Confused!

Old Nov 10th 2021, 8:03 pm
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Default Confused!

Hi all we are new here and looking to move to Spain in 3 years time.
here’s the deal- we are looking to sell our home in the uk where we will then have 200k
looking to buy a property for 100k and use the remaining 100k to live on. There’s 2 of us and we have costed this will last us 10 years.
within that time we will come into an amount of inheritance which we will use to buy a property back in the uk to rent out the income from this would be our income to live on.

however, we have just read that to apply for a lucrative visa we would need to prove we have more than this to live on.
Is that correct? Is there something we are missing or haven’t considered here?

we are now thinking our well thought out plan probably can’t happen.

any advice and guidance much appreciated
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Old Nov 10th 2021, 8:20 pm
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There is no double taxation agreement with respect to inheritance. If you inherited from UK you could face tax in both Spain and UK. This might effect the size of the pot.
Plus you intend to live on 10,000 a year between two of you...for 10 years! That's just over 700 a month. Life must be pretty bad if those numbers tick your boxes.

Last edited by Chipmonk; Nov 10th 2021 at 8:29 pm.
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Old Nov 10th 2021, 8:24 pm
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Hi we would keep those funds in our uk bank account and transfer over a small amount on a monthly basis. Would that work?
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Old Nov 10th 2021, 8:29 pm
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Roughly speaking, for non-lucrative visa (NLV), you need an annual income of around 32,270 euro or £27,581 for a couple. It can be regular income such as rents from properties, pensions, investment or pro-rata lump sum. For the first NLV valid 12 months, you need 32,270 euro, and for Year 2 and 3 renewal you need 2 x 32,270 euro and the same again for Year 4 and 5 renewal. After 5 years you get permanent residency.
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Old Nov 10th 2021, 8:32 pm
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Not legally. If you are resident you would need to declare in Spain.

£100 does not seem sufficient for two to live on. £10K per year might be enough to scrape by on today? Have you costed private medical insurance. Have you considered inflation? What will £10K buy you in 13 years time? ....... How much do you currently live on?

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Old Nov 10th 2021, 9:15 pm
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Default Re: Confused!

Originally Posted by Chipmonk View Post
There is no double taxation agreement with respect to inheritance. If you inherited from UK you could face tax in both Spain and UK. This might effect the size of the pot.
Plus you intend to live on 10,000 a year between two of you...for 10 years! That's just over 700 a month. Life must be pretty bad if those numbers tick your boxes.
Hola

10,000 a year is just over 800 a month not 700 a month

When I came to Spain in 2003, I had about 100,000 to last me for 9 years until I received my old age pension - However, my first pension began three years earlier at 62, and my second pension began at 63 years old.
I was able to take 25% lump sum from my other pensions and still had enough to live here "comfortably" as in there is some money left over at the end of the month.

The years from 2003 have been very kind to me as I did my calculations allowing for interest on my money saved but with inflation eating it away at a greater rate than the interest added to it. In the event, inflation has been significantly less than expected so I am theoretically better off.

I also had a buffer back up of a few stocks and shares which I sold off one year after my full retirement.

I live in one of the cheaper areas of Spain

From living the above, I think your budget is too tight.

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Old Nov 10th 2021, 9:22 pm
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Default Re: Confused!

Hi thanks for all the replies so far.
As we wouldn’t have a massive mortgage or rent outlay the outgoings would purely be for insurance, water, gas elec, broadband and so on.
we think we could easily do this on 12k a year for just the 2 of us.
we have been watching many YouTube accounts for a while regarding expenses and outgoings suggesting between 7-900 per month including food and eating out once a week.
do you guys not think this is achievable?
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Old Nov 10th 2021, 9:23 pm
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Originally Posted by Dxf View Post
Hola

10,000 a year is just over 800 a month not 700 a month

When I came to Spain in 2003, I had about 100,000 to last me for 9 years until I received my old age pension - However, my first pension began three years earlier at 62, and my second pension began at 63 years old.
I was able to take 25% lump sum from my other pensions and still had enough to live here "comfortably" as in there is some money left over at the end of the month.

The years from 2003 have been very kind to me as I did my calculations allowing for interest on my money saved but with inflation eating it away at a greater rate than the interest added to it. In the event, inflation has been significantly less than expected so I am theoretically better off.

I also had a buffer back up of a few stocks and shares which I sold off one year after my full retirement.

I live in one of the cheaper areas of Spain

From living the above, I think your budget is too tight.

Davexf
Thankyou for this. My husband would also be able to draw his pension in around 8 years time. So although we know we have 100k possibly more to last us 10 years really it only needs to be 8.
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Old Nov 10th 2021, 10:09 pm
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Default Re: Confused!

Originally Posted by Itstherestofthem View Post
Hi thanks for all the replies so far.
As we wouldn’t have a massive mortgage or rent outlay the outgoings would purely be for insurance, water, gas elec, broadband and so on.
we think we could easily do this on 12k a year for just the 2 of us.
we have been watching many YouTube accounts for a while regarding expenses and outgoings suggesting between 7-900 per month including food and eating out once a week.
do you guys not think this is achievable?
With two of you, it will be cutting it close with €10,000 and because you have to show the €32,000 as some form of income there may be tax to pay on this somewhere.

€10,000 is €833 a month.

Just for fun I will share our outgoings, as there are two of us living off my private pension and savings, as you will be.

Healthcare for two €1680 a year (paid yearly which I think you need for the visa, did last year when we became resident) Maybe paid monthly after but not sure, we pay in one go for a 10% discount. We were 57/58 when we took out the policy, with no issues, except for a couple of minor ones my wife has which cost an extra €100 or so for the first year.
Car insurance €250 a year fully comp on a 2007 Citroen C4 (I have a classic Moke as well, but thats by the by)
Contents and Buildings insurance €420 a year for a 3 bed 2nd floor flat (we have a rebuild insurance with the community fees) so this is contents and my classic downstairs and all risks on household stuff
IBI (council tax) €410 a year.
Rubbish collection €110 a year
Electric average €55 a month
Mobile phone (total for 2) €24 a month
Water €130 last year
Food and drink and going out €400 a month (varies depending how often we go out)
Internet €30 a month.
Odds n sods €75 a month (stuff from the chinese bazar, leroy merlin etc)
Running costs for car €60 a month
Community fees €432 a year
Gives us €11,132 basic or €927 a month.. Cutting it fine,,,

Now I know we spent more than that last year, in fact we went through about €15,000 because we had some work done, the car broke down (the classic needed 4 new tyres to pass the ITV) and we don't have a pool, garden or any of the outside stuff. But I decorated, planted up the balcony and I spend on art materials and rubbish on Amazon (like any bloke)

Depending on the area you want to move to €100,000 is not going to get you much in the way of a house (I will wait for the replies about villa's for 20c)

Also inheritance depending on the area you live will be taxed, here in the Alicante area (maybe the whole of Valencia Region) you get €100,000 before tax is due.
And you would then be taxed on the income your rental would be generating in the Uk, as well as any income from your pension (the allowance is not as good as the Uk)
So you will need (or not I don't know how confident you are with Spanish form filling) the services of a tax advisor on top as well.

Do you want a pool at your house? Factor in that as well, if it has one there are costs.
Oh. around here we also have 10% purchase tax on property (so the €100,000 house actually costs you €110,00)
Will you want to drive? Need the money for a car, but if you hold a Uk drivers licence you will need to take a test (more expense). (and someone will be along to tell you in a minute that the Uk are 'talking' to Spain about reintroducing the swap)

Last point and Im sorry if some of this is negative, but a good one to think about
Don't move here in the same financial year you sell the house (Spain will tax you on that as well).
Also 25% from the pensions is also taxable here so do the same thing (i moved my 25% out on 31st Dec 2019 and we moved here in August 2020)

All in all, what do you spend in the Uk if you remove the mortgage?
You should use this as your yardstick. We did, when we planned our move I wanted like for like or better (ok didn't have a mountain view in the UK but the sea was within stone throwing distance)
If you are going to move to a strange country then it should be for a better and easier life

Just my 2c (your milage may vary)


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Old Nov 11th 2021, 5:41 am
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Trying to calculate how much you need to live in Spain might be possible if you were intending to move now but the OP is not thinking about doing it until 3 years then intending to hang on for another ten. One thing is for sure - you have to probably cost in inflation so it will be alot more than now.
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Old Nov 11th 2021, 7:10 am
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Don't forget the pound:euro exchange rate can vary greatly - this can be good news but also bad!

I suggest you save hard in the meantime and keep reviewing your plans as many things will change.
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Old Nov 11th 2021, 7:32 am
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Default Re: Confused!

Originally Posted by Itstherestofthem View Post
Hi thanks for all the replies so far.
As we wouldn’t have a massive mortgage or rent outlay the outgoings would purely be for insurance, water, gas elec, broadband and so on.
we think we could easily do this on 12k a year for just the 2 of us.
we have been watching many YouTube accounts for a while regarding expenses and outgoings suggesting between 7-900 per month including food and eating out once a week.
do you guys not think this is achievable?
Apart from the visa requirements I wouldn't rely on YouTube videos. Spain is not Thailand and things cost money. When you buy your own home all other costs need to be considered too and what happens when the heat pump or boiler breaks down? Suddenly you might need to go to the dentist and there are always added costs.
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Old Nov 11th 2021, 8:46 am
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As others have said when(not if) the pound goes belly up after Johnson triggers Article 16 to deflect from his sleaze problems and/or there is another financial crash then relying on a lump sum is always tricky and dangerous
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Old Nov 11th 2021, 10:02 am
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Yes, watching BOJO carefully.... Unfortunatly the UK is currently being led by a COMPLETE BUFFOON!
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Old Nov 11th 2021, 2:48 pm
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Default Re: Confused!

Originally Posted by Chipmonk View Post
There is no double taxation agreement with respect to inheritance. If you inherited from UK you could face tax in both Spain and UK. This might effect the size of the pot.
Plus you intend to live on 10,000 a year between two of you...for 10 years! That's just over 700 a month. Life must be pretty bad if those numbers tick your boxes.
Do you know if there is a double taxation agreement for Capital Gains Tax on the sale of a UK house. I thought I'd seen on this forum someone saying that you didn't pay the tax twice, but from what I see on the UK govt. site there is no such agreement. It seems a bit harsh having to pay that tax in two countries.
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