The UK will be leaving the EU. It seems the process may commence in early 2017 and the negotiations could take several years. Even after that, the UK government could take much longer to change some aspects of the law and/or the investment and market conditions.
However in the meantime both individuals and business may wish to take action and pre-empt how best to protect themselves from any adverse outcome which may follow. But such considerations should be made also bearing in mind the current legal and socio-economic reality.
Individuals should not put back decisions about how to make their Spanish Wills (and learn how Spanish inheritance law and taxes currently work). The European Succession Regulation has never been application in the UK but is applicable in Spain and will continue to apply after the UK leaves the EU. If you have any property or financial interests in Spain then the European Succession Regulation will continue to apply to your Spanish estate (both now and after the UK leaves the EU). The sooner to take advice on this, the better.
Other aspects, however, are more likely to change after the UK leaves the EU, depending on what kind of Brexit there is. Thus, whilst at present UK nationals resident in the UK need to be treated like Spanish nationals resident in Spain for the purpose of Spanish inheritance tax, that could change in the future and as a result they may have to pay higher Spanish inheritance tax. Also the rate at which Spanish property non-resident income tax is paid could go up for UK nationals who may be treated in the future in the same way as other non-EU citizens. If you currently own a property in Spain, or a considering purchasing one, you should take further advice on such matters to make sure you are not caught off-guard.
Due to a weak Sterling, people in the UK have not fully benefited from the last Spanish property crash. Despite property prices in Spain remaining very attractive, they are slowing creeping up, but with the poor exchange rate against the Euro, those who have Pounds to invest in Spain will not be taking full advantage of current (fairly low) prices. Another by-product of the last Spanish property crash was that a large number of good quality properties became available (at reasonable prices). Whilst good properties tend to sell a lot quicker now, for the time being you can still find good properties to be had at reasonable prices; if you are intending to buy a second home or retire in Spain, you should consider buying now rather than later. When supply of good quality homes is short, most people turn to buying off-plan, but they have added practical (e.g. which view will you exactly have from your terrace?) as well as legal risks attached (e.g. will there be a delay that you have to endure?).
Both UK nationals living in Spain and Spanish nationals living in the UK are concerned about what they future holds for them: will they be able to travel visa-free? will they be able to work? will National Insurance Contributions made in one country be recognised in the other country for the purpose of a Pension entitlement? if you are a British pensioner retired in Spain, will your pension go up every year as if you were living in the UK or will they now be freeze?
We have been assisting clients with their Residency and Nationality questions. Other issues will be more difficult to answer until such time that the UK government (following a deal with the EU or otherwise) makes clear what UK and Spanish citizens can expect.
In these uncertain times, more than at any other, forward planning and sound advice becomes more important than ever.
For further advice on the above and other matters please email us: firstname.lastname@example.org
Manuel Martin & Associates
41 Whitehall, London SW1A 2BY