There are over 108,000 pensioners in Spain alone out of the official British population of around 300,000. Do you want to join them – either there or another European destination?
Many people aspire to retire abroad, but for most, it will remain a dream. Here’s our practical guide as to how to make it a reality.
- Pensions office
Contact the International Pension Centre and make them aware of your move. While the impact of Brexit is yet to be fully realised, there has been no change to the rights and status of EU nationals in the UK, and UK nationals in the EU, as a result of the referendum. Therefore, you can still claim your State Pension abroad if you’ve paid enough UK National Insurance contributions to qualify.
To make a claim, you’ll need to be within 4 months of your State Pension age to claim, and you can do so by either:
Next, you’ll need to tell HM Revenue and Customs that you’re moving or retiring abroad, and ensure you’ve paid the right tax.
The tax year runs from 6th April to 5th April the following year. Fill in a P85 and send it to HMRC. Make sure to include parts 2 and 3 of your P45 form, which you will need to get from your employer. If you are self-employed, send a self-assessment tax return.
- Selling your property
Many people sell a property to fund the move to a new country, enabling the retirement lifestyle they demand and deserve. If you’re a British citizen, you won’t need to pay capital gains tax (CGT) if:
- The property was used primarily as your main home and not as a way of securing any profits.
- This property was your main home for the time you owned it (excluding the past three years).
- It was used by you and your family and no more than one lodger throughout the period of ownership.
- The total area of land that comes with the house does not exceed a total of 5,000 square metres (this is about the size of a standard football pitch) and includes the part of land on which the house is actually built.
- If you are married or in a civil partnership and not separated you are only entitled to have one residence between the two of you.
If you – or the property in question – do not meet these criteria, you will need to pay capital gains tax.
The rate was cut in the 2016 Budget, with basic-rate taxpayers paying CGT at 10%, and higher-rate taxpayers paying CGT at 20%.
Retiring abroad is a complex topic, but our financial planners have the expertise to make it simple. If you would like to arrange a meeting with a member of our experienced, professional and friendly team, contact us today on 01992 500261, or online.
This article is for information only and must not be considered as financial advice. We always recommend that you seek independent financial advice before making any financial decisions. Investments can go down as well as up and you may get back less than you invested.