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As member states of the OECD and NATO, and formerly of the EU, the UK and Spain have long-standing bilateral trade relations, particularly in the commercial, development and security sectors. Additionally, both countries are popular tourist destinations, with millions of tourists flowing between the two each year. Although for most of their recent history, trade relations between the two have been relatively stable, there is a degree of uncertainty regarding this as a result of Brexit. For this reason, cross-border currency flows could be subject to significant changes in the coming months and years.
Given how deeply linked the two countries are, for both economic and social reasons, there are high volumes of cross-border money transfers between Spain and the UK. As a member of the Eurozone, the official currency of Spain is the euro, following its adoption of the currency in 2002. Although it was a member of the European Union at the time, the UK opted not to adopt the EUR as its official currency, which made it an outlier among the largest EU member states.
As members of the EU, the trading relationship between Spain and the UK ran incredibly deep and covered a number of different sectors, including textiles, various types of FMCGs, and financial services. Although this is due to change with Brexit, it is expected that we will continue to see significant trading relationships between the two countries regardless of what sort of trading relationship is eventually settled.
Beyond the economic dimensions of their relationship, Spain and the UK have deep cultural and social links. Both countries are incredibly popular tourist destinations, with millions of citizens crossing the border each year. Spain, in particular, is a popular destination for British holidaymakers, and is also home to hundreds of thousands of retirees who have settled there. For this reason, cross-border money transfers between the two countries experience an incredibly high volume.
Both the UK and Spain have incredibly advanced banking in place, with both countries being global leaders in the financial services space. Given the number of citizens living and working in each other’s countries, there are a number of UK banks that operate local branches in Spain and offer retail banking services. This is also true of certain Spanish banks, though they are more likely to be found in and around the London area. Popular UK banks with branches in Spain include Santander and HSBC. There are not typically too many immediate obstacles to cross-border money transfers between the countries.
Before it adopted the euro as its official currency in 2002, the former official currency of Spain was the ‘peseta’. The peseta had been in use since the mid-1700s and was also the de-facto official currency used in Andorra.
In 2019, about 188,000 Spanish-born people were living in the UK, while as of 2020, around 366,000 British nationals held residency documents in Spain. Spain is also an incredibly popular destination for British tourists.
While prior to Brexit, Spanish and British citizens were free to move to either country at will, there are now restrictions in place that require anyone looking to relocate to apply for a visa.
In Spain, UK citizens are now subject to the same requirements as other non-EU citizens, such as those from the US or Canada. Those planning to move to Spain must first apply for an appropriate visa, after which they may apply for additional residency documents.
Meanwhile, in the UK, Spanish citizens must apply for a visa under the UK's new points-based immigration system, which prioritised skilled workers and those in shortage occupations.
The UK’s banking system is advanced and sophisticated, just like the banking system in Spain. You may find branches of Spanish banks in urban areas, such as the British branch of BBVA. If you already have a linked account with a transnational bank, you will not have to open a new account in the UK. In order to open the account, you will be required to provide proof of a local address, as well as proof of income and or employment in the UK.
Having a bank account during your stay in the UK will help to facilitate direct-to-bank currency exchange transactions between Spain and the UK.
The tax year in the UK spans the period between 6 April and 5 April of the following year. By contrast, like many other countries, Spain’s tax year is from 1 January to 31 December.
The UK tax system is quite complex and may require expert assistance, particularly for those with substantial earnings. If a Spanish national resides in the UK for 183 days or more during a 12-month period, they will be required to pay taxes on any income earned while in the UK, whether from profits, salaries, pensions or royalties earned worldwide. Those who reside in the UK for less than 183 days during a 12-month period will only face taxation on income earned within the borders of the UK.
There may be changes to make the system more complex now that the UK has left the EU.Spain is a primary exporter of lettuce, iron blocks, citrus and other fruits, prepared pigments, sea vessels, pure olive oil, melons, pitted fruits and cabbages. Its top five exports are motor vehicle parts, cars, packaged medication, delivery trucks and refined petroleum. The UK receives approximately 7% of Spain’s exports.
The UK is Spain’s ninth-largest trading partner at the moment, but with trade falling due to Brexit, this could be impacted over the next few years.
The UK is a popular destination for tertiary studies. Spanish nationals, as members of the EU, previously did not need a student visa to study at a university in the UK. However, following Brexit, Spanish nationals will now need to apply for a Student visa once they have been offered a place on a course, and may face higher fees than British students.
The cost of living is also high relative to that in Spain, and there are restrictions on what work students are able to undertake outside of their studies.
Following Brexit, transporting pet dogs, cats and ferrets between the UK and Spain is permitted with a valid EU-issued pet passport and proof of microchipping and vaccinations. UK-issued pet passports will not be permitted.
Similar documentation is required for other animals. Check the Travel Abroad section of the UK government website for more information.
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