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Saving tax in Spain

By Pauline Bowden - Topics: Investments, Spain, Tax Efficient Savings
This article is published on: 19th April 2022

Thank goodness for the Spanish compliant investment bond!

It is a very efficient way that we can legitimately avoid taxation in Spain, as long as we purchase the correct financial products.

In the UK most people are well aware of the tax-saving nature of pension plans and ISA’s. The Spanish compliant investment bond is a tax-efficient investment solution that can be used to invest in a wide range of fully licensed and regulated investment funds while also reducing or negating your Capital Gains Tax liability.

Spain has a reputation for being a relatively ‘high-tax’ country. As a result, many UK Expats manage their affairs in such a way as to ensure the continuation of UK tax residence. The situation is becoming a greater challenge for those that find themselves spending more time in Spain each year. The Spanish tax authorities now require individuals to show concrete proof of time spent outside the country. Brexit has exacerbated the issue further; anyone who finds themselves in an ambiguous position should take professional advice to clarify their status.

Those that have chosen to take up permanent residency in Spain may find that their UK investment platforms, though tax efficient in the UK, are not so in Spain. Meeting a fully licensed Financial Adviser here in Spain could help review your current investment holdings and advise on their suitability for tax efficiency in Spain.

Based on our expectation that most people are looking for a positive return from investment markets over the medium to long term, our recommendation is that the investment product is held for a period of 5 to10 years. Whilst the appropriate holding period for each individual client will be determined by their personal investment objectives the term should be sufficient to recover from short term volatility in investment markets.

Article by Pauline Bowden

If you are based in the Costa del Sol area you can contact Pauline at: pauline.bowden@spectrum-ifa.com for more information. If you are based in another area within Europe, please complete the form below and we will put a local adviser in touch with you.

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