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The Federation of European Independent Financial Advisers

It can be comforting to retain the financial assets you have always had as they are familiar in a way that you understand. This is a natural feeling especially as many people are adapting to the Spanish way of life.

However, the questions to ask are, is this wise, is this the best strategy to avoid overpaying tax and could you be sacrificing potential better opportunities just to feel safe?

We now live in different times. The financial services landscape for UK nationals living in EU countries has now been re-written following Brexit.

While British expatriates will open a local bank account in their country of residence, many will also retain their UK bank accounts and often also keep UK investments such as National Savings & Investments and ISAs.  This is partly for convenience but also because they are familiar and feel secure.

One major consequence has been that many UK-based banks have had to close UK accounts held by EU-resident clients, leaving expatriates without the bank account they may have used for many years.

Following Brexit many British expatriates received letters from their UK banks asking them to close their accounts.  The situation is evolving, and you should question whether your bank accounts in the UK are fit for purpose now.

Nationals Savings & Investments (NS&I)

The situation with NS&I accounts is a little different, but linked, with the same outcome.

Nationals Savings & Investments have always been a UK savings provider, backed by HM Treasury, and it does have some customers who live abroad.  However, they still need a UK bank or building society account in their name.

Premium bonds prizes for example are tax free in the UK however if you are a Spanish tax resident (live in Spain for more than 183 days), these prizes would be added to your taxable income for Spain for the year in question. Similarly, any of the otherNS&I savings products would need to be included in your Spanish tax return.


The above maybe tax free in the UK, but any interest and gains made from these are fully taxable in Spain if you are resident here. Savings income tax rates are 19%, 21%, 23% and 26% depending on how much savings income you have.

UK investments

When the UK left the EU in 2020, its financial advisory services industry lost EU passporting rights. This means that UK-based financial advisers are no longer automatically authorised to give advice to EU residents unless they have the necessary regulatory permissions in each jurisdiction their clients live in. At Blacktower Financial Management we hold the necessary licences in each jurisdiction we operate in to advise you as an expatriate living in Spain.

Ideally you should review all investments such as bonds, stocks, and shares you hold, as besides income tax, you could also face capital gains tax in Spain.

There are more tax efficient options available which we lead into now.

The alternative options in Spain as an expatriate.

Your investments should be structured around your individual needs and objectives taking into consideration your time horizon and risk tolerance.

There are highly tax efficient opportunities available to all residents of Spain. One of the more favoured alternatives is a Spanish tax compliant life assurance contract which acts as an investment wrapper. With this structure, tax is not payable on income from the underlying asset until a withdrawal is made, and even then, only the gain is subject to tax.

You should regularly review ALL your savings and investments to make certain they are tax efficient and meet your objectives and life in Spain.

Breaking old habits can help us grow as individuals but also your financial picture can be enhanced greatly if you take specialist advice.

This article was kindly provided by Blacktower Financial Management Group and originally posted at:

The above contents and comments are entirely the views and words of the author. FEIFA is not responsible for any action taken, or inaction, by anyone or any entity, because of reading this article. It is for guidance only and relevant professional advice should always be taken before investing in any assets or undertaking any financial planning.