If you are a UK expat living in Spain, your financial situation involves both UK and Spanish rules. Your UK pension, investments, tax position and estate planning all need to be considered in the context of both jurisdictions. This guide covers the key questions worth asking — it does not provide personalised tax advice.
Your UK pension
Your UK pension remains yours when you move to Spain. You can generally leave it where it is — you do not have to transfer it.
Key questions:
- Can I leave my UK pension where it is? Yes, in most cases. See our guide: I Live Abroad – What Happens to My UK Pension?
- How are pension withdrawals taxed in Spain? This depends on the UK-Spain double taxation treaty and your Spanish tax residency status. Spain may tax pension income, and Spanish social security contributions may apply. Seek specialist tax advice.
- Should I transfer my UK pension? Not necessarily. Leaving your pension unchanged may be perfectly appropriate. Never transfer on the recommendation of an unregulated adviser.
- Can I keep my SIPP? Yes. Whether you can continue contributing depends on UK relevant earnings.
Source: GOV.UK — Tax on your private pension contributions
Existing UK investments
Your existing UK investments (ISAs, general investment accounts, shares) remain yours but their tax treatment changes when you become a Spanish tax resident.
Key questions:
- Are my ISAs still tax-free in Spain? ISAs are a UK tax wrapper. Spain does not recognise the ISA wrapper, so investments within an ISA may be subject to Spanish income tax and capital gains tax.
- How are UK dividends taxed in Spain? UK dividends may be subject to Spanish income tax. The UK-Spain double taxation treaty determines which country has taxing rights.
- Should I move my UK investments to Spain? Not necessarily. Some UK investments may not be available to Spanish residents. A regulated adviser can help you assess the options.
Can your existing adviser continue advising you?
Many UK financial advisers are only authorised to advise UK residents. When you move to Spain, your adviser may no longer have the regulatory permission to provide advice to you.
Key questions:
- Is my UK adviser regulated to advise clients in Spain? Ask them directly. They may need to be regulated by the CNMV (Comisión Nacional del Mercado de Valores) or hold EU passporting rights.
- If not, how do I find an adviser who is regulated in Spain and understands UK assets? See our guide: How Do I Find the Right Financial Adviser When Living Abroad?
Spanish residence considerations
When you become a Spanish tax resident, you are generally taxed on your worldwide income. Spanish tax residency is primarily based on spending more than 183 days per year in Spain, or having your centre of economic interests in Spain.
Key questions:
- Am I a Spanish tax resident? If you spend more than 183 days in Spain in a calendar year, you are likely a Spanish tax resident.
- What is my UK tax residency status? The UK uses the Statutory Residence Test. The UK-Spain double taxation treaty tie-breaker rules determine which country has primary taxing rights if you are resident in both.
- Do I need to file tax returns in both countries? Possibly. Check with a cross-border tax specialist.
Source: GOV.UK — Tax if you leave the UK to live abroad
Currency
If you have income or assets in GBP but your living costs are in EUR, currency fluctuations can have a significant impact.
Key questions:
- How do I manage GBP/EUR currency risk? Consider a currency management strategy, including regular transfer arrangements.
- Should I hold investments in GBP or EUR? This depends on your spending needs and long-term plans.
Property
If you own property in the UK and/or Spain, there are tax considerations in both countries.
Key questions:
- How is my UK property taxed if I live in Spain? UK property may be subject to UK capital gains tax on sale, and Spain may also seek to tax the gain. The double taxation treaty determines which country has taxing rights.
- If I buy property in Spain, what taxes apply? Spanish property purchase taxes (ITP or IVA) and ongoing property taxes (IBI) may apply.
- Does Spain have a wealth tax? Spain has a wealth tax (impuesto sobre el patrimonio) that may apply to residents depending on the region and the value of your worldwide assets. Some autonomous communities have more favourable thresholds or exemptions. Seek specialist tax advice.
Estate planning
Spain has its own inheritance tax rules, which vary by autonomous community. This is particularly important for UK expats whose existing wills may not align with Spanish inheritance rules.
Key questions:
- Do I need a Spanish will? A Spanish will can help ensure your Spanish assets are distributed according to your wishes. You can have separate wills for UK and Spanish assets.
- How does Spanish inheritance tax work? Spanish inheritance tax varies by autonomous community. Some regions offer significant allowances or reductions for close family members. Seek specialist estate planning advice.
- Does my UK will still work in Spain? A UK will may be recognised in Spain, but the process can be complex. Having a Spanish will for Spanish assets is generally recommended.
Source: GOV.UK — Inheritance tax and double taxation relief
Returning to the UK
If you return to the UK, your tax position will revert to UK rules.
Key questions:
- What happens to my Spanish assets if I return to the UK? They remain yours, but their tax treatment will change.
- Do I need to notify anyone when I return? You should notify HMRC and the Spanish tax authority (Agencia Tributaria) of your change of residence.
Moving elsewhere later
If you move from Spain to another country, your financial situation will change again.
Key questions:
- Can my adviser continue advising me? Your adviser may need to be regulated in your new country of residence. Ask before you move.
- What happens to my Spanish tax position? Your Spanish tax residency will end, but you may have Spanish assets that continue to have Spanish tax implications.
Finding an appropriately regulated adviser
To find an adviser who understands both UK and Spanish rules:
- Check they are regulated in Spain — by the CNMV or through EU passporting
- Ask about their experience with UK expats in Spain
- Ask about their knowledge of both UK and Spanish tax rules
- Check they understand UK pensions and investments
- Verify their regulatory status on the CNMV register
Link Independent is a curated introduction service that helps expats and internationally mobile clients connect with appropriately regulated financial advisers based on their circumstances. Find an adviser or use the Expat Planner to get started.
Finding the right professional
Different circumstances can require different types of professional help:
- Financial adviser — for pensions, investments and financial planning. See our guide: How Can I Check Whether a Financial Adviser Is Regulated?
- Tax professional — for Spanish tax residency, filing obligations and UK-Spain double taxation treaty questions
- Legal professional — for wills, Spanish estate planning and property legal matters
- Mortgage specialist — for property financing across borders
- FX provider — for GBP/EUR currency transfers and managing exchange rate risk
Understanding the total cost of advice is important before you commit to any arrangement.
Link Independent can help identify appropriate professionals from its network based on your circumstances. Find an adviser or use the Expat Planner to get started.
Summary
- Your UK pension remains yours — you do not have to transfer it
- Your UK investments may be taxed differently in Spain
- Your existing UK adviser may not be able to continue advising you
- Spanish tax residency is based on the 183-day rule
- Spain has a wealth tax that varies by autonomous community
- Spanish inheritance tax varies by region
- You need an adviser regulated in Spain who understands UK assets
- Always seek specialist cross-border tax and financial advice
This guide does not provide personalised tax advice. Always consult a regulated adviser and a qualified tax professional.