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Top financial tips – Spain July 2024

By Chris Burke
This article is published on: 11th July 2024

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’.

Inheritance tax (IHT) & Gift tax in Spain

Inheritance tax (IHT) & Gift tax in Spain
One of the great unknowns amongst those who are non-Spanish and tax resident in Spain is how inheritance tax works and what amounts are payable. Particularly if you come from the UK, it’s important to note that Spain does not, (generally), take into consideration the rules of other countries regarding IHT. Inheritance tax in Spain has no ‘double tax treaty’ with the UK, meaning Spain will not take into account any tax paid on this OR rules applicable in that country (for example, if there is no tax to pay in the UK there could be significant tax to pay in Spain).

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
UK pensions in Spain

80+ state pension for UK persons those living abroad
If you do not receive the UK basic State Pension or you get less than £101.55 a week, you could get the difference paid up to this amount, as long as you were 80 years old before the 6th April 2016.

Other qualifying criteria are:

  • you were resident in the UK for at least 10 years out of 20 (this doesn’t have to be 10 years in a row) – this 20-year period must include the day before you turned 80 or any day after.
  • you were ‘normally resident’ in the UK, the Isle of Man or Gibraltar on your 80th birthday, or the date you made the claim for this pension if later.

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.

Article by Chris Burke

If you are based in the Barcelona/Costa Brava area and would like to have an initial, complimentary face to face video call or arrange a time to visit Chris in his office in central Barcelona, contact Chris on or whatsapp +34 689915730.

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