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BREXIT

Gibraltar Brexit deal ‘close’ as Brits crossing into Spain use fake bookings

As Spain and the UK come 'very close' to signing an agreement on the post-Brexit status of Gibraltar, a report claims that 90 percent of hotel bookings shown by UK nationals and other non-EU travellers at The Rock's border with Spain are fraudulent.

Gibraltar Brexit deal 'close' as Brits crossing into Spain use fake bookings
Police sources told Andalusian daily Europa Sur that some of these fake bookings were made just moments before presenting their documents to Spanish border agents. (Photo by CRISTINA QUICLER / AFP)

Spain and the UK may finally be on the verge of signing a Gibraltar Brexit deal, seven years after the referendum and almost three years after the broader UK-EU deal was signed. The renewed optimism follows comments from Spain’s Foreign Minister Jose Manuel Albares that “we are very, very close” to finalising an agreement.

Albares met recently with the UK’s new Foreign Secretary David Cameron at a NATO meeting in Brussels and noted that the former Prime Minister’s surprise return to government has aided progress in negotiations: “Today we have made progress, because David Cameron has shown a willingness to reach an agreement.”

“I would sign a deal with Britain over Gibraltar tomorrow,” Albares told journalists, adding that both the UK and Spain “agree that we have to move forward as soon as possible.”

However, the foreign minister acknowledged that there are still some details yet to be worked out. If previous rounds of negotiations are anything to go by this, this will likely be the use of Gibraltar’s airport and the role of Spanish border guards.

The imminent Gibraltar deal comes as a time when it’s been reported in the Spanish press that many UK nationals have been using fake hotel bookings in order to try and bypass the rules and trick their way through border checks.

Spanish police estimate that as many as 90 percent of the hotel reservations presented by third-country nationals (not just Britons) at the border are fraudulently made in order to gain entry to Spain.

Police sources told Andalusian daily Europa Sur that some of these fake bookings were made just moments before presenting their documents to Spanish border agents.

Many hotel and apartment platforms allow reservations to be made without any deposit or cancellation fee, allowing UK nationals and other non-EU nationals to simply cancel their booking once they cross the border.

Since January 1st 2021, UK nationals, like any third-country national, have had to comply with the entry requirements set out in the Schengen Borders Code, including the need to justify the purpose of travel and conditions of their planned stay, as well as proving sufficient financial means to support themselves during their maximum 90 out of 180 days stay, and crucially proof of accommodation.

In practice, that means that many Britons living or visiting Gibraltar and who want to cross over into Spain for a few hours or days cannot do so as easily as they could when they were EU nationals before Brexit.

As UK and other non-EU nationals crossing the Gibraltar-Spain border on foot or by car cannot present a valid return flight ticket, the need to provide additional documentation such as proof of accommodation is even more important for border guards, as somewhat of a safeguard that these third-country nationals will abide by the Schengen rules.

READ ALSO: What Brits need to know before crossing the border from Gibraltar to Spain

This report about fraudulent bookings may explain why around 35 people, the majority of them UK nationals, were denied entry into Spain on November 14th when attempting to enter from Gibraltar, according to the Gibraltarian Government.

A week later, there were reports of long delays for vehicles crossing the border. Spanish authorities have stated that most were asked their reasons for travelling and denied entry because they couldn’t provide certain proof or documentation for their entry into Spain, such as hotel bookings or onward flights.

Despite Albares’ positivity in Brussels, few concrete details of the proposed deal have emerged, including what it will mean for the movement of UK nationals and other non-EU travellers at the Spain-Gibraltar border.

The Spanish Foreign Minister has spoken in generalities about a “shared prosperity zone” in order to avoid a hard border preventing the flow of people and goods, but revealed little else. Albares explained that “I think this deal… is better for everyone than the application of European legislation.”

The Spanish-Gibraltar border issue has been in limbo since the tiny territory was excluded from the UK-EU New Year’s Eve 2020 deal, and it has long been hoped that a bespoke border arrangement could be made rather than a strict enforcement of the Schengen rules.

Thousands of people cross the border everyday to work in Gibraltar, and many local Gibraltarians (Llanitos, as they are known) have business or familial ties in Spain.

However, despite the want on both sides of the border for fluid movement, for many Gibraltarians the idea of Spanish police on Gibraltarian soil as a red line in negotiations that speaks to issues of sovereignty but also history, and recalls painful memories of when Franco closed the border for 13 years from 1969-1982.

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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.

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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