Blacktower FM - Issue 18 - 2026 Magazine - Flipbook - Page 44
LDEUGBAACI YE D
ED
I TI ITOI O
NN
LIFESTYLE
RELOC AT ION,
RELOC ATI ON,
RE LO C AT I O N .
Thinking of Europe? Considering Spain is a must BUT what
about the 昀椀nancial plan?
By Patrick Macdonald, Senior Financial Adviser at Blacktower Financial Management
Whilst there is no doubt that living in the Middle East has
huge bene昀椀ts in terms of tax and lifestyle, there o昀琀en comes
a 琀椀me in most expat’s lives when the desire to move closer to
home becomes too strong to ignore. This could be triggered
by a combina琀椀on of reasons but o昀琀en includes approaching
re琀椀rement, a career move or a longing for a more European
culture, A.K.A. ‘home sickness’.
Whatever the reasons, it’s common for folks who are used
to the (sunshine driven) out-door, cosmopolitan lifestyle to
not only look for somewhere closer to home but to seek out
their version of Elysium - keeping a warmer climate and a
culture that goes with it as well as being in shoo琀椀ng distance
of family in northern Europe for instance.
One could argue there are several countries that 昀椀t this bill.
Italy, Portugal, Greece, Cyprus or Malta for example. Certainly
some of those places have a琀琀rac琀椀ve tax regimes for folks
used to the system in the UAE - but I would argue non have
the overall a琀琀rac琀椀on of Iberia’s jewel in the crown – Spain.
Why would I say this? Well, I’ve lived there for 15 years of
my life and can speak from experience.
In simple terms, as well as one of the best climates in the
world, diversity of experience is the essence of the a琀琀rac琀椀on.
All over the country you have some of the most beau琀椀ful
mountainous regions, green and pine clad in the summer,
snow capped in the winter. Wonderful beaches, vibrant
cosmopolitan areas, truly interna琀椀onal communi琀椀es with
all the infrastructure you need, o昀琀en only a short journey
away from the contrast of rich and ancient history in the
towns of pueblos of rural Spain. Oh, and the food, I could
write a book on that alone!
Anyways, I’ll leave the rest of that for the tourist board. But
what about the tax and 昀椀nancial planning issues to take into
considera琀椀on if you’re contempla琀椀ng the move?
44
Tax and Financial Planning
Firstly, let’s talk about residency. How is this determined?
Well not necessarily from the 琀椀me you get your visa (if you
are a non-EU ci琀椀zen) but rather how many days you spend
in the country during a calendar year. 183 being the ‘magic’
琀椀pping 昀椀gure as it were. In fact even if you spend less 琀椀me
than that, the government may deem you resident if your
‘centre of vital interests’ can be proven to be in Spain (your
main home is there, your family live here, your children go
to school in the country etc) - but let’s not delve too deep
into those reeds.
The 183-day rule is important though as it could determine
when you become tax resident. The Spanish 昀椀scal year is
a calendar one star琀椀ng on January the 1st un琀椀l December
31st. The Spanish tax authority (colloquially known as ‘Hacienda’) treat your tax status retrospec琀椀vely based on this.
So if you arrive, ‘boots on the ground’ in the 昀椀rst 6 months
of the calendar year they will deem you tax resident from
January 1st that year BUT if you arrive in the second 6
months of the year your 昀椀scal residency can be delayed
un琀椀l January of the following year. This could make a big
di昀昀erence to your tax planning – especially if you need to
sell assets during your reloca琀椀on.
So it pays to plan ahead as Spain is a not a ‘tax haven’. The
昀椀rst step here is to make sure that you sell everything that
you have a mind to sell (property and investments for example) before you become a 昀椀scal resident. So if you live in a
tax ‘friendly’ country like the UAE, make sure you don’t leave
this too late as you could 昀椀nd yourself with an unnecessary
capital gains tax exposure in Spain.
Furthermore, if you are Bri琀椀sh and over the age of 55 (or
57 from 6 April 2028) with a UK pension – consider taking the 25% PCLS whilst it remains tax free as the Spanish
