Financial Advice for Expats in Spain

The Spanish taxation system is very different from that in the UK, not least because many taxes vary significantly between the autonomous communities. Our local Spanish advisers are always available to guide you through and outline the liabilities you may need to budget for. 

For example, if you become a Spanish tax resident and live in the country as your primary place of residence, you should factor the following into your plans: 

• Income Tax: Progressive rates begin from 19% and extend up to 47% in some regions
• Savings Income Tax: 19–30% on dividends, interest and capital gains
• Wealth Tax: 0.2–3.5% on worldwide assets above the relevant allowances
• Property Taxes: VAT or transfer tax on purchases, plus annual municipal taxes on owned homes

Non-residents also need to ensure they manage their tax exposure correctly, and our expat experts are on hand to ensure you meet your Spanish tax obligations. Our financial services cover the entirety of tax planning and declarations, avoiding any potential for unexpected liabilities.

Yes, residents with taxable incomes or assets held outside of Spain will normally need to file an annual return, called the Modelo 720. Our team of advisers ensures our clients remain fully compliant with this self-reporting foreign asset declaration process.  

1. Annual Declaration: Reporting all overseas accounts or assets over €5,000 
2. Tax Filing Management: Reviewing and submitting returns to avoid inaccuracies 
3. Penalty Protection: Safeguarding against penalties for late or incorrect filings 

Our tailored, personalised guidance provides expat residents with comprehensive assistance and ensures the Modelo 720 reporting process is straightforward and stress-free.

There are several potential ways to manage pension transfers, and your decision-making should always be made with support from the expat experts, preventing expensive errors or inefficient transfer processes.

• Pension Transfer Guidance: Reviewing ROPS, SIPPs and other alternatives 
• Tax Impact Analysis: Analysing the costs of Overseas Transfer Tax and ongoing taxation against lump sum and regular pension incomes 
• Compliance Support: Ensuring pension transfers are compliant, timely and suitable for your circumstances 

Pension transfer planning is complex and client-specific, and our role is to help you select the optimal solutions that will maximise your retirement income and minimise tax exposure.

Spanish residents and non-residents with assets in the country must ensure they understand the impacts of inheritance taxation, forced heirship rules and allowances that limit tax liabilities for familial beneficiaries, with some of the key regulations to be aware of as follows:

• Forced Heirship: Spain’s regulations dictate a fixed proportion of an estate that must be left to a spouse or children, although there are options to elect to apply UK laws if preferred. 
• Inheritance Tax: General taxation rates extend from 7.65% up to 34% and vary considerably depending on the relationship between the heir and the deceased.
• Regional Variations: The autonomous communities can set their own thresholds and allowances, which can have a sizable impact on future inheritance tax burdens.

Chase Buchanan offers tailored estate-planning solutions and can assist with creating legally enforceable Spanish wills, asset holding structures and trusts to ensure your estate is managed and distributed according to your wishes.

The relevant visa or permit will depend on your circumstances, from visas that are most appropriate for professionals, entrepreneurs and investors and those more suited to retirees, for example. 

Our financial services team can provide more personalised guidance around some of the most popular visa routes, including:  

• Non-Lucrative Visa: A visa programme for applicants with a passive source of income
• Work Visa: Employer-sponsored permits for professionals and business owners
• Digital Nomad Visas: Time-limited visas for professionals wishing to live and work in Spain

Selecting the right visa route is essential, and our expat advisers offer seamless guidance to help you through every step of your residency application.

Like most aspects of Spanish taxation, the cost of purchasing a home, business premise or rental property can differ between regions, making accurate budgeting essential for all expats. We can advise on the correct tax obligations for planned purchases or existing real estate ownership, such as:

• New Builds: 10% VAT plus a regional stamp duty levy
• Resale Properties: Transfer tax of 6–13% depending on the region
• Annual IBI Tax: An annual localised tax based on registered valuations
• Wealth Tax and Non-Resident Income Tax: For property owners who sell or let 

Whether you intend to buy a permanent home, extend your investment portfolio or already own a permanent residence, we will ensure you know which taxes apply, how to budget accurately, and the opportunities available to optimise your real estate investments.

Foreign national non-residents can purchase properties in Spain, and our expat experts will help you weigh the pros and cons, and the costs linked with Spanish property ownership:

• Income Tax: A flat-rate tax of 24% on Spanish-source income, such as rental earnings
• Wealth Tax: Calculated against Spanish-based assets only over the €700,000 threshold
• Property Taxation: Non-residents must submit annual asset declarations, even if they do not earn any rental income, with tax levied against the cadastral or registered value of the home.

We’ll advise on the best approaches for you, whether you are considering the pros and cons of becoming a Spanish tax resident or want to assess your net returns from a rental investment as a non-resident.

• Spanish Taxation: Exposure to taxation on interest income and returns earned from UK ISAs and Premium Bond gains
• Loss of Tax Reliefs: The changes to your ability to contribute to products like an ISA as an overseas expat
• Restructuring Advice: Guidance on the options, from selling, transferring, restructuring or retaining your UK savings products

• UK Relief: Taking advantage of tax reliefs against the gains made on the sale of a primary residence, which only apply while you remain a UK tax resident
• Tax Residency Status: Preventing issues or confusion around your position as a Spanish tax resident or non-resident based on where you live and own a home
• Spanish Capital Gains Tax: Advising on the potential costs of Spanish taxation if you sell a UK property after becoming a Spanish tax resident

• Your Use of UK Exemptions: Recognising gains or income to make full use of any remaining annual allowances in the UK before your relocation
• Cross-Border Planning: Contrasting the tax rates payable on passive income sources and the differences between the UK and Spanish tax rules
• Double-Taxation: Ensuring income is declared correctly and following rules around double taxation

Wealth tax in Spain can become complex due to varied regional allowances, and also because in areas with 100% reliefs, an alternative Solidarity Tax on Great Fortunes applies.

Andalucia is one of the municipal governments that suspended regional wealth taxation with a 100% wealth tax relief, but this does not mean that wealth tax has ceased to exist altogether.

• Solidarity Tax: Applies to affluent taxpayers with a wealth of €3 million or more, payable by residents and non-residents in regions with a full wealth tax exemption.
• Tax Rates: In areas without wealth taxation, this alternative system levies a charge of between 1.7% to 3.5% based on the total assets owned.
• National Allowances: Elsewhere, wealth tax allowances include €300,000 per owner against primary residential homes, or a standard €700,000 per taxpayer in regions without a set allowance.

Further information about wealth taxation and solidarity taxes is available on demand by contacting the experienced local advisers within the Chase Buchanan Spanish team.