Retiring early - Page 10

Hi Will, 

Thank you for the swift response. The pension income is annual but we will also have around 90,000 Euros in savings. 

I am hopeful that both would suffice?

Warm regards 

Graham. 

It is early days for this new process, so nobody really knows yet.

But the general idea is (in round numbers, for a couple) ...

You need to show you have 33K Euros available to you for your first year. It seems that this can be a mix of demonstrable, predictable pension income and cash in the bank.

Then, at the end of year 1, you have to show that you have 66K Euros (to get you to the end of year 3).

Same again at end year 3.

Then, at year 5, you are seeking to make your Residency "permanent", and you may need to show some more money (but nobody knows for sure).

This might sound dreadful, but if you don't blow your 90K fund on a Ferrari, you should be able to make it work.

In your favour ... as you both have Crown pensions, your income tax liabilities on these pensions stay in the UK. Spanish income tax is generally higher than the UK, so this is a good thing for you. When your UK State Pension becomes payable, that will be taxed in Spain.

Keeping much of your tax liability in the UK is beneficial. If you become tax-liable in Spain, the cut-over process is painful. We gained Spanish Residencia in August 2018. We have private sector pensions. We became liable for income tax in Spain on 1/1/19. We paid our 2019 taxes (in 2020). We will shortly have to pay our 2020 taxes, but we still have not received a refund from the UK tax authorities. So, coupled with the  higher tax-take in Spain, we are out by £££££s. 

If you gain NLV/TIE between July and December 2021, you will become tax-reportable on 1/1/22. You will still need to declare info to the Spanish tax authorities, but you should view your Crown pensions as golden. 

Hi Will, 

Again, thank you for the swift response. We have looked at a few properties in the Santiago de la Ribera area. It looks lovely. 

After speaking to my wife after lunch we think it may be an idea to keep the funds in our bank account from the sale of our house (approx £150,000 - that would take our fund up to £200,00) and rent a property for the first year. Dead money we know, but that will give us plenty of time to find somewhere in Murcia we really like, at the same time retaining the funds for the year 2/3 application. We don`t want to rent for that long though. 

Do you know if equity in a Spanish owned property would count towards the funds needed for years 2-5 for extension of the Visa. As you rightly said, early days and I guess accurate information is sparse?

Warm regards

Graham. 

Sorry. Can't help with that one. I guess we will learn from others as we go along.

I live just over the border in Alicante Province, but my brother-in-law has a holiday home in Santiago de la Ribera, and I have a share in a boat in Los Urrutias - hence why I look in on this forum occasionally.

I was keeping an eye on his house, but the border has been closed since late last year - so I hope the house is still there !

I like Santiago; you are looking at nice areas. The 2019 Gota Fria caused lots of damage. Santiago was hit quite hard (although my relative's house was high enough to avoid it by about 2 inches), so I suggest you look at the flood maps before you make any commitments.

You might want to have a look at Torre de la Horadada, just over the line in Alicante. It has the same "feel" as the Mar Menor towns, but is has the Med, and the local geography protected it from the worst of the floods.

Make sure you do not sell a UK property in the year that you become tax resident in Spain. Capital gains taxes would take a large lump out of your nestegg.

Thank you Peter. 

Great advice there, that would have slipped the net had you not mentioned it. 

Warm regards

If you Sell in one calender Year and Buy and become resident the next year I think you do not get Spainish CGT.

IF you spend €500000 on houses/property I think I have seen you get a Golden Visa.

You can also set up a business (it does not have to be very actice) and become resident.

thanks for the response. 

Will bear that one in mind.