HEALTHPLAN MAGAZINE

Spain is undeniably a top pick for those seeking sunny retirement years. With its consistently pleasant weather, delicious cuisine, rich culture, relaxed lifestyle, first-class healthcare, and a more attractive cost of living, it's no wonder retirees often consider Spain for their dream retirement abroad.

However, it's important to note that although you can retire to Spain if you are a UK citizen, there are distinct rules and regulations in Spain that differ from those in the United Kingdom. Individuals contemplating retirement in Spain should acquaint themselves with these specific factors prior to relocating. Alternatively, seeking assistance from a solicitor well-versed in these matters can provide valuable guidance throughout the process.

In this article, we aim to answer some of the most common questions asked about retiring to Spain, such as:-

• What are the rules and requirements needed when retiring in Spain?
• What is the Spanish retirement visa?
• Has Brexit affected retiring to Spain?
• What are the financial requirements to retire in Spain?
• What taxes are payable on retirement to Spain?

What are the rules and requirements needed when retiring to Spain?

Spain is a popular retirement spot, but many British citizens looking to retire here aren't aware of the specific laws they need to follow now that the UK is no longer part of the EU. Non-EU citizens now need a residency visa, initially valid for a year and extendable.

To get a permanent residency visa for retirement in Spain, you'll need to provide documents like your passport, a medical certificate, and proof of health insurance. A criminal record check is also required which will need to show a clean record for the past five years. Keep in mind that once you've retired in Spain, you'll need to abide by Spanish law, which could be different from what you're used to in the UK.

What is the Spanish retirement visa?

A Retirement Visa serves as a residency permit for non-EU/third country citizens who want to retire in Spain. Often known as the "Non-lucrative Visa," this permit grants individuals the opportunity to reside in Spain temporarily. It's crucial to understand that the retirement visa does not grant authorisation for employment or engagement in commercial undertakings within Spain and its affiliated regions.

Initially, the visa is bestowed for a one-year duration and subsequently can be extended for an additional two years, followed by another two years.

Has Brexit affected retiring to Spain?

Brexit has, without a doubt, impacted the process of retiring to Spain for British citizens. One of the most notable changes is the requirement for a residency permit. Previously, as part of the European Union, UK citizens could retire to Spain with relative ease, benefitting from the freedom of movement within the EU. However, post-Brexit, British retirees now need to navigate a more structured visa system. Options such as the Golden Visa and Non-Lucrative Visa have emerged as popular choices, each with specific eligibility criteria and obligations.

This shift underscores the importance of understanding and adhering to the new regulations in order to make a successful transition to retirement in Spain.

What are the financial requirements to retire in Spain?

Retiring to Spain entails the crucial requirement of demonstrating a sustainable financial standing, ensuring that individuals have the means to support themselves during their retirement years. For non-Spanish residents, a specific income threshold must be met, currently set at just slightly above 28,000 euros per annum (equivalent to approximately 2,400 euros per month) for an individual. However, it's important to acknowledge that this figure might undergo adjustments, underscoring the necessity of seeking counsel from a legal expert before embarking on the relocation process.

The diversity of income origins is a notable aspect. A considerable number of retirees find their pension to be a sufficient and dependable source of financial support, alleviating concerns about sustenance while living in Spain. Whether through private pension plans, state pensions, or other retirement accounts, these funds can provide the financial stability necessary for a comfortable retirement experience in the Spanish setting. In essence, having a well-structured financial plan, centered around an adequate income source, is a fundamental component of successfully transitioning into retirement in Spain.

Learn more about the minimum income requirements for residency.

What taxes are payable on retirement to Spain?

Moving to Spain as a UK retiree comes with clear tax obligations that require careful consideration. Firstly, when you start drawing your pension, you'll need to navigate Spanish income tax regulations, meaning a portion of your pension will be subject to taxation according to Spanish law. Additionally, if you decide to sell property in the UK, capital gains tax might apply, impacting the overall financial outcome of the transaction.

Moreover, Spain implemented a wealth tax that targets assets exceeding 700,000 euros. The more valuable your assets, the higher the corresponding tax liability. This progressive tax structure underlines the significance of understanding your financial position and the potential tax implications as you plan your retirement in Spain.

If you would like some help to effectively manage these obligations and make informed financial decisions, please consult with tax professionals who possess the expertise to guide you through the intricacies of Spanish tax laws.