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BREXIT

More than 200,000 Brits in Spain haven’t exchanged residency documents

A new study by Spain's Immigration Observatory has revealed that more than half of UK nationals living in Spain are yet to exchange their EU green residency documents for Withdrawal Agreement TIEs following Brexit.

Published: 19 September 2023 13:59 CEST
More than 200,000 Brits in Spain haven't exchanged residency documents
Ninety-nine percent of Brits with an old EU green certificate who applied for a TIE have successfully obtained it without any issue. (Photo by Olivier HOSLET / POOL / AFP)

A new study by Spain’s immigration observatory has revealed just how many Brits are yet to exchange their residency documents following Brexit.

The figures from July 2020 to June 2023 show that 159,604 UK nationals successfully exchanged their old residency documents for a TIE, the card that enshrines their residency rights as part of the Brexit Withdrawal Agreement.

This means over half of the total number of Britons in Spain – 211,274 people to be exact – have not exchanged their old EU residency residency certificate for the TIE.

According to immigration observatory data, as of December 31st 2022 there were 412,040 Britons living in Spain.

That is 4,412 more than the previous year and represents a 1 percent rise. It also includes new UK arrivals who don’t enjoy Withdrawal Agreement (WA) rights and apply like any other non-EU candidate.

Though UK nationals legally residing in Spain before the Brexit deadline are within their rights to keep their old EU green residency certificate (Certificado de Registro de Ciudadano de la Unión), both the UK and Spanish governments have for some time strongly recommended that they exchange it for the non-EU foreigner identity card, known as the TIE (Tarjeta de Identidad de Extranjero).

READ ALSO: BREXIT: How Brits in Spain can exchange a green residency document for a TIE

This card states Acuerdo Retirada UE (EU Withdrawal Agreement) and grants UK nationals who can prove they were in Spain before Brexit the same residency rights they had prior to the UK’s exit from the EU.

Only one percent of UK nationals with an EU certificado de registro who have applied to exchange it for a TIE have either had their application filed or rejected, 828 people in total. 

Fifteen percent of UK nationals in Spain who were not in possession of a green certificate but applied for a Withdrawal Agreement TIE have had their application archived or denied, 8,924 in total. However, 49,184 (85 percent) of these applicants have successfully obtained their WA TIE.

In their case, showing proof that they lived in Spain prior to the Brexit deadline has included showing payroll slips, social security registration, rental contracts and padrón town hall registration. 

Slow down in applications

Interestingly, the data also shows that after an initial surge in exchanges in the second half of 2020 when the WA TIE first became available to UK nationals, the number of Brits turning in their old residency certificates to get TIE cards has slowed down significantly since then.

As shown in the below graph from the report, after another slight peak in applications in mid-2021, TIE requests have fallen since then and since 2022 generally flatlined.

Graph by Immigration Observatory showing the monthly rate of residency document exchanges by Britons and their family members in Spain since the Withdrawal Agreement TIE first became available in July 2020.

That first period (from July to December 2020) also saw a significant number of residency authorisations granted to UK citizens who did not have the previous EU registration certificate, with a total of 32,730.

In the month of December 2020 alone, 12,269 authorisations of this type were granted, which represents 58 percent of the total number granted in that month.

Who are the Brits in Spain and where do they live?

The report also included some interesting demographic information on the types of Brits living in Spain and exchanging their residency documents.

Of the 218,540 UK nationals with a TIE issued between July 2020 to June 2023, those aged 65 and over and aged between 50 to 64 made up 34 percent and 30 percent of the total respectively.

The average age of UK nationals living in Spain is 55 years old.

Children represented only 7 percent of the total.

51 percent of TIE holders are men (110,930) and 49 percent (107,610) are women. However, in the 65 and over group 52 percent of TIE holders are men.

The 18-34 age group is more female with 52 percent of British TIE holders being women.

Staggeringly, over half (51 percent) of Britons who have exchanged their residency documents are concentrated in just three Spanish provinces: Alicante (55,028 people; 25 percent of the total), Málaga (39,522 people; 18 percent) and the Balearic Islands (16,577 people; 8 percent).

READ ALSO: BREXIT: Why UK and Spain now strongly recommend exchanging green residency document for TIE

Is it necessary to exchange my documents?

Technically speaking it isn’t as the exchange remains optional. However, both the UK and Spanish governments have strongly recommended that UK nationals residing in Spain with the old green EU residency certificate should exchange it for a TIE as soon as possible.

This is not only because the TIE enshrines the rights of UK nationals abroad under the Brexit Withdrawal Agreement, but also due to the fact that having a TIE can make many bureaucratic processes in Spain much simpler, as well as alleviating any potential travel friction on borders when travelling to and from Spain.

The TIE also has a photo on it, something the old green EU certificate did not, and it is far more durable than the flimsy paper certificates. It does have to be renewed, however, whereas the green certificate doesn’t have an expiry date.

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PENSIONS

What Brits should know about SIPP and QROPS pensions if moving to Spain

This Q&A offers some key information on SIPP and QROPS pension plans for British pensioners thinking of retiring in Spain, to help them decide which option is better for them.

Published: 9 May 2024 09:39 CEST
What Brits should know about SIPP and QROPS pensions if moving to Spain

Q: What are SIPPs?

A: SIPP stands for Self-Invested Personal Pension and is a UK-based pension plan. If you open an international SIPP then you can draw from this while you’re living in Spain.

Q: What is QROPS?

A: QROPS stands for Qualifying Recognised Overseas Pension Scheme. It allows you to transfer your UK pension out of the country. They are outside the UK tax regime, but must be inside the European Economic Area (EEA) if you want to avoid charges from HMRC. They also need to have similar rules and regulations to a UK-registered pension plan. Many QROPs from those wishing to retire to somewhere in Europe are transferred to Malta. As there is a dual tax treaty between Spain and Malta you will not be subject to Maltese tax when you draw your pension from there.

Q: What do I need to consider when opening a SIPP?

A: If you choose to open a SIPP, as it is self-invested, you will be responsible for managing it and making all the investment decisions. It is therefore best for those who already have some knowledge of investing or those who have the time and who are willing to put the work in to learn. It does, however, mean that you also have greater control and flexibility over your finances. You can choose to have the SIPP managed by a professional advisor, but of course this is an extra expense. Your SIPP could also be potentially subject to UK tax laws. 

Q: What do I need to consider when opening QROPs?

A: This is best for those wishing to cut all ties with the UK and permanently retire to Spain for the rest of their lives. You could lose UK domicile if you choose to do this and don’t have any other assets there, but it could mean you could also avoid UK inheritance tax. It’s also ideal if you wish your family also live outside of the UK

Q: I intend to return to live in the UK at some point in the future, which is best for me?

A: As SIPPs are UK-based, if you plan on returning there to live at some point during your retirement, that option is best. If you have QROPS, you could be subject to a large tax payment if you want to transfer it back to the UK.

READ ALSO: Six factors British people need to consider before retiring to Spain

Q: Which option will be cheaper for me?

A: SIPPs are generally cheaper than QROPs as you are managing it and investing yourself. If you choose someone else to manage it for you, however, this may not be the case.

Q: Will my SIPP be subject to tax in Spain?

A: Yes, if you are resident in Spain then you must follow Spanish tax regulations meaning that any withdrawals from SIPPs will be subject to income tax here. Pensions in Spain are subject to progressive tax rates ranging from 19 to 47 percent.  While SIPPs are also subject to UK tax rules, due to the double tax treaty between Spain and UK, you will not be taxed twice.

Q: Will my QROPS my subject to tax in Spain?

A: Yes, again if you’re resident in Spain you will be taxed on pension income. You must report income from a QROPS on your annual tax return. If you’re already a Spanish tax resident when you move your pension, it’s important to be aware that you’ll pay Spanish income tax on the whole value of the fund, therefore it’s much better to move it beforehand and then make your permanent move to Spain. 

Q: I want my pension to be paid in Euros to avoid exchange fees, which option will be best for me?

A: If you want to be paid in Euros, then QROPS will be the best as you will have completely transferred it out of the UK and into the EEA. This means that when you draw your pension, it will be paid out to you directly in Euros.

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