Kerwin6265

Hi apologies if this has been covered I can't find anything, I hear talk of people transferring money each month as required to Spanish accounts, presumably from a UK bank registered at a relatives address if living in Spain, is this because savings in Spanish are taxed ? I'm trying to gather as much info as possible to prepare for retirement to Spain and don't want to have savings at risk.

Barriej

Savings and anything in cash accounts is free of tax.
The interest however is not.
I like many others make monthly transfers as my private pension can only be paid to a Uk bank.

You can and most of us do still have Uk bank accounts in our own names and with Spanish address's. Only some high street banks have closed accounts to certain countries.

Any money you 'earn' has to be declared for tax purposes, you have to arrange for this as its not automatic (get a gestor or a solicitor with a good Spanish accountant) .

So thats pension, rent from a Uk property, wages if you work (if you retire with an NLV you cant work), interest on savings accounts, winnings from premium bonds and anything else that 'pays' you.

If you have a pension to take the 25% tax free ensure you take this in the year before you move as this is also taxable here (tax years run Jan 1st - Dec 31st in Spain).
You may also face CGT from any property sale if not using the proceeds to fund your Spanish property.

Kerwin6265

Barriej many thanks for quick reply, very helpful. The CGT part of the reply it is this from the sale in the UK before I move to Spain?

Barriej

Yep to ensure you dont get caught out you either have to sell in the year before you move or ensure that you spend less than 183 days in Spain in the first year...
So sell the house in Jan wait 183 days and then move.. Should then not have to pay... Dont quote me on this as we didn't have property to get rid of (I did this a couple of years before as we were due to move in 2018 but didn't actually move until 2020)

I dont think CGT is due if you use the money to buy a property here (again dont quote me as we already had he flat)...

My finances were easy so I just used the firm who did all our paperwork.
Otherwise if you have a more complex situation you would be best to find someone either in the UK or here before you move to explain what you might be liable for.

Kerwin6265

Thanks again all makes sense would look to maybe sell and rent first. Truly are born free taxed to death...........

Barriej

Renting should always be the best way, unless you have visited an area lots before moving. We have family here and visited for over 15 years before deciding to move and I was still hesitant about this area.
Friends moved to the south and hated it in the winter (they did this three times before settling on this area) they were glad they rented.

Yep, but to be fair I think its better here, the more you have the more you pay.
There is a tax on property purchases of around 10% which to me is fair as it stops people treating property as a cash cow and more as a place to live.
Income tax is higher than the Uk (well if you earn enough anyway).

Ronnyone

As othe poster has says- interest on any form of savings etc is taxable. Unlike in uk there are not really any tax free instruments. Allowances are much lower too. Basically you declare everything here. Note that technically if you get a NLV you are in theory saying you are going to be liable to tax as the monthly money required from unearned income is around 2.500 euros.

spainrico

Suggest you have a look here as well

https://www.ageinspain.org/post/gene...ormation-spain

Link came from the New Guide to Spain - mentioned in another thread which you might find useful.

Listen Very Carefully

Do not have a UK bank account registered to a relatives address .There could be all sorts of problems for both you and the relative .Some banks still allow EU residents to keep a UK account just ask your current bank or if not try others.Personally I would open a Wise multi currency account that will give you both UK and Spanish bank details and you can get your pension paid into it and then transfer it across at a better rate than the banks

Notdunroamin

Forget any comparisons with UK, 'tax free anything' are anathema in Spain!

snikpoh

With the exception of wealth tax of course.

Ronnyone

Given today's slide yet again in bank share prices I would be wary of things like Wise. The markets clearly are not convinced that everything is fine out there.

Fredbargate

I was basically bankrupt in 1991 with the BCCI fiasco,
Sent an employee to the bank to collect the wages, he came back with the news that the bank was closed.
Since then I have kept numerous accounts and this week have been moving money to ensure most are within the £85.000 limit

However I am hopeful that the Gibraltar International Bank is safe
Fully owned by the Gibraltar Government.

Ronnyone

Having a government back it doesn't mean you simply get your money back like that. You would have to wait months if not years and no doubt jump through many hoops. Not much good if you are relying on it to pay for things. Any savings bank is investing and the smaller and medium players who offer the best rates do so as they have to take more risks with less money. These are the ones that are first to go as these are where the runs start. The big banks offer the worst rates because they have the most customers and spread their risk. They would be less likely to suffer a run- basically if they go everything goes!

I should amend the above: just heard on news that Duechebank in Germany is in trouble and that is a big bank! So I'm wrong !!!!