This is a very historic moment for the UK. 43 years after joining the European Community it now starts the process of leaving the EU. This is new territory for us all, and while we hope for a smooth transition there will be a period of uncertainty until the various negotiations are completed and we find out what the changes will be.
Leaving the EU will affect most UK nationals, in varying degrees, whether you live in the UK or abroad. Expatriates living in the EU have extra concerns such as over residency and healthcare.
No-one can be sure exactly what will happen next, but we can put your mind at ease in some key areas.
Is there anything I should be doing now?
It is expected to take at least two years, if not longer, to work out the terms for leaving the EU. Nothing changes in the short-term. You will have plenty of time to consider how to respond to whatever changes emerge.
Do I have the right to stay in Spain?
Speaking on 24th June, the acting Prime Minister, Mariano Rajoy, said that in all likelihood the procedure will last at least two years, that the rights of Spanish citizens in the UK remain unchanged for that period and the same can be said for British citizens residing and working in Spain.
Looking ahead, with so many EU nationals living in the UK and vice versa, we would expect new bilateral and multilateral residency agreements to be worked out, and these could maintain the current benefits of EU membership for expatriates.
What about healthcare?
As with residency, your current healthcare benefits should continue for the next couple of years until the Brexit terms have been ironed out. Again, it is possible that new bilateral agreements will be negotiated with regards healthcare for expatriates, but we will need to wait and see what happens here. It may become more important to have good private health insurance.
What about taxation? Will I pay more tax in Spain?
If you are resident in Spain, Brexit will not affect how you are taxed here. The local rules will remain the same as for all residents, and double tax treaties, such as the one between the UK and Spain, are independent of the EU, so your existing tax treatment will continue to apply.
For those who are non-resident in Spain, there is a possibility that they may have to pay some higher taxes in future, where Spain taxes non-EU and non-EEA residents a higher tax rate than Spanish and EU/EEA residents.
What about my investment portfolio?
If you use tax-efficient investment structures which are provided by companies outside the UK, such as the ones Blevins Franks recommends to clients, these are not dependent on UK rules and are not affected by Brexit.
We are clearly in uncharted waters. High levels of uncertainty, from both economic and political perspectives, is never a good thing for investors. But the lesson learnt is not to make any rash panicked investment decisions before the dust has had a chance to settle. Along the way there will be good opportunities for long-term investors to benefit both from asset allocation and sector/stock selection decisions at much more attractive prices. The way this can be best managed is via a diversified long-term strategic asset allocation plan.
While the longer-term implications are difficult to predict, with professional and personalised financial advice, you can make sure that you are prepared and in a good position to protect yourself, whatever the future brings.
Blevins Franks operates in Spain, France, Portugal, Cyprus and Malta as well as the UK. The company’s advice to expatriate clients is provided from outside the UK and so is not affected by the vote. The team remain in a strong position to continue to provide compliant wealth management and tax planning solutions to British expatriates in Europe and those who have returned to the UK. As always, its priority is serving the needs of its clients.
Blevins Franks Financial Management Limited (BFFM) is authorised and regulated by the Financial Conduct Authority in the UK, reference number 179731. Where advice is provided outside the UK, via the Insurance Mediation Directive from Malta, the regulatory system differs in some respects from that of the UK. Blevins Franks Trustees Limited is authorised and regulated by the Malta Financial Services Authority for the administration of trusts and companies. Blevins Franks Tax Limited provides taxation advice; its advisers are fully qualified tax specialists. This promotion has been approved and issued by BFFM.
More about Blevins Franks tax advisors
For more information and personalised advice, contact Peter Worthington, Senior Partner at Blevins Franks, on +34 971 719 181 or email@example.com.
To keep in touch with the latest developments in the offshore world, check out the latest news on Blevins Franks Tax & Wealth Management Specialists.
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This article was written on the 05th of July, 2016.