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Brexit and Spain

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Brexit and Spain

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Our perspective is that of accountants and tax consultants in Spain. We deal with a wide range of resident and non-resident Brits (and other nationalities), working or doing business in Spain or simply having a holiday home and retiring to this most pleasant country.

Regardless of the merits of the decision to exit the EU, there has already been very considerable confusion and worry in the expat community, much of it natural and unavoidable but much that could easily be resolved if the UK Government would make it a priority to state its objectives and commence talks with the Spanish administration.

Spain has at least one million British citizens either living permanently in Spain or residing here for many months each year in their holiday homes. This represents a very large number of British citizens who need reassurance and deserve priority action by Government to secure a suitable status similar in effect to that of EU citizens.

The investment in Spain by the British and the continuing annual contribution made by British citizens to the Spanish economy cannot be understated in its importance to Spain.

We only have to consider the spending value to Spain of the 300,000 officially registered British residents of Spain, most of whom are retired and spending their pensions in Spain. Pensions which are paid from UK state resources or private schemes based on investments in the UK. In most cases these pensions are exempt from income tax in the UK.

Bearing in mind that there the real number of Brits in Spain are probably twice or even three times the official figure then I can easily calculate that British citizens contribute between 10 and 20 billion Euros to Spanish GDP. The Spanish income tax take alone on British citizens is a serious amount of money. Finally, I have read elsewhere the UK pays around 200 million each year to the Spanish national health system.

From a business perspective, there are numerous provisions in tax and other law that give tax breaks and make it generally easier for the UK to invest in Spain and vice-versa. Tax treaties fall outside of EU law and so can be agreed bilaterally between the two countries without EU interference.

“Leaving the EU will enable the UK to determine its own fisheries policy. Currently 75% of the 4,000+ fishing vessels in UK waters are Spanish. Each fishing vessel implies direct and indirect employment of 100 persons. The contribution to the Spanish economy and employment of fishing is undoubtedly very considerable.

This is substantial leverage indeed that should enable the UK Government to secure a fair deal for its citizens in Spain and for Gibraltar too. Spanish politicians should take careful note of the fisheries issue before they express jingoistic sentiments about forcing Gibraltar to accede to Spanish demands.”

In short, resolving the situation of British citizens and businesses in Spain should be treated as a priority by the UK Government.

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