14Oct
2020

Brexit – Non Resident Owners

THE LEGAL AND TAX CONSEQUENCES OF BREXIT FOR NON RESIDENTS OF SPAIN

The United Kingdom left the EU of which Spain is a member on 31 January 2020.

The subsequent transition period whereby virtually all matters remain the same ends on 31st

December 2020 and from 1st January 2021 the full effects of Brexit according to the International

Treaty known as the Withdrawl Agreement signed by the UK and the 27 countries of the EU comes

into effect.

Residency Rights and Short Stays in Spain

The Criteria to apply to become a Spanish Resident will change for applications made after 1st

January 2021 and will not be the same as for applications made before that date under The Withdrawl

Agreement. The criteria applicable post 1st January 2021 are not yet known but are likely to include

requirements to prove a higher income threshold along with adequate Private Health Insurance cover

in all cases including for UK pensioners.

For non residents the right to visit Spain will remain, however as ´´Brexit ´´ brings to an end freedom

of movement in both directions visits will be restricted to no more than 90 in every 180 days to

countries in the ´´Schengen ´´ area of which Spain is a member.

Taxation

Some but not all Spanish Taxes will apply differently post 1st January 2021 in the same way as they

are applied to tax payers living in other countries outside the EU:

a. Actual Rental Income earned on property will be taxed at 24 % instead of 19% on the Gross

rental income received

b. Notional or Imputed Rental Income charged to all Property owners in Spain will be charged to

UK Tax residents at a rate of 24% instead of 19% at present

c. Likewise Non Resident Capital Gains Tax (CGT) on the disposal of Immoveable property

will be charged at 24% instead of 19%

There are NOT expected to be any other significant changes regarding the operation of Spanish

Inheritance , Gift and Wealth Tax post Brexit and the Anglo Spanish Double Tax Treaty intended to

prevent the double taxation of the same income and capital gain by both countries will continue to

apply.

Everyday living

As far as visits to Spain the following points should be noted as from 1st January 2021.

a. Please ensure that your UK Passport has at least a further 6 months to run before it expires to avoid

problems entering Spain which forms part of the Schengen area.

b. The European Union Health Card will no longer be recognised for UK residents by Spanish

Hospitals and Health Centres. Therefore Private Health Insurance to cover visits to Spain will be

essential.

c. UK issued ´´Pet Passports´´ will not be recognised in the same way and some forward planning as

regards vaccinations for animals will be essential.

If you require clarification on any of the points raised in this letter then please contact us . Equally we

can assist you with other issues relating to your Spanish property including:

-Powers of Attorney and Spanish Wills signed in the UK

-Spanish Capital Gains ,Inheritance or Gift Tax advice

-Non resident Tax Returns

– Utility services Banking issues and Insurance .

In particular last year important changes were introduced in Gift Tax in Andalucia as regards lifetime

gifts made between parents and children or spouses which reduces the tax burden of Gift Tax by up to

99 % of what was previously payable and you may be interested to find out more about this for you

and your family .

We remain at your disposition and would be grateful if you would acknowledge receipt of this

communication by e mail to p.rodriguez@interlex-spain.com.