Get Your (Old) House in Order
Moving is stressful even at the best of times, but the difficulties can be compounded when you are relocating across borders with all the administrative tasks involved. It can be tempting to bury your head in the sand and ignore legal obligations to liaise with your creditors, particularly as your UK credit score bears no relevance on your capacity to receive credit in Spain.
However, whether it’s regarding store card or mortgage debt, by letting all creditors know that you are moving and arranging a payment plan, you should have peace of mind and, importantly, the time and mental space you need to pay your debts.
It can be useful to remember that – the initial capital expenses of a move aside – the cost of living in Spain is significantly cheaper than that of the UK, which may give you more freedom and flexibility when it comes to structuring your finances, including the amount of taxes you will need to pay in Spain.
Also, it’s worthwhile remembering that you may one day choose, or need, to return to the UK. Whether you do this because you are missing the British Isles and the rain-soaked lifestyle or because of unavoidable family circumstances, you do not want to be returning unnecessarily to a queue of creditors, all eager for you to settle your debts. Such a situation would also result in you receiving a low credit score, which, if you have any pressing financial needs, could prove disastrous.
Spanish Wealth Tax
The Spanish Wealth Tax requires all residents in Spain (those who live in the country for 183 days a year or more), including expats, to declare and pay tax on overseas assets worth more than €50,000. Failure to disclose assets can result in a €10,000 fine as well as further sanctions, so it is worth being clear about this from the very start – expert financial advice can help in this regard as there may be ways you can structure your wealth to reduce liability.
Contact Blacktower Today
At Blacktower, we aim to make your transition to expat life as financially advantageous as possible. We provide bespoke financial advice on all matters including, Spain’s wealth management options, tax planning, international pension and education planning. Many of our team are expats themselves, so we know what we’re talking about!
Download our Spain Tax Guides here.
This communication is for informational purposes only and is not intended to constitute, and should not be construed as, investment advice, investment recommendations or investment research. You should seek advice from a professional adviser before embarking on any financial planning activity. Whilst every effort has been made to ensure the information contained in this communication is correct, we are not responsible for any errors or omissions.
Some of the most confusing and complex areas for any UK expat to decipher are their tax obligations, in both their new home country, and their country of origin. Should you be paying tax on foreign income? Is there any kind of foreign residence tax exemption? How can I get a residence tax definition? It’s a labyrinthine subject, and one that merits the help of a financial professional, but it’s good to be forearmed with a basic grasp of the subject before you do so. If you are liable to pay UK tax you will be expected to file a tax return, failure to do so or not doing so in good time, can result in penalties and even interest payments on monies owed.
January 2021: The Blacktower Financial Management Group of Companies today announces the appointment of Gavin Pluck as a Group Director.