JollyScot's Journey Starts

[chenda]

@dara - Barcelona is one of Spain's most expensive cities, and Manchester one of the UK's cheapest, so I would expect the COL difference to be much larger in many cases, depending on the comparables.

I'm assuming the 'European ISA' was referring to was this:

https://www.finance-spain.com/SpanishCo ... Bonds.html

It's really nothing like an ISA.

One more problem but that's not specific to Spain is the money one has saved in ISAs that are tax sheltered in the UK would be taxed in other countries I believe.

Yes that is my understanding too. But Spain is a great place so I wouldn't advocate tax-led decisions when choosing somewhere to live.

[JollyScot]

Knock yourself with writing here I don't have any great attachement as to what is in the journal. Go off on a tangent if you find it interesting/helps in some way.

As for the costs of UK vs Spain. I am not sure the major cities are actually cheaper. We were recently in Madrid for a few days as part of our trip to visit wifes family and it is very expensive now. An additional one is that the food in Spain, I think, is of a higher quality than the UK's so it might not be a like for like comparison there either.

We had a similar tax differential when we lived in France. The taxes due for a early retiree relative to what is done in the UK is significantly higher. This is mainly due to threshold difference, minimum dividend tax amounts and also lack on an ISA. Every country will have a different pro and con. UK with ISA's and low general costs once the main house is paid off means you can pretty much stay tax free after a few years. It is a very nice place to stay though. Some of the smaller towns in the south we liked. I also like Madrid, but wouldn't move life again for something like that.

Summer in UK and winter travelling is more likely outcome for us.

The Spanish passport for my wife would be to open up Europe to us if we were so inclined again. Our son would get a Spanish passport too and come 18 will need to decide then if he wants to keep it or the UK passport. I would need to give up the UK passport to get the Spanish passport so it is not much use to me.

As for some people letting you keep both, maybe, the visa, passport, government systems can very much vary depending on who you get looking at it. My wife has found this when we did the France paperwork, UK paperwork and now her Spanish paperwork.

[guitarplayer]

People on the forum are a varied crowd hence these sorts of tactics will inevitably vary and also there will often be no across the board consensus on these. I resort to following journals and trying to see how trajectories align. For example, with @JollyScot I know that we have some commonalities in terms of spouse's place of origin and that we re both UK based; also earlier (in this journal I think) spoke about the trickiness of getting Spanish passport and then needing to verbally renounce UK nationality (even though in practice, it would still be a valid nationality in the eyes of the world outside Spain). So the comment about dealing with Spain using South American passport with the view of DW hypothetically applying for an EU (Spanish) passport down the road was in this context.

But this is hypothetical as at the moment we are happily based in the UK. Though it is becoming more of a possibility as DW works for a major Spanish company and will move there for work for 1/4 to 1/3 of this year.

In relation to building FI in Spain, whilst doing it from scratch is maybe not the smartest (I did the same search for FIRE blogs based in Spain @dara and found none, though my Spanish is poor), moving to Spain when already comfortable with money can be an adventure, as others mentioned there is more to it than money alone.

Also, I am trying to use proportionate response regarding money - either by intelligent design or by natural endowment. This is another way of saying that I personally struggle to aim for being a high earning and also having a lot of savings We as a household thought are strong in low outgoings. And for this sort of lifestyle, Spain might be good.

Finally, the Spanish passport would be really a nice-to-have and an insurance for DW, since we as a household already hold one EU passport. But I imagine now if DW wants to apply for a random job in the EU, she would have to do some explaining along the lines of 'I have the right to work at your company based on the freedom of movement of family members of EU citizens' or something to this effect.

[JollyScot]

So if you have one passport then you can technically settle anywhere under EU rules. We did that in France. Different countries have varying degrees of annoying paperwork however.

Typically you need some kind of income (say renting your soon to be paid flat) or sufficient assets set aside. The levels are usually comparatively low too.

It is easier if both have an EU passport but not strictly necessary. If we were to do th move again, then think we would pick Portugal.

[guitarplayer]

Yes, and I always found if hilarious that anywhere is easier than one's country of origin (which you will be well aware of @JollyScot). For example, before brexit my wife had a status of a family member of an EU national in the UK and this now concludes with both her and I getting the UK citizenship next month after a fairly straightforward process. Basically sticking around for the number of years required, doing a language test and the life in the UK test and filling out an application form. This would have been more difficult had we lived in my country of origin and wife attempting to get that citizenship. My understanding is that for UK citizens' partners the process is more arduous, too.

[JollyScot]

Pretty much the UK system treats UK citizens with a foreign spouse like garbage. I think the total cost now for everything is up to 12k.

Based one the net migration numbers, which is what it is supposedly about. Spouses accounted for about 30,000 out of the 700,000 net migration figure. Or 60,000 out of the 1,300,000 that came to UK.

So not the issue. However it is a lost cause getting people to actually care. Citizens will happily destroy the family lives of people in their country to sound tough. When they have no idea of the actual reality of going through it is like. The experience has permanently soured my view of systems, democracy and the general trust that a society would do the right thing.

So we are clear I don’t think people should get given the level of free stuff they do. My view extends equally to people here as well as those who come from abroad. I now longer believe I am a “good” person by supporting it.

So take advantage and figure out the way to set yourselves up as best as possible. Many backups would be advisable if you are a multi citizen family. As winds can change and democracy will smoosh you under its feet because that’s what the box says to do.

[chenda]

International marriage is a beautiful thing which should be encouraged. Lets bring the world together in the spirit of peace and love.

[dara]

@chenda

The second benefit is called 'Proportional tax relief'. When you come to take withdrawals from your policy the authority in Spain will only tax the growth element of that withdrawal. For example - You invest £500,000. After some years it grows to £750,000 (two thirds original capital, one third growth). You then withdraw £100,000. Only one third of this taxable so only £33,333 subject to tax.

19% for the first EUR 6,000
21% for the following EUR 6,000 to EUR 50,000
23% for the following EUR 50,000 to EUR 200,000
27% for the following EUR 200,000 to EUR 300,000
28% for any amounts over EUR 300,000

Haha, that really has nothing to do with an ISA.

Yes that is my understanding too. But Spain is a great place so I wouldn't advocate tax-led decisions when choosing somewhere to live.

I'm not saying that should be the main driver but one should consider it still and most people don't because they don't have substantial savings. Especially if you are still in the accumulation stage, in a country that taxes your savings to death getting to FIRE is like playing the game on hard mode. The weather (except Madrid) and the food are great, I agree. It's way too liberal for my taste, so I wouldn't move their myself if I had kids though.

@guitarplayer @JollyScot
Better not bring up immigration paperwork, I sometimes wake up in the middle of the night drenched in sweat just thinking of that (slight exaggeration). It's one of the reasons we left my home country as basically my wife was not allowed to work there (not entirely true but they made it complicated enough not be worth pursuing it).

So if you have one passport then you can technically settle anywhere under EU rules. We did that in France. Different countries have varying degrees of annoying paperwork however.

Typically you need some kind of income (say renting your soon to be paid flat) or sufficient assets set aside. The levels are usually comparatively low too.

It is easier if both have an EU passport but not strictly necessary. If we were to do th move again, then think we would pick Portugal.

I believe you don't even strictly need an income as it would go against the right to freedom of movement but you need local health insurance and of course do all the paperwork.