As of the beginning of this year, the rules for British citizens changed with regards to how they spend time in Europe. Currently, should a British citizen wish to spend more than 90 days out of any 180-day period within the Schengen area, they will need to apply for a visa.
If you intend to stay for more than 12 months, you will need a residency permit which you can apply for from the relevant consulate. However, to secure a residency permit or visa you will need to show that you are financially independent and will not end up being a financial burden on the state.
Each country sets their own rules around the income requirements you need to meet, property ownership and medical cover. In countries such as France and Portugal you will need to show that you can match the minimum wage. Luckily this is fairly achievable for most, with France’s minimum wage at around 19,000 Euros a year and Portugal’s around 8,000 Euros.
Spain has slightly tougher requirements with people needing £23,578 per year and being able to show wealth in the form of cash or readily liquefiable assets such as investment accounts.
There are many things to consider if you are thinking about retiring in Europe such as the fact you will be liable for local tax and could lose tax benefits. ISAs will no longer grow tax free and taking a 25% pension commencement lump sum may be taxable.
As with everything, careful planning can help mitigate the potentially more punitive tax rules you may face. Planning early and planning well will make for a less stressful process and a more affluent life. If you are considering a retirement in Europe, speak to our tax team to understand your best options.
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