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The 2024 Autumn Budget: The Perfect Opportunity for Brits in Spain to Mitigate UK and Spanish IHT
The UK’s 2024 Autumn Budget has introduced a seismic shift in the tax landscape, replacing the domicile test with a straightforward residency-based system. For British expats living in Spain, this marks a once-in-a-generation opportunity to protect your wealth and shield your loved ones from the dual burden of UK inheritance tax (IHT) and Spanish IHT.
With prudent planning and expert guidance, you can move your assets outside the UK and into structures that not only safeguard your estate from the UK’s punitive 40% IHT rate but also mitigate Spanish IHT liabilities in one strategic move.
Why the Budget Changes Matter
The 2024 Autumn Budget fundamentally changes how inheritance tax is applied, particularly for British expats:
- Residency, Not Domicile, Now Determines Taxation:
- If you’ve been non-resident in the UK for over 10 years, your foreign assets can fall outside the scope of UK IHT.
- However, assets left in the UK remain fully exposed to UK IHT at 40% on anything above £325,000.
- Opportunity to Align with Spanish Tax Laws:
- For Brits living in Spain, this shift provides the chance to restructure your estate to minimize or eliminate IHT liabilities in both countries.
- A Call to Action:
- The longer you delay, the greater the risk. Without action, outdated UK products like ISAs, savings accounts, and UK investments expose your wealth to unnecessary taxes in both the UK and Spain.
Why Leaving Assets in the UK Is a Risk You Can’t Afford
Keeping assets in the UK as a British expat living in Spain is a risk that grows with time:
- 40% UK IHT on UK-Based Assets:
- Assets such as ISAs, UK savings accounts, and UK investments are fully within the UK IHT net. This means your family could lose nearly half of your estate to the taxman.
- Inefficiency Under Spanish Tax Laws:
- Many UK financial products, such as ISAs, lose their tax advantages once you’re a Spanish resident. They are not recognized as tax-efficient under Spanish law and can create unnecessary compliance and reporting obligations.
- Dual-Tax Exposure:
- If not managed properly, UK-based assets could also leave your beneficiaries exposed to Spanish IHT, creating a double tax liability.
The Solution: Move Assets Strategically with Expert Guidance
The key to mitigating both UK and Spanish IHT lies in moving assets outside the UK and restructuring your estate. But it’s essential to work with a qualified and regulated financial adviser in Spain, like Chorus Financial, to ensure the right solutions are implemented.
What You Can Achieve with Expert Planning:
- Mitigate UK IHT:
- By moving UK-based assets into the right structures, you can shield them from the UK’s 40% IHT.
- Mitigate Spanish IHT:
- With expert advice, it’s possible to utilize products and planning strategies that also reduce or eliminate Spanish IHT, ensuring compliance with Spanish tax laws.
- Simplify Inheritance for Your Beneficiaries:
- Proper planning ensures a seamless, tax-efficient inheritance process for your loved ones, whether they live in the UK, Spain, or elsewhere.
- Retain Control of Your Wealth:
- The right financial solutions allow you to maintain access to and control over your assets during your lifetime while protecting them for future generations.
Why Work with Chorus Financial?
At Chorus Financial, we are uniquely positioned to help British expats in Spain navigate these complex changes. As a Spanish-regulated and qualified advisory, we provide bespoke solutions that address the unique needs of expats while ensuring full compliance with both UK and Spanish tax laws.
Our Expertise:
- Dual IHT Mitigation: We help you reduce or eliminate inheritance tax liabilities in both the UK and Spain.
- Access to Trusted Providers: We work with regulated financial solutions from household-name providers to deliver security and peace of mind.
- Tailored Advice: Every client’s financial situation is unique, and we craft solutions that align with your goals and legacy planning needs.
Act Now: The Perfect Opportunity
The 2024 Autumn Budget presents the ideal opportunity for Brits in Spain to take control of their financial future. By working with a regulated financial adviser like Chorus Financial, you can:
- Remove your assets from the UK tax net.
- Mitigate both UK and Spanish IHT liabilities.
- Ensure your family inherits your wealth, not the tax burden.
This is not just about tax efficiency—it’s about securing your legacy and protecting what matters most. Contact Chorus Financial today for a free consultation, and take the first step toward a tax-efficient and secure future for you and your loved ones.
Qualified & Regulated Advice
Contact Chorus Financial today for a free, no obligation call with a qualified Financial Adviser in Spain. Provide brief information on what you need help or advice with, and let us know what part of Spain, or elsewhere, you are based in so we can assign the best Spanish based financial adviser for you.