Expat Financial Advisers and Wealth Tax

In fact, some jurisdictions such as Andorra, Georgia and Gibraltar have predicated a large part of their growth on attracting high net worth individuals to all the benefits and investment opportunities that are inherent in being a low-tax residency.

Despite a rich choice of low-tax jurisdictions to choose from, three of the EU countries that levy forms of wealth tax continue to be among the most popular retirement and residence destinations for UK expats: France, Spain and Portugal (although the Organization for Economic Cooperation and Development – OECD – does not include Portugal in its list of countries levying a tax on net wealth).

If you live in one of these countries or are considering a move, you should be aware of the implications of the various types of wealth tax and how they might affect you. Here we take a country-by-country look at some of the things you need to know.

France

Up until the end of 2017 French wealth tax applied to the total value of almost all assets – including savings and investments – however, since the start of 2018 all people resident in France have been liable for wealth tax only if they have global property assets worth more than €1.3 million. It should also be noted that the tax may also apply even if you are a non-resident; the same €1.3 million threshold applies to French real estate owned by non-residents.

Portugal

Portuguese Adicional Imposto Municipal Imobiliário (AIMI) tax (as an additional assessment to Imposto Municipal sobre Imóveis – IMI) applies to all Portuguese property that exceeds the €600,000 valuation threshold, regardless of whether it is owned by a resident or non-resident. Rates are applied as follows:

Companies: 0.4% over the total tax value of the properties with no threshold (if the property is used by a company shareholder, Director or their family, the tax rates for individuals will be applicable)
Individuals:
- 0.7% over the tax value of the properties owned over €600,000 and less than €1,000.000;
- 1% over the tax value of property valued at more than €1,000,000 and less than €2,000,000
- 1.5% over the tax value of the properties higher than €2,000,000
- The above thresholds may double if the property is owned by a married couple under specific marriage regimes when they opt to be taxed together
Offshore entities: 7.5% over the total tax value of the properties with no threshold.

Spain

Unlike Portugal and France, Spain levies a wealth tax based on the value of a range of assets including property, regular savings, investments, art and yachts. This makes speaking to your expat financial adviser about planning for wealth tax in Spain a necessity. For residents of Spain, the tax applies to all applicable global assets worth over €700,000 (double in the case of couples and with a deduction for a main home). For non-residents, Spanish wealth tax applies to Spanish-domiciled assets only, worth over €700,000. There may be some regional variation on the scale of the tax, so it is worth discussing this with your expat financial adviser.