As wealth becomes more international, cross-border legal and tax planning is increasingly important for family offices, entrepreneurs and private clients with ties to both the UK and Spain. What matters is not simply where assets are held, but how ownership, residence and succession interact across two legal and tax systems that do not always align.
For clients with lives, businesses or assets across both countries, the challenge is making sure succession, tax, reporting and long-term planning work coherently in both jurisdictions. That is becoming more important as UK inheritance tax now applies by reference to long-term UK residence rather than domicile from 6 April 2025, while Spanish rules continue to depend heavily on regional and residency-based distinctions.
These are five key issues to review now.
Succession and Inheritance Tax Must Be Planned Across Both Jurisdictions
Succession planning between the UK and Spain must account for two very different systems. In the UK, inheritance tax is usually paid from the estate, whereas in Spain beneficiaries often pay tax personally. UK rules have also shifted to a residence-based inheritance tax system from 6 April 2025, replacing domicile for these purposes, while Spanish inheritance tax can apply to worldwide estates and varies by region.
For internationally mobile families, the practical implications can be significant, particularly where children, second homes or business interests are spread across more than one jurisdiction.
As inheritance tax is not covered by the UK-Spain double taxation treaty, coordinated planning is essential to reduce the risk of double taxation.
"As inheritance tax is not covered by the UK-Spain double taxation treaty, coordinated planning is essential to reduce the risk of double taxation."
Mandatory Reporting of Foreign Assets (Modelo 720)
Spanish tax residents may need to report foreign assets through Modelo 720 if holdings in a reporting category exceed €50,000. Although it is an information return rather than a tax payment, failing to file can still have serious consequences.
UK-based assets therefore need to be reviewed from a Spanish compliance perspective as well as a UK one. In practice, this is often overlooked until a filing deadline is close, which can create avoidable pressure and cost for families with complex asset structures.
Bringing reporting into the wider planning conversation early can help prevent administrative problems from becoming strategic ones.
Understanding Your Tax Residency Status
Tax residency is central to cross-border planning because it determines how income, assets and reporting obligations are treated. In Spain, residency usually arises after more than 183 days in the country or where a person's main centre of interests is located there.
Spanish residents are taxed on worldwide income and assets, and although the UK-Spain double taxation agreement helps allocate taxing rights, it does not remove the need to establish residency clearly from the outset.
Taxation of UK Pensions and Investments
UK pensions and investments can be taxed very differently once Spanish residency applies. ISAs do not keep their UK tax-free status in Spain, and pensions may also be taxed differently under the UK-Spain treaty, with private pensions generally taxed in Spain and government service pensions usually taxed in the UK.
Planned UK changes to inheritance tax treatment of pensions from April 2027 also make review increasingly important. Structures that appeared suitable before a move to Spain may no longer deliver the same tax efficiency once Spanish residence and reporting obligations are taken into account.
In many cases, assets that once sat comfortably within a UK planning framework need to be reconsidered altogether once a family's centre of gravity shifts abroad.
Spanish Wealth Tax and Property Taxation
Spanish wealth tax and property taxation add further complexity. Residents may be taxed on worldwide assets and non-residents on Spanish assets, with regional variations affecting the outcome.
Owning or selling property across borders can also create overlapping capital gains and income tax issues, making specialist advice important for anyone with significant UK-Spain wealth structures.
Summary
Taken together, these issues show that internationally mobile wealth requires joined-up planning, not separate advice in separate countries.
The sooner clients review succession, tax residency, reporting obligations, pensions and property structures across both the UK and Spain, the better placed they will be to protect wealth, reduce risk and avoid costly surprises.
Early advice can also create more options, particularly where families are restructuring ownership, relocating or planning for the next generation. For those with significant cross-border interests, careful coordination at the right stage can make a substantial difference to both efficiency and long-term peace of mind.
If you or your clients have personal, business or family connections across the UK and Spain, specialist advice at an early stage can help ensure that wealth is structured with clarity, efficiency and the next generation in mind. Please contact Yolanda Perez Berges at The Burnside Partnership at yolanda.perez@theburnsidepartnership.com for more information about our firm and how we can help.
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