Ensuring Tax-Efficient Investments for Retirement in Spain 

Jim, a 60-year-old UK tax resident, is still working but plans to retire in Spain at age 65, where he already owns a property. He has a lump sum of €2,000,000 to invest now and is keen to do so in a tax-efficient manner. Jim wants to ensure that he does not have to restructure his investment when he moves to Spain in five years’ time.

Investing in a financial product that is tax efficient in both the UK and Spain can be challenging due to differing tax regimes. Additionally, many offshore bond providers lack the capability to offer portability when moving out of the UK. Furthermore, some providers are not fully aware of the complexities involved in ensuring the offshore bond remains compliant in Spain. Key aspects of a policy that may need to be amended include:

1. Level of death cover
2. Beneficiary nominations
3. Investment options and underlying assets – an essential requirement that must be met through the whole life of the policy and cannot be endorsed at the time of relocation to Spain
4. Tax reporting and withholding taxes
5. Intermediary appointments

An offshore bond from Utmost Wealth Solutions offers Jim a compliant and tax-efficient solution in both jurisdictions. Our Technical Services team possesses the tax and regulatory expertise to adapt the policy and make it portable from its inception, ensuring it remains compliant and tax-efficient in both the UK and Spain.

Jim will benefit from the following tax advantages:

• Gross roll-up of income and gains (UK & Spain)
• 5% annual tax-deferred allowance (UK only)
• Reduced foreign withholding taxes on dividends (UK & Spain)
• Tax reporting (UK and Spain) and withholding tax deductions (Spain only) to simplify the policyholder’s tax liabilities through self-assessment
• No VAT on discretionary asset management fees (UK and Spain)
• Beneficiary nominations (Spain only) to simplify and expedite the death claim process
• Estate and wealth planning opportunities (Spain only)