Following the United Kingdom´s decision to leave to the European Union on 23 June 2016, we are now approaching the (delayed) departure date of 31st October 2019. However, given a no-deal Brexit looks more likely than ever since the election of Boris Johnson, how will this affect the estimated 300,000 expatriates from Britain currently living in Spain? Read on to learn the current guarantees provided by both Governments and steps that you can take to mitigate the potential impact.
“Royal Decree Law 5/2019” explained
On March 1st, the Spanish Government published contingency measures that would apply in the event of a no-deal Brexit (this is the term for Britain leaving the European Union without a deal). It addressed the future residence rights of those currently residing in Spain and their access to healthcare/social security.
Residence and the right to work for UK nationals and their family members residing in Spain. The definition of “family members” is broad and generally includes those living with you too. This decree confirms that those “lawfully resident” in Spain (generally those here for at least three months) should ideally be accredited before the withdrawal date but alternative evidence may be accepted afterwards. For those resident at least five years, Article 5 RD Law 5/2019 allows a similar process to apply for a long-term residence permit. These rights apply to UK nationals in Gibraltar equally.
Please note, this decree is only valid for two months after a no-deal Brexit if the United Kingdom does not reciprocate. At present, reciprocation has already been agreed on healthcare and residency for EU nationals currently in the UK, so this scenario seems very unlikely.
How to apply for residency
There are several key steps that must be followed and explored to become a Spanish resident:
- Obtain a Numero de Identificacion de Extranejero (NIE number).
- Register with the Padrón Municipal.
- Register for and obtain the Certificado de Registro de Ciudadano de la Unión (also known as Certificado de Registro Comunitario).
- Obtain your Spanish health card (Tarjeta Sanitaria)
- Obtain your Spanish driving licence and exchange your UK one.
- Submit your Modelo 030 form to register as an individual with the Spanish tax office.
Additionally, one might apply for permanent residency or citizenship depending on their circumstances and desires.
It is likely that those already resident in period for a long period have already completed the above steps and are ready for a no-deal Brexit; however, we can ensure that you have fully complied with the requirements and ensure that the process is completed in a timely manner.
Even if you have not registered yet, the decree above ensures you will still be resident for twenty-one months after the departure date regardless of your current status. If registration appointments are currently unavailable, as the British Government guidance is reporting, then we suggest retaining proof of residence before Brexit (rental contract etc.) until a residence certificate has been obtained.
Once a residence certificate has been obtained, you will have until the end of 2020 to apply for a “foreigner identity card” (TIE) which would secure your right to remain after 2021, until you qualify for permanent residency after five years total. This application should be automatic if you are already legally resident and will protect your future rights.
Is Spanish citizenship an option?
After ten years of lawful residence you can apply for Spanish citizenship. However, under Spanish law you cannot hold dual citizenship with the United Kingdom, unless your nationality has been acquired through blood or birth, and this would require you to renounce your British nationality.
If you decide this is the option for you, then we suggest seeking advice as the process is up to eight months (there is no official timeframe) and requires filling in several forms translated into Spanish. Documents required include a copy of your TIE, proof of CEFR A2 Spanish, and completion of the Spanish cultural exam (prueba de conocimientos constitucionales y socioculturales) in addition to a payment of circa €100.
As such, we suggest seeking legal advice to guide the process and ensure that your application does not fail due to a bureaucratic requirement.
The double-taxation agreement between Spain and the United Kingdom will not change regardless of Brexit. This will ensure you only pay tax on your income in one country.
The potential impact of higher inheritance tax for non-residents from outside the EU/EEA has been ruled by the recent ECJ ruling declaring it discrimination and the benefits of a Spanish will can be found in our previous article.
Please note that to maintain your TIE you must be resident in Spain at least 183 days a year, unlike at present, and you will therefore be a full tax resident.
As a Spanish resident, you will be required to declare your global income and potentially pay tax on it in Spain too depending on the applicable treaty. This requires completion of Model 720, which is legally required and carries significant sanctions if not fully completed.
If you require detailed advice on the current tax system, we are specialists in tax and can provide advice as needed.
Spain´s decree has guaranteed healthcare for residents and visitors after Brexit until 31 December 2020. This will involve both Governments reimbursing each other under the pre-existing EHIC/S1 mechanism.
After this period, it is expected that expatriates in Spain will have become lawful residents and therefore can claim healthcare the same as any other resident who contributes to social security or has registered with their residency certificate.
As such, healthcare implications in the event of a no-deal Brexit will be minimal in most circumstances.
What if the current Brexit withdrawal agreement is accepted after a fourth vote?
If the withdrawal agreement passes through the UK Parliament then a transition period will last until 31 December 2020, during which all rights will be preserved and anyone who moves to Spain will be able to apply for residency under the no-deal steps above. Given the reassurances given above, the impact is likely to be identical to a no-deal Brexit for those already in Spain and anymore long-term negotiations would be dependent on the future talks between the EU and United Kingdom.