoma”). For example, in Catalunya the tax rate ranges from 7% (20%) all the way up to 47% (50%), if your annual income reaches more than €300,000. The type of business activity that the Autonomo carries out affects the rate of tax. In the first two years there is a 20% reduction in net income as long as in the year prior to starting the new activity you did not develop.

With regards to IVA (VAT), the rate is the same for both SL and Autonomos.

4. Social Security
For an SL, the costs start at €350 per month (with the new regulations entering into force in January 1st 2023, the amounts to pay for Directors of SL to the Social Security will decrease and this cost will start at 310€ per month). The company director must register with Social Security.

Autonomos are normally eligible for a discounted rate for the first two years (however this depends on the field of work). Furthermore, they may also be eligible for a discount in the third year depending on field of work and age.

The Spanish Government brought in new regulations which will commence January 2023. These regulations will change the Autonomo social security payment structure so that the more the Autonomo earns, the more social security they will pay. For lower earners, they may find that they will pay less than they currently do. However, for higher earners, they may find that they will pay more.

5. Financing
It may be easier for an SL to secure financing and more opportunities may be available. Banks and lenders tend to have more confidence in lending to an SL as opposed to an Autonomo. Due to the way an SL is set up, they are generally seen as more solvent.

6. Accounting
An SL is subject to Plan General Contable (general accounting standards) by the Spanish Government. This is a much more complete accounting process. Documentation must be maintained for all financial operations. Annual Accounts must be submitted in the Mercantile Registry annually. Furthermore, Corporate Tax must be paid annually, and VAT must be paid quarterly or monthly depending on the level of income.

On the other hand, the accounting practice required by Autonomos is simpler and straightforward. They are required to submit all sent and received invoices, with quarterly declarations for IRPF and VAT (if VAT applicable). They are also required to make an annual declaration by the end of June each year.

Costs of becoming Autonomo in Spain

Social Security
A self-employed person that has applied for a reduction in the Social Security Contributions because they started their activity before January 1st, 2023 will pay a flat fee of €68 a month for the first 12 months. They will then be eligible for a 50% reduction over the next 6 months. Following this, they can claim a 30% reduction for the subsequent six months. The self-employed worker will start paying full social security contributions after 2 years has passed.

These contributions to the Spanish Social Security system, from January 1st, 2023, will start at 281,50 Euros, although they will be also able to request a reduction for the first 24 months. They are entitled to an 80% reduction during the first 12 months, a 50% in the following 6 months and 30% during the remaining 6 months. After that, a 100% of the contribution must be paid. There is an additional 30% reduction for a further year for male freelancers under 30 years of age and female freelancers younger than 35 years old.

Autonomos over the age of 65 who can prove that they contributed into the social security system for at least 36 years and six months are exempt from paying the full Social Security contribution indefinitely.

The above costs are the only start-up costs required for anyone who wishes to become autonomo. The only initial start-up cost would be the Social Security payment, as detailed above.

Income Tax (IRPF)
Autonomos must pay tax on their profits. There are certain rules on the deductible expenses for a freelancer. Please see the link to this article here on what expenses you can deduct as an autonomo. The differences in the deductible expenses between an Autonomo and a SL are supposedly none. However, using a company credit card for expenses seems more ‘open minded’ than what an autonomo’s receipts can be made up of. After determining profits, there is a 20% additional reduction on the taxable income for the first 2 years. This taxable income will be subject to the progressive tax rates of the general income in the Personal Income Tax that, as stated, can be higher than 50% in the highest bracket, in certain regions.

Also, on a quarterly basis, the Autonomo must pay 20% of the quarterly profits in advance, taking into account of the final annual tax liability levied on the freelancing. This amount will be deducted from the annual tax liability, once determined.

Costs of starting an SL in Spain

Social Security on a director
The company director of the SL must pay social security contributions and these start at €350 per month. However, the reductions in the Social Security contributions (80%, 50% and 30%) will be applicable if certain requirements are met.

Corporate Income Tax
15% in the first 2 years on the profits, if the company is new and the activity has not been carried out before by the director or by another related company. After that, there will be a Corporate Income Tax rate of 25% of profits


Making the choice

It very much depends on your personal circumstances. In general, if you have 3 directors/employees or more and an annual income of 80k then an SL could be the best option. However, this should be determined on a case-by-case basis and very much depends on your personal situation. It is always recommended to take professional advice to establish if this is the correct decision for your business.

The main factor is how much money you make (or will make) and the size (or size to be) of your business. It is much quicker, easier and cheaper to become Autonomo so if you are starting out and you do not have a clear idea of how much income will be generated, this may be the best option. However and as an example, if you would like to sell shares, take on employees or increase the number of partners then an SL might be the better option. An SL may also portray an image of a larger, more professional and solvent business when compared to the Autonomo set up. As a result, if you plan on working with large, established companies then you may find the SL route the better option.

Finally, you cannot establish an SL and then change to Autonomo. If you want to change to Autonomo when you have established an SL, first you need to liquidate the SL. It is much easier to go from Autonomo to SL. It may make financial sense to do this as you may end up paying a reduced rate of tax. SL’s pay a flat rate of 25% (15% for the first year in which the company has profits and the following year), however if you are a high earning Autonomo then you may find yourself paying up to 47% (50%). The general consensus is that it makes sense switching from Autonomo to SL once you are consistently making profits of more than €80,000 per year, or taking into account all other factors.

If you would like to speak with a Financial Adviser in Spain, Chris Burke is experienced, qualified in personal financial matters. Chris can review your current pensions, investments and other assets, with the potential to make them more effective and tax efficient moving forward. Don’t hesitate to get in touch with Chris via the form below – or click the button below to make a direct virtual appointment here.

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.

Keeping occupied when you’re retired is not always easy

By Jeremy Ferguson - Topics: Retire in Spain, Spain
This article is published on: 21st November 2022


Over the years I’ve been living and working in Spain with retired expats, one of the issues that very often comes to light is finding things to do, and making new friends. For the avid golfers among you, that may not be a problem, but for many others it can be.

We have recently started supporting the Benahavis Arts Society, who not only organise Talks in Benahavis once a month, but interestingly, they are also organising regular trips to places of interest in and around Andalucia, as well as other planned social events.

If you are looking to make new friends, and explore Andalucia, then this may be for you. There are planned trips to The Malaga Christmas Lights on the 9th of December, a Christmas Lunch of the 15th of December, and a pub quiz on the 19th of January next year. Non-members are welcome, and more details can be found on their website at;

Retirement in Spain

As can be seen from the write up below, the most recent trip to Antequera was a huge success:

“With the guidance of Miranda, our excellent tour operator, we started our day driving through stunning scenery including the extensive rich farmlands in the valleys around the city and the imposing Pena de Los Enamorados (Lovers Leap); a distinctive face-shaped mountain from a romantic legend that overlooks the town and dominates the landscape.

On arrival at the top of the city, we started our historical walking tour with a local guide. This included the majestic Alcazaba; the centuries old Moorish fortress and the beautiful Colegiata with its superb façade. We visited the municipal museum with its many artefacts tracing Antequera’s extensive archaeological history and the splendid renaissance style church of Parroquia San Sebastian.

We then had free time to explore the city further and take in a delicious lunch at one of the delightful tapas restaurants around the central square.

The spectacular cultural heritage site of the Dolmens was the destination for our afternoon visit. These bronze age burial grounds built with huge megaliths are nothing short of impressive. Inside, the chambers are magnificent and clearly show the scale of the architectural and engineering feat required to build them.

The whole day was truly delightful with something for everyone. It was very well planned and organised, with highly knowledgeable and personable guides, various pick-up locations and brief stops on the way there and back for refreshments. I would particularly like to thank Miranda, Betty and Tracey for looking after us so well but also the whole group who were so incredibly welcoming.”

Working with clients in the Costa Del Sol and helping with their financial planning and tax matters has meant I get involved in so many other areas of people’s lives, this being just one great example.

If you would like to find out more about how we can help you not only make sure your financial world is in order here, but also integrate into life here in Spain, please feel free to get in touch for a chat.

Transferring your pension to a QROP

By David Hattersley - Topics: Pensions in Spain, QROPS, Spain
This article is published on: 17th October 2022


A sense of deja-vu is now apparent as the UK is experiencing a similar situation compared to the 70’s. Drawing comparisons especially for those that lived through that era would be unhelpful. However a minor point worth considering were the restrictions on the flow of capital out of the UK. For those lucky enough to travel abroad then a limit of £25.00 cash per person was the restricted limit under the Exchange Control Act 1947. My wife still has her old passport with form PP/A dated 14.02.73. One of her clients of 100 years still remembers how difficult it was to bring money into Spain to buy a plot of land.

For those that already are living in Europe or plan to in the very near future under the golden visa rules, I am not suggesting a wholesale restriction of capital movement . A difference though between the 70’s and now is the growth in personal wealth, with the primary asset being property. The 2nd biggest asset and perhaps underrated was the growth of money purchase pensions after Mrs Thatcher came to power and for those in their 50’s & 60’s this could be quite considerable. The opportunity to “ distance work “ may have an impact on younger professionals and for those relocating here.

The current government is under extreme pressure, especially the need to raise tax revenue to balance the books, along with the alleged reports of threats to tear up all agreements with Europe.One politically “safe option” and unlikely to cause uproar and outrage by the general public would be to curtail or even stop transfers to a QROP for those lucky to live or move to Europe.


Why would the government do this ? The payment of a pension held in the UK could be taxed at source as are the current Civil Service Pensions, thereby retaining the long-term tax revenue stream. It would mean filing tax returns both in the UK & Spain. The pension commencement lump sum could also come under review. There certainly wouldn’t be a public outcry for those “ lucky” enough to have sizeable pension pots.

The UK Budget Bill normally has to be debated and passed into law which takes about 3 months. In 2015 negative amendments were made to the QROPs rules that took effect immediately on the day after the budget and was quietly “slipped in”. A case of “ the devils always in the detail”! After all the principle of if one can get away with it once, why not try to repeat a similar process again?

There are many advantages in transferring to a QROPs and at The Spectrum IFA Group we offer and recommend a thorough assessment and report of your individual situation by our qualified specialist at no cost to you. An additional benefit is the long-term service provided as UK based advisers can no longer provide this for residents in Spain and the individual can retain control via a local adviser. A transfer to a QROP doesn’t only apply to UK nationals but any European worker that has built up a “pension pot”. I have been heavily involved in the pensions market since 1987 and have a wealth of experience in this field so if you have any concerns or interest please contact me to arrange a no-obligation initial meeting.

e.mail :

Telephone or Whats App : 0034 711 051 938

Moving to Spain and Wealth Tax

By Charles Hutchinson - Topics: Spain, Wealth Tax
This article is published on: 6th October 2022


I was flying back home from London at the weekend and I was sitting beside a fellow Brit who seemed very pleasant. We got chatting and it turned out he is a keen golfer, lover of warm climes and owns a holiday home in Southern Spain. His wife is a keen gardener. We exchanged pleasantries and he felt frustrated he could not move himself and his wife permanently to Spain. I asked why not? He replied the tax situation in Spain is horrendous from every angle and they have something called Wealth Tax which is unheard of in many countries, including the UK. As a wealthy man, this put it out of the question. He said he had missed the boat regarding a Residencia (TIE) and found queuing for miles at Malaga airport with all the other Brits on returning to the UK from Spain was really unacceptable.

We had over an hour more together on the flight and he was my captive audience. So I proceeded to give him the lowdown on the whole tax situation:

1. Wealth Tax (suspended). From last week, there is no more Wealth Tax for residents and non residents of Andalucia where my companion’s house is located. What or where is Andalucia? Andalucia is a semi autonomous region (one of 17 in Spain) which stretches from the Portuguese border in the West to beyond Almeria in the East and up to Cordoba in the North and is bordered to the South by the beautiful Mediterranean Sea. Its capital is the stunning Seville. Wealth Tax was calculated on the total value of your assets on a varying sliding scale according to the amount. At the upper level it was 2.76% on €10.696m and above. Previously as a resident, you had to pay wealth tax on ALL your worldwide assets. As a non resident, it was only on your Spanish assets.
As a result of the suspension, it is expected that many previously resident expatriates will return from those countries with attractive tax regimes to Andalucia as residents and many first time residents will apply to become permanent residents.

Additionally, the case (tax wise) for coming to live here, these other taxes are just SO friendly:

2. Spanish Succession Tax (IHT) (suspended). This was effectively abolished on 1st January 2018 by granting a 100% allowance on the first €1m and thereafter 99% allowance. Assets sheltered in foreign entities (banks, insurance companies, etc.) which are being inherited by foreign residents (e.g. children living outside of Spain) are also exempt from this IHT.

3. Capital Gains Tax (adjusted). Payable at the same rates by everyone except on the sale of your main residence in Andalucia where it is exempt if you are over age 65.

4. Income Tax (decrease). A decrease by at least 4% p.a. has been announced. On investment income derived from approved EU based Spanish Compliant Investment Bonds, this attracts very low income (savings) tax. We are talking about a drop from a standard income tax upper level rate of around 46% down to a level of between 9% and 11% average over a 20 year period, depending on the amount of income taken.

5. Water consumption tax (suspended). This is planned to be abolished from 2023. So my companion with the big garden and pool was pleased.

6. Residencias. If you hold a TIE (Tarjeta Individual Extranjero), you can stay in Spain up to 6 months, if you are a non taxpayer in Spain. As a taxpayer in Spain, you can stay for an unlimited period. One of the benefits is that in both cases you can join the queue for Nationals and EU citizens with your British passport and TIE – no more queuing! You can also roam the EU Schengen area at will and stay as long as you like (the latter if your TIE is a “Permanente”) within the residency rules of those countries.

Although the application window for TIEs for Brits has closed, you can still apply for a Golden Visa (investor’s visa), come and go as you please but become a tax resident of Spain if you stay more than 183 days. Or you can apply for a non lucrative Visa which allows you to stay as long as you want but you cannot be employed and you have to become a tax resident.

7. Tax residency. What exactly does it mean? Simply put, if you spend more than 183 days in 12 months in Spain, then you must file for tax residency. If your “centre of vital interests” is in Spain (wife or partner here, children in school here, etc.), then you would be judged to be fiscally resident.

At the end of my lengthy discourse, he asked what exactly would this mean for him? So on the back of an inflight magazine, I jotted down some information from him and gave him an approximate potential tax position and the savings he would now have, in addition to some existing ones of which he was not aware.

Moving to Spain and Wealth Tax

His total assets in the UK and Spain, including homes, bank accounts, premium bonds, managed investment portfolio and a classic car totalled some €5,526,000. On this as a Spanish resident he would previously have to pay some €98,000 in Wealth Tax. Now it would be zero.

On his pension and investment income of some €166,000, they would pay some €61,000 Spanish Income Tax. But by moving his investment portfolio into a tax efficient Spanish Compliant Bond (based outside of Spain), they could increase the investment part of their income to around a yield of approximately 5% p.a. while lowering their tax bill by some €10,000 p.a. (from €13,900 on their investment income to €3,900).

Of course, he would have to pay Capital Gains Tax on the move from his UK portfolio to the Spanish bond. This would probably be minimal while the markets are currently down. In any event their investment manager had “bed and breakfasted” * their portfolio two years earlier, thus further reducing the potential gain.

And there would be no Inheritance Tax payable by their three children, even if they decided to move to Spain also.

The best part to him seemed to be that his wife could water their garden for as long as she liked!

There was a noticeable spring in his step when my companion left the aircraft in Malaga. I had one too as I felt I had probably gained a new client.


* Bed and Breakfast. This is where you take advantage of the annual UK CGT allowance by selling some or all of your holdings and then buying them back, both just before the end of the tax year. This prevents a large Capital Gain build up over the long term.

Somewhere in this article there must be such good news that you want to know more. Why don’t we discuss it over a coffee? And of course, I don’t mind what they say about Italian coffee, I think the coffee in Spain is the best there is anywhere in the world! It’s the way they make it and serve it. Rather like how we look after our clients.

How to build income from your investments

By Barry Davys - Topics: Barcelona, Catalonia, Catalunya, Investment objectives, Spain
This article is published on: 5th October 2022


How do you pay for your Mistress?

An old Chinese proverb advises “Only pay for your mistress from your income, never from your capital” It is not known if it was a wise woman or a wise man who came up with the proverb but it was a person who certainly knew about money.

I admit as a young man, before I heard of the proverb, I got this wrong. I bought a second hand Porsche 911 SC. It was fun, fast and purred fantastically. I had the money to buy the car, especially with the part exchange of my old car.

As a young RAF officer what I did not have was the income to service it. Simple repairs such as when the indicator glass broke stretched my income and I really struggled with the cost of the insurance.

The indicator glass, for example, went in a semi circle around the wing. It cost me £68 for a new glass because of that bend in the glass. I still remember the price some 41 years later as back then £68 was much more significant than it is today.

How do you pay for your Mistress?

For those of us living here in Catalonia our mistress tends to come in the form of, for example,

  • A boat with mooring costs, winter storage etc
  • A car for touring on the continent. Often falls into the category of a big name brand of car or a vintage car with associated costs
  • The temptation to eat and drink out every night, every other other night etc
  • Swimming pool with maintenance
  • A bigger house with associated costs including security systems, insurance, watering of the garden etc

In nearly all cases when you hear couples talking about the purchase, you will hear the question “Can we afford it?”. The thought process to answer that question is do we have enough money in the bank to buy it. If the answer is yes, the item is bought. It is much less usual to hear “can we meet the ongoing costs?”.

Interestingly, even when we have accumulated significant wealth this proverb still stays true. With more capital we buy bigger things; house, super yacht, more expensive cars etc. and end up with bigger expenses.

How to build income from your investments

We need to ensure that we have sufficient net income to meet the running costs of the purchase. If we do we can

  • Enjoy our purchase without worry
  • Not damage our financial position by having to spend capital to pay for running costs
  • Still have capital left for our surviving spouse and/or our family
  • Not suffer from buyer’s regret

How do we get sufficient income to pay for our mistress? We use our existing wealth to build up an income that pays out regularly. Preferably in a tax efficient manner where possible.

Nowadays investing in the latest tech company or perhaps even a crypto currency is deemed to be the way to make money by some people. It may build your capital. However, neither generates much income and in some cases, no income.

If you would like to discuss how to build income from your investments so you can enjoy your purchases without worrying about the ongoing costs please feel welcome to get in touch, in the first instance, by email at

I cannot guarantee to help you meet all your running costs but as I am passionate about financial planning I anticipate I can improve your situation.

No more wealth tax in Andalucia

By Charles Hutchinson - Topics: Spain, Wealth Tax
This article is published on: 21st September 2022



Yes, you heard us right, Wealth Tax in Andalucia has been abolished.

The Government in Andalucía is in the process of approving today a 100% allowance for the Wealth Tax liability, as announced by Juanma Moreno, the President of the Junta yesterday, which means in practice the elimination of this tax in the region.

The measure will be effective from Wednesday 21st September 2022 , applicable to Residents in Andalucía and Non-Residents who are liable to Wealth Tax for assets located in this region.

Ten of the top 20 wealth tax payers in 2019 left Andalucia in 2020, resulting in a loss of income for the region of nearly 18 million Euros (3.5 m in wealth tax and 14m in personal income tax). Moreno said he wants people who spend long periods here to make it their permanent home and pay tax here. He estimates it will attract 7,000 new residents which will more than make up the loss of previous revenues.

The Conservative Party, following the tax policy of Madrid where the Wealth Tax was eliminated years ago, has put Andalucía on top of the list of the most attractive locations to live or invest in Spain in terms of taxes, along with other previous decisions taken to practically eliminate the inheritance and gift tax for close relatives, or the reduced transfer tax flat rate of 7% approved in 2021. He also announced a reduction in Income Tax by at least 4%.

Moreno also announced that water consumption tax in the autonomous region will be suspended in 2023.

This measure will boost the Region by removing one of the main barriers for foreigners moving to Spain permanently, or just to buy luxury properties in their personal name, but also attracting those living in other less favourable regions in Spain.

A very welcome and largely demanded decision. If you are planning to move to Andalucia or have delayed doing so until now, please contact me to discuss this important step taken by the regional government and how it could change your and your family’s life style for the better into the future.

Top Tips for expat finances in Spain

By Chris Burke - Topics: Pensions in Spain, Retire in Spain, Spain
This article is published on: 21st September 2022


I hope you are well and had an enjoyable summer. This month we cover the following topics (if there is anything you would like to understand more or wish to see covered in these Newsletters, don’t hesitate to ask):

  • Early Retirement State Pensions in Spain
  • New Cryptocurrency reporting regulations in Spain
  • Free Train Tickets in Spain

Early Retirement Pensions in Spain
Did you know that in Spain, under certain circumstances, you can take early retirement before the legal retirement age? But what are these circumstances and what requirements must you meet?

retire early in spain

What are you entitled to and how can you apply for it?

This can be quite complicated depending on your situation, and we would recommend taking professional advice so that you can be sure of exactly what you are entitled to.

New Cryptocurrency Regulations in Spain

New Cryptocurrency Regulations in Spain
From 2023 onwards, Spanish residents will have to declare cryptocurrency holdings in their tax returns. Currently, cryptocurrency holders are only obliged to declare any profits or losses in their income tax returns. The 2022 tax return has a special section for these assets. However, from 1st January 2023, a new regulation will be implemented meaning that all Cryptocurrency transactions must be declared. This has been regulated by Spain’s new anti-fraud law, which is currently at the public hearing stage. It has been set out in a draft bill incorporating several anti-fraud amendments.

The new tax declaration will have to be submitted using the form Modelo 721. Information will have to be included on those who have held cryptocurrency or have been authorised beneficiaries of cryptocurrency at some point during the year (from 2023 onwards). Furthermore, cryptocurrency holders will have to include information on what their final balances are at the end of the year, as well as information on the types of cryptocurrency and the amount of units that they hold, along with the equivalent amount in Euros. This new regulation further reinforces the need to seek professional tax advice if you are a cryptocurrency holder or thinking of becoming one.

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. You can book an initial consultation via my calendar link below or email/send me a message.

At Last, Wealth Tax is abolished in Andalucia

By Jeremy Ferguson - Topics: Marbella, Spain, Wealth Tax
This article is published on: 21st September 2022


Monday the 19th of September 2022 will be in the history books forever. Having watched the coverage of the Queens funeral on TV, it made me think there is no other country on earth who could have put on such an impressive show for the world to see. It made me feel very proud to be British.

Moving overseas is an exciting and daunting thing to do but if you, like me, have lived overseas for many years, that homesick feeling does hit home sometimes, and the Queens funeral was certainly one such example.

It has been a tough year in many ways. Everything it seems is changing. The reopening from the pandemic has changed the way many people work. Russia’s Invasion of the Ukraine changed the idea of a peaceful Europe. The cost of living has increased due to rising inflation, and now rising interest rates are back with us. All of this has happened after years of peace, cheap energy, low interest rates and non-existent inflation. It seems the longer we live with something, the more powerful it’s passing, something that no doubt made the Queens funeral very emotional for many people.

We now have a King, and the world in which we live is without doubt going to continue to change. Any of you filling up your car will have noticed the cost has come down from the previous highs in the summer, and the general consensus is that inflation will start to slowly come down between now and the end of the year. It isn’t however expected to hit the floor, but rather fall to a much more acceptable level.

When you are retired and keeping a close eye on your savings, investments and pensions, inflation and interest rates are two critical factors to take into account when trying to work out the future. If you have a fixed pension income, it is commonplace to then substitute this with ‘income’ from investments, the spending power of which is affected by inflation. If the investment returns are all over the place, and inflation is doing the same, it’s really important to monitor things closely and on a regular basis. As an example, if things carry on as they are, we may see a return of interest on bank deposits, which has been a factor not taken into account for a long time when making plans for your money.

Tax is something I’ve not really mentioned before, but this of course has an effect on your disposable income. Pension and Investment income can be very tax efficient here if the right planning is taken, but something that has always been a difficult one to deal with is the annual Wealth Tax.

In the past many Wealthy individuals have decided against moving to Andalucia because of the punitive Wealth tax, which in real terms doesn’t actually generate that much revenue each year (estimated at €95m per annum for the Region). It is felt that by attracting more Wealthy Individuals, the increased expenditure and resultant revenues will far exceed that amount, so it does seem to make perfect sense.

Financial planning in retirement isn’t rocket science, but with so many variables effecting how things may look financially going forward, it’s never been more important to make sure your previous plans aren’t sitting gathering dust. Maybe they are not being best suited for the new environment we find ourselves in.
The news has been very negative so far this year, and although the passing of the Queen was a very sad event, it marks a line in history and just goes to show nothing lasts forever. It will be interesting to see how the new King makes his mark in history.

If you would like to find out more about how we help our clients here in Spain, please feel free to get in touch.