Understanding the complex tax systems accompanying this decision is crucial.
Retirement is an exciting phase of life, especially if you’re considering spending it in Europe. With its rich history, diverse cultures, and comparatively low cost of living, Europe has become a popular retirement destination. However, understanding the complex tax systems that accompany this decision is crucial. This article highlights key retirement considerations in Spain, Portugal, and France and provides insights into minimising tax exposure.
Spain: A Retirement Haven with Tax Considerations
Spain offers an attractive cost of living but has a high potential income and capital gains tax of up to 47%. However, by restructuring your retirement wealth within a Spanish Compliant Bond, you can benefit from ‘gross roll-up,’ meaning you’re only taxed on investment gains as and when you draw an income from your portfolio. This approach leaves more capital invested longer and attracts lower tax rates of around 28%.
Portugal: Golden Opportunities Amidst High Taxes
Portugal’s Golden Visa scheme was an excellent opportunity for tax-efficient relocation. However, the benefits have been gradually eroded. Despite this, Portugal remains a popular retirement destination, though it’s essential to be aware of its relatively high tax jurisdiction, with higher rates going up to 48-53%. Leveraging a Portuguese-compliant bond could reduce your ongoing capital gains tax exposure to less than half the standard rate.
France: Balancing High Capital Gains Tax with Assurance Vie
France levies a capital gains tax rate of 30%, one of the highest in Europe. However, a France Assurance Vie contract can offer reduced tax rates and gross roll-up benefits. More importantly, it acts as a protector against French inheritance and legacy rules, providing additional allowances against potential inheritance tax charges and enabling you to leave 100% of your wealth to your spouse upon death.
Prioritise Wealth Preservation
When planning for retirement, focusing on wealth preservation by managing your current and future tax position is essential. A consolidated portfolio and tax management approach can ensure that your returns are not eroded by taxation.
Retiring in Europe and want to discuss your plans further?
If you’re considering retiring in Europe and want to discuss your plans further, our team at GSB Capital is here to help. Please note that while we provide guidance, we are not tax advisers. Always seek professional advice before executing any decisions, as rates and legislation mentioned within this article are subject to change.
THIS ARTICLE DOES NOT CONSTITUTE TAX OR LEGAL ADVICE AND SHOULD NOT BE RELIED UPON AS SUCH.
THE VALUE OF YOUR INVESTMENTS CAN GO DOWN AS WELL AS UP AND YOU MAY GET BACK LESS THAN YOU INVESTED.
THE TAX TREATMENT IS DEPENDENT ON INDIVIDUAL CIRCUMSTANCES AND MAY BE SUBJECT TO CHANGE IN FUTURE. FOR GUIDANCE, SEEK PROFESSIONAL ADVICE.