Moving to Lanzarote

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  • 1 Post By Lynn R

Moving to Lanzarote


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Old 19th May 2017, 05:44 PM
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Default Moving to Lanzarote

We wish to move full time to Lanzarote. We are just below retirement age. We would be buying a small property in Lanzarote with savings. Our two options to live are a) rent out our current home in the UK and live on the rental income, b) sell our home and live on the proceeds until we receive our pensions. What are the Lanzarote tax implications of receiving the UK rental income and what are the tax implications of having a fairly substantial lump sum to live on? Any information or advice would be much appreciated.

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Old 19th May 2017, 05:58 PM
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Quote:
Originally Posted by nelster View Post
We wish to move full time to Lanzarote. We are just below retirement age. We would be buying a small property in Lanzarote with savings. Our two options to live are a) rent out our current home in the UK and live on the rental income, b) sell our home and live on the proceeds until we receive our pensions. What are the Lanzarote tax implications of receiving the UK rental income and what are the tax implications of having a fairly substantial lump sum to live on? Any information or advice would be much appreciated.
Can't help with the rental income question (hopefully someone else will be able to) but we lived on the proceeds of the sale of our UK home, plus savings and some inherited money from parents, for our first 8 years in Spain and were not required to pay any income tax at all as the amount involved was below the wealth tax threshold.

Something to be aware of, though, is that if you are due to receive any lump sums from workplace pensions when you retire, which would be tax free if you were still resident in the UK, those amounts would be taxable as income in Spain and can result in a high tax bill in the year you receive them.

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Old 19th May 2017, 06:18 PM
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See this link for an explanation of Spanish wealth tax:-

https://www.blevinsfranks.com/news/b...tax-spain-2017

If you are living off capital and choose to leave it invested in the UK or elsewhere outside Spain and just transfer sums for living expenses as required, you will be required to submit a Modelo 720 form to report overseas assets worth 50,000 or more in any one asset class (cash in bank accounts, property, investments, etc). This does not mean that you will pay tax on those assets - you are only taxed on any income you derive from them (eg interest or share dividends, etc).
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