Setting up home in Mallorca? The financial essentials

pend on the beneficiary, where the deceased and the beneficiary are resident, and where the assets are located. Rates, allowances and exemptions vary per region, so seek advice from a local adviser to understand how your family will be affected.

By Cathal Rochford, Partner, Blevins Franks

tax, which generally hits those with worldwide assets worth over €1 million – there is a personal allowance of €700,000 plus up to €300,000 for a resident’s main home. The Balearics rates start at 0.28% and rise to 3.45% for wealth over €10,909,915.

You can often use compliant arrangements to lower taxes on investment income, assets, pensions and estate. Depending on your situation, you may be surprised at how much tax you can save.

Estate planning

Besides succession and gift tax, you also need to understand how Spanish succession law and its forced heirship regime will affect your family.

However, the EU succession regulation ‘Brussels IV enables foreign nationals to elect for the law of their country of nationality to apply.

ings and investments, the better. Make sure they are structured in the most suitable way for your new circumstances and objectives, taking your appetite for risk into account.

British expatriates need to think about currency. Once you are living in Mallorca and spending Euros daily, keeping savings in Sterling makes your income vulnerable to exchange rate fluctuations. Look for structures that let you diversify by holding investments in multiple currencies, with flexibility to choose the currency of withdrawals.

At the same time, you want them to be structured in the most tax efficient way for Spain, and to meet your estate planning wishes.

Pensions

Pensions are another key issue f to consider for your future in Mallorca. There are various options available how they work for you and the Spanish tax implications. If you have not yet started drawing your pension, seek advice before you do.

Careful and early financial planning can help you make the most of what Mallorca has to offer. The sooner you carry out your tax and wealth management planning, the sooner you can relax and get on with enjoying your new life here. Crossborder wealth management is a complex area, so take specialist advice to secure the best results.

Tax rates, scope and reliefs may change. Any statements concerning taxation are based upon our understanding of current taxation laws and practices which are subject to change. Tax information has been summarised; an individual is advised to seek personalised advice.

Keep up to date on the financial issues that may affect you on the Blevins www.blevins