Most asked questions regarding BREXIT and TAX implications, very helpful!
Questions and Answers in regard Great Britain citizens post Brexit. Charles Gubbins from Noll Sotogrande Real Estate interviewed Magdalena Marín García from Triay & Triay Lawyers Spain to clarify some of the most asked questions by clients and colleagues on this topic.
Charles Gubbins: Are British citizens that legally resided in Spain before 31st December 2020 i.e. Before Brexit required to update their residency status?
Magdalena Marín García: Those who were officially residing in Spain (i.e., legally registered with the Spanish Authorities) before 31 December 2020, will continue enjoying the rights of residence, free movement and social security recognised by the Brexit Withdrawal Agreement without having to re-register or otherwise. This is typically evidenced by having green A4 certificate or credit card-sized piece of paper issued by Extranjería or the police.
If you are registering for the first time, you will be issued with a residence card called a Tarjeta de Identidad de Extranjero (TIE).
You can exchange your paper EU residence document for the new TIE, but you are not required to.
What are entry requirements for British Citizens after 1st January 2021.
You can travel to the EU zone for up to 90 days in any 180-day period without a visa for example for purposes such as tourism.
To stay longer than 90 days in any 180-day period, you will need to apply for a visa, work permit or study permit. These processes have yet to be clarified.
It should be noted that the periods of time that have been authorised by a visa or permit will not count towards the 90-day visa-free limit.
Is it necessary to Exchange my UK license for a Spanish one if I am a resident?
Yes, even though your UK licence will continue to be recognised until 30 June 2021, you will need to exchange your UK licence for a Spanish one if you are a Spanish resident (as provided for above).
To exchange your driving license, you were required to register your details with the DGT (Spanish Traffic Authority) before 30 December 2020 and you must make an appointment with the DGT to complete the exchange of your UK licence by 30 June 2021. You will have to show proof you are registered as a Spanish resident at the appointment.
Does Brexit affect the manner in which British Citizens are taxed in respect of their Spanish properties (whether buying, selling or otherwise).
The double taxation arrangements for UK nationals living in Spain have not changed.
The UK has a double taxation agreement with Spain to make sure that you do not pay tax on the same income in both countries.
Will British Citizens (resident in Spain or not) have to pay more transfer tax, VAT or AJD (Documented legal Acts) when they purchase a property in Spain?
The answer is NO. The “ITP” transfer tax paid in Spain for the purchase of second-hand homes will be the same for EU citizens and non-EU citizens, meaning that Brexit will not lead to greater tax expenses for British citizens.
It will also be the same taxation for new off-plan Properties, VAT tax and AJD (documented legal acts).
Will capitals gains tax, upon the sale of a Spanish property, change for British citizens who are not resident in Spain?
No. Capital gains tax will remain the same at 19%.
Will British citizens non-resident in Spain still pay a rate of 19% on the profit obtained from renting their property in Spain?
The answer is NO. After Brexit, British citizens are taxed at a rate of 24 percent and not 19 percent taxed for EU citizens in their Non-Resident Income tax (210 form).
What about other taxes such as inheritance tax and wealth tax for British citizens after Brexit… will any of these change?
Inheritance Tax: After the Judgments of the Supreme Court in February and March 2018, it was determined that citizens not resident in the European Union are able to obtain the same tax benefits and reductions for inheritance tax as European citizens. Therefore, the application of inheritance tax and its consequences will not change for British citizens after Brexit.
Wealth Tax: Spanish Wealth Tax is payable by both residents and non-residents. Residents and non-residents are entitled to a minimum personal exemption of €700.000, meaning that if per person (non-resident) has assets in Spain that has a lower value tan 700.000,00 euros, they will not have to pay wealth tax in Spain.
This exemption applies for EU citizens and also for non-EU citizens, so this will also not change after Brexit.
Thank you for your interest, if you need more information regarding Brexit or TAX implications, please contact Magdalena Marín.
Magdalena Marín García
Triay & Triay Lawyers
Centro Comercial Mar y Sol, Puerta 6.25
Sotogrande, San Roque, 11310 Cadiz
Tel: +34 619013207
Email: magdalena.marin@triay.com
