Escaping the proposed UK ‘exit tax’

Time to buy a property in the Costa del Sol?

Tired of being penalised for all your hard work? Concerned about Labour’s upcoming Budget, and the impact it might have on your financial future?

The solution is simple.

Move to Spain.

The government are cracking down on High Net Worth (HNW) and Ultra-High Net Worth (UHNW) individuals in the UK, with various proposed tax increases – including, most notably, the potential introduction of a capital gains ‘exit tax’.

As a result, it’s estimated that more than 10,000 business owners and entrepreneurs could be about to relocate overseas – and Spain is set to be one of the most popular destinations.

Here we take a closer look at why it may be a good idea for you to follow the crowd.

Exit the UK ahead of the controversial ‘exit tax’, find your tax haven in the sunshine, and start looking for your trophy property in the Costa del Sol today.

Potential mass exodus of HNW individuals

Ahead of the October Budget, Chancellor Rachel Reeves has been urged to impose an ‘exit tax’ on wealthy investors who are relocating and investing outside of the UK.

The idea was suggested by left-leaning think tank, Resolution Foundation, who stated that capital gains tax is ‘ripe for reform, with rates unjustifiably low compared to those on other forms of income’. And presumably, the objective is to deter HNW individuals from leaving the country – but it seems to be having the opposite effect.

Described as a ‘deeply flawed’ plan, it’s believed that wealthy families will try to exit the UK before having to pay the ‘exit tax’ – or they simply won’t come to the UK to begin with. Plus, as such wealthy families only account for 1% of the population, the overall take is likely to be small, meaning it won’t do much to fill the ‘black hole’ in the nation’s finances.

Coupled with broader economic uncertainty, this proposed new tax is creating a general feeling of being ‘unwelcome’ – so it’s no surprise that people are keen to move elsewhere. Especially when there are other countries nearby, such as Spain, which offer a much more favourable tax regime, as well as the prospect of a better quality of life.

A welcoming destination for the wealthy

If you’re a HNW or UHNW individual residing in the UK, and looking for a way to safeguard your financial future, Spain fits the bill perfectly – particularly the Costa del Sol. Here’s why:

• A tax-friendly destination

Spain is a true tax haven for expats.

For a start, thanks to the Beckham Law, foreign residents can enjoy significant tax relief for up to 5 years (compared to 4 in the UK). This may not be indefinite, but it offers some much-needed stability in today’s volatile environment – something that’s very hard to find anywhere else.

Aside from the Beckham Law, wealth tax has also now been abolished.

This is a real game changer, allowing non-residents with worldwide assets above €700,000 to buy a home and move permanently to the area, without having to face a hefty annual charge.

Other tax advantages include virtually no inheritance or gift tax, and investment income tax rates and capital gains tax rates set at 19-26%. Plus, private pensions are treated as an investment income, which means in some cases, tax can be as low as 2.5%.

• Luxury lifestyle

In recent years, the Costa del Sol has solidified itself as a premier destination.

Marbella, in particular, was ranked by Forbes as the no.1 luxury destination in 2024 – renowned for its 5* leisure activities and facilities and the fantastic quality of life it can offer.

Think VIP bars, fine dining restaurants and trendy beach clubs. Designer boutiques, luxury spas, world-class golf courses. Plus rich culture, stunning scenery and a warm and welcoming atmosphere. Add in 320+ days of sunshine per year, and it’s little wonder that it’s so popular.

In fact, according to the 2023 InterNations Expat Insider Survey, 87% of expats living in Spain expressed contentment with their lives – far exceeding the global average of 72%.

• Proximity to the UK

Spain may be a far cry from the UK in terms of its tax regimes – but in terms of distance, it’s pretty close by. Which makes it perfect for anyone looking to make a smooth transition.

Plus, it’s a convenient and well-connected base for business owners and entrepreneurs.

Málaga Airport has direct links with the US and many other key global business hotspots. And in the recent Executive Nomad Index by Savills Research, Málaga came third in the line-up of top destinations for executive relocations – outranked only by Dubai and Abu Dhabi.

• Rising real estate values

A lack of supply, coupled with a growing demand for luxury homes, is certainly being felt across Spain’s real estate market – especially in Marbella and the rest of the Costa del Sol.

Property prices have hit a record high.

According to TINSA, at the end of the first quarter of 2024, the average square metre price in the Costa del Sol stood at €2,298, marking a 9.3% increase compared to the same period last year. This continues the same upward trend that has been seen over the last 10 years, and is a sure sign that investing in this area is a fantastic opportunity for capital growth.

• Visa options

For HNW and UHNW individuals, several visa options may be suitable.

Whilst plans to abolish the golden visa were discussed early this year, this has yet to happen – which means it’s still a viable option for expats. Essentially, this allows non-EU citizens to obtain residency in Spain, simply by purchasing a property worth at least €500,000.

Alternative options also include the non-lucrative visa, which is particularly beneficial for retirees, as well as the self-employment visa and digital nomad visa.

Further information on all of these can be found at visaguide.world and schengenvisainfor.com.

Ready to start planning your exit from the UK?

Perhaps this is the encouragement you need to finally take the leap?

If you’d be affected by the government’s proposed ‘exit tax’, and currently have the ability to move your family and business to a more tax-friendly and hospitable destination, now could be the ideal time to pack your suitcase and relocate overseas.

Spain is here waiting, ready to welcome you with open arms.

With its favourable tax regimes, luxury lifestyle benefits and soaring property prices, the Costa del Sol presents a very compelling option for HNW families who are eager to exit the UK – and when it comes to finding a new home, we can help.

Here at Bromley Estates, as leading real estate agency in the Costa del Sol, we have a comprehensive portfolio of properties to choose from – with something to suit all needs and preferences. And thanks to our unparalleled knowledge of the real estate market, including the taxes and costs associated with moving to the region, we can ensure the purchase process is quick and hassle-free, regardless of where you’re currently located.

To take the first step towards your idyllic tax haven on the Sunshine Coast, simply give us a call on +34 952 939 460 (+44 208 068 7606). Or if you have any questions – about the current tax regimes in Spain and how they could benefit you, or the properties for sale in the Costa del Sol – please don’t hesitate to send an email to in**@br******************.com .

One of our experts will be in touch.