Blog

Why PE Status Matters for UK Businesses

If the Spanish tax authorities conclude that a PE exists, the company becomes liable for Spanish corporate tax on the portion of profits connected to the Spanish activity. This requires Spanish tax registration, maintaining Spanish compliant accounts for the PE and filing annual returns. The authorities expect a clear explanation of how much profit is attributed to Spain and the basis for that allocation. VAT, payroll and social security obligations may also arise wherever people are working from Spain or where local operations go beyond the most basic support functions.

Common Situations That Lead to PE Exposure

Many UK businesses unintentionally create PE risk. A frequent example is a Spanish based employee or manager working remotely from home while performing essential functions for the UK company. Over time, their home office can become the place where part of the business is effectively carried out. Other scenarios include the regular use of shared offices or warehouses in Spain, the presence of Spanish sales personnel who negotiate or close deals, long installation or project work, or fulfilment operations in Spain that involve value adding activity rather than simple storage. The growth of remote work has made PE analysis even more important, since the physical location of key staff can anchor business activity to Spain.

How Spain Attributes Profits to a PE

Once a PE is identified, Spain will look closely at what functions are carried out in Spain, what assets are used locally and what risks are managed there. This assessment determines the profit that must be taxed in Spain. Proper documentation, supported by a clear narrative of how the business operates, is essential to avoid challenges or adjustments by the Spanish authorities.

At Scornik Gerstein LLP we help UK companies understand whether their Spanish activities create a PE and how to manage or mitigate that exposure. Our work begins with mapping the company’s real presence in Spain, including the role of staff, agents and contractors, the use of premises and the way contracts are negotiated and approved. We then analyse whether these activities fall within the Spanish PE rules and advise clients on how to align their operations with their intended tax position. Where a PE exists or is likely, we handle all Spanish registrations, compliance processes and annual filings, assist with profit attribution and documentation, and review any related VAT and payroll requirements.

Our dual qualified UK and Spanish team provides integrated cross border support so that UK businesses can operate in Spain with clarity, confidence and full compliance.

You may qualify for Spanish nationality by option if:

• You were born to a Spanish father or mother, even if they later lost Spanish nationality.
• Your father or mother was originally Spanish and born in Spain, even if they later became British or a citizen of another nationality.
• You were adopted by a Spanish citizen before turning 18.
• You were under the parental authority of a Spanish national.

If your parent was born in Spain, you may be entitled to Spanish nationality - even now.

A Common Case: When a Parent Lost Spanish Nationality

Many people in the UK have mothers originally from Spain who lost their Spanish nationality upon marriage to a non-Spanish citizen.

Even in that case, you may still qualify for Spanish nationality under Article 20.1(b) of the Spanish Civil Code, because your mother was originally Spanish and born in Spain.

This is one of the most common and successful routes for descendants.

Can I Keep My British Nationality?

Yes - in practice, you can hold both nationalities.

While the Spanish authorities require a formal statement of “renunciation” of your current nationality, this is a procedural formality only. It does not cause you to lose your British citizenship, and you do not need to notify the UK authorities.

Travel and EU Rights as a Spanish Citizen

As an EU citizen, you can enter and move freely within the Schengen Area without a visa or the 90/180‑day limit, using a valid Spanish passport or national ID card. You also have the right to live, work, and study in other EU/EEA countries and Switzerland, subject to local registration rules for stays over 90 days. Note that Ireland is not part of Schengen.

If you hold dual British–Spanish nationality, use your Spanish passport or DNI when entering Schengen (including Spain) to be processed as an EU citizen.

Why Apply Now?

Applying for Spanish nationality requires careful legal preparation, and collecting all the necessary documents from both Spain and the UK can take considerable time. Spanish consulates in the UK are currently operating at full capacity, which may result in longer processing times.

Acting now gives you the best chance of a smooth and timely application. The earlier you start, the sooner your documents can be sourced, reviewed, and your nationality confirmed. Don’t wait; beginning the process today can save months of delay.

Our Spanish immigration legal team can guide you through the entire process - from assessing your eligibility to gathering your documents and submitting your application correctly to help ensure a successful outcome.

How Scornik Gerstein Can Help

We are an Anglo–Spanish law firm based in the UK, specialised in Spanish nationality and immigration law, with extensive experience assisting British residents of Spanish descent.

Our services include:

1. Eligibility assessment under Article 20 of the Spanish Civil Code.
2. Document collection and legalisation in Spain and the UK.
3. Application preparation and filing through the Spanish Consulate in London, Manchester, or Edinburgh.
4. Ongoing advice until your nationality is granted.

Reconnect with Your Spanish Roots

Even though the Law of Democratic Memory has ended, your connection to Spain may still open the door to Spanish citizenship.

If your father or mother was born in Spain, you could still qualify for Spanish nationality by option - and we’d be delighted to help you through the process.

Contact us today for a consultation and find out whether you’re eligible to claim your Spanish citizenship.

• It was legally carried out in the country where it took place
• Both parties had the legal capacity to marry
• The marriage followed the formalities required by that country

You will typically need your foreign marriage certificate, a certified translation, and sometimes an apostille.

We frequently assist clients in preparing and legalising foreign documents so they are accepted by the UK courts without delay.

“No-Fault Divorce” Applies Even If You Married Abroad

Since 2022, England & Wales operate a no-fault divorce system, meaning:

• You do not need to prove fault
• You do not have to disclose private details
• You simply confirm that the marriage has ended (irretrievably broken down)

This system applies regardless of where the marriage originally took place.

What About Finances, Property and Children?

This is where complexity increases.

Financial settlements across countries

UK courts can consider assets located anywhere, including:

• Property in Spain or other countries
• International bank accounts
• Overseas pensions
• Business interests

However, enforcing orders abroad may require additional steps.

Foreign property regimes

Countries such as Spain use systems such as:

• Gananciales (community of property)
• Separación de bienes (separation of assets)

These regimes may affect These may influence how assets are assessed - but UK courts may still apply their own principles.

Children

If children live in the UK, the UK courts will have jurisdiction and will typically handle:

• Residence
• Contact arrangements
• Parental responsibility

International relocation, travel permissions and child-abduction rules (Hague Convention) may also apply.

Why Divorcing in the UK Might Be Advantageous

Many clients choose to divorce in the UK because the system often offers:

• Broad judicial discretion
• Strong financial protection
• A simple online no-fault process
• For others, another jurisdiction may be more appropriate. Determining the correct forum is a strategic decision - and one we help couples evaluate carefully.

How Scornik Gerstein Can Help

We specialise in cross-border family law, and assist clients with:

• UK divorces for marriages celebrated abroad
• Translation and legalisation of foreign marriage certificates
• Financial settlements involving property or assets in Spain and other jurisdictions
• Cross-border property, bank accounts and businesses
• Navigating Spanish matrimonial regimes and enforcement
• Cross-border child arrangements and relocation matters
• Strategic advice on choosing the best jurisdiction for your circumstances

Whether you married in Spain, Latin America, the EU or elsewhere, our team ensures your UK divorce is managed smoothly and with full protection of your rights across countries.

Contact Scornik Gerstein

For expert guidance on international divorce and cross-border family law:

t: +44 (0) 207 831 7070

m: +44 (0) 754 066 7073

e: london@scornik.com

Address:

9–10 Staple Inn Buildings

Holborn

WC1V 7QH

London, UK

The Ley de Memoria Democrática, popularly known as the “Spanish Grandchildren” or “Spanish Ancestors” law, provides for the children and grandchildren of originally Spanish nationals to apply for Spanish nationality. It came into force on 21st October 2022 and initially available only for 2 years (i.e. until 21st October 2024).

However, the Spanish Government announced its extension for an additional year, warning however that it will not be extended again. This means that those entitled to apply for Spanish nationality under the Spanish Grandchildren, have now until the 21st October 2025 to apply for Spanish nationality under this law.

The process involves making an application before the Spanish Consulate corresponding to the applicant’s place of residence but only if submitted by the 21st of October 2025 when the window period provided by the Spanish Grandchildren law will lapse and the right to apply vanish.

Therefore, it is essential to file applications before the deadline to benefit from this once in a lifetime opportunity to acquire Spanish nationality without residing in Spain and without renouncing to the nationality that the applicant currently holds.

Who is eligible to apply for Spanish nationality under the grandchildren law?

1. Children & grandchildren of a Spanish mother, father or grandparent considered, under Spanish law, originally Spanish.

 

2. The children of Spaniards whose nationality of origin was recognised by virtue of the right of option in accordance with the Historical Memory Law (Seventh Additional Provision of Law 52/2007 of December 26) or of the present Democratic Memory Law.

 

3. Spaniards born outside of Spain to Spanish women who lost their Spanish nationality by marrying a foreign citizen before the entry into force of the Spanish Constitution of 1978.

SCORNIK GERSTEIN LLP has successfully assisted many Spanish descendants in their process to reclaim their Spanish nationality under this law. If you would like us to assess - without compromise - your circumstances to confirm whether you can apply, please contact us at your earliest convenience.

We strongly recommend acting as soon as possible since, gathering all the documentation required in accordance with the Grandchildren law, can prove a complex and time-consuming exercise, ending up with the missing of the imposed deadline.

Written by Dancy Naranjo

Head of Immigration Department

What are the benefits of the Beckham Law?

Spanish Tax Residents pay taxes at a progressive tax rate from 19% to 47% on their worldwide income. In contrast, Non-Spanish Tax Residents - and therefore those having gained Non-Spanish Tax Resident status under the Beckham Law - pay taxes at a flat rate of 24 % up to the amount of 600,000 Euros and of 45% thereafter on their Spanish income, leaving any income gained outside Spain to be levied at the corresponding foreign jurisdiction.

Employment or work-related income is deemed to be obtained in Spain when working remotely from Spain, despite the employer or paying party being located outside Spain.

Is Spanish Wealth Tax payable by taxpayers who pay taxes under the Beckham Law?

In those Spanish regions where wealth tax has not been abolished, this is levied on the assets held by the taxpayer at 31 December, the accrual date, provided that the net value of the taxpayer's assets exceeds 700,000 Euros.

Spanish tax residents are subject to wealth tax on their worldwide net assets, whereas non-Spanish tax residents - and therefore those who have obtained non-Spanish tax resident status under the Beckham Law - are subject to wealth tax only on their assets located in Spain.

In this regard, it should be noted that for the tax period 2022 onwards, shareholdings which at least 50% of the total assets of the company consists, directly or indirectly, of properties located in Spain, are subject to wealth tax.

What are the enhancements that the Spanish Start-Up Law introduces to the Beckham Law?

1. Tax exemption for remuneration in kind.

    

   Under the former redaction of the Beckham Law, only taxpayers paying taxes as Spanish tax residents, were able to exempt tax on certain income received as remuneration in kind. However, under the new redaction of the Beckham Law pursuant to the amendments introduced by the START-UP LAW, such exemption is extended to non-Spanish tax residents and, therefore, to those within the scope of the Beckham Law.

    

   An example of remuneration in kind that is exempted is the payment of the employees' children tuition.

 

2. Extending the scope of its application.

    

   The START-UP LAW extends the scope of the application of the Beckham Law, allowing Digital Nomads, Highly Qualified Professionals, and those who provide services in the fields of research an innovation, paying taxes under the Beckham Law regime, provided they meet certain requirements.

    

   In addition, the START-UP LAW also extends the scope of the application of the Beckham Law regime to the taxpayer's family members.

 

3. The requirement of not having been Spanish resident prior to applying for the Beckham Law tax regime is reduced from 10 to 5 years.

Who is eligible to apply for the Beckham Law Tax Regime?

1. Professionals relocated to Spain because of an employment contract.

 

2. Company’s director.

    

   This special tax regime continues to apply to those who relocate to Spain because of being appointed Director of a company. However, whereas under the former redaction of the Beckham law the director was required not to participate in the company (nor to hold shares), or if they were could not be deemed to be connected to that company, according to the criteria established in Article 18 of the Spanish Corporate Tax Act, under the new redaction this limitation is now removed unless the company is a real estate holding company.

 

3. Those who have obtained a Spanish Digital Nomad Visa.

 

4. Professionals relocated to Spain to carry out an activity qualified as entrepreneurial according to Article 70 of the Supporting of Entrepreneurs and their Internationalization Law.

 

5. Highly qualified professionals relocated to Spain to provide services to Start Ups certified as innovative by ENISA.

 

6. Professionals relocated to Spain to provide services in the fields of research development and innovation, provided the income they receive from those activities exceeds 40 % of their total income.

 

7. Taxpayer’s family members.

    

   Under the former redaction of the Beckham Law, family members of the main taxpayer who pay taxes benefitting from the Beckham Law regime, could not benefit from it. Under its new redaction introduced by the Start-Up Law, the spouse and the children (under 25) of the said main taxpayer, as well as any disabled dependants regardless of age, can pay taxes under the Beckham Law regimen, so long they meet certain requirements.

When can a taxpayer apply for the Beckham Law regime?

The deadline to apply for the Beckham Law is established by the following rules:

Transitional provision: Deadline 16th of June 2024.

On 5th of December of 2023, the Spanish Government enacted the Royal Decree 1008/2023, which provides for a transitional provision enabling to those individuals who became Spanish resident for tax purposes in 2023, as a result of relocating to Spain in the said year or in the precedent second semester of 2022, to apply for paying taxes under the Beckham Law rules provided their application is submitted by 16th of June 2024.

Those taxpayers who moved to Spain because of an employment contract or after obtaining a Spanish digital nomad visa, can apply for the Beckham Law regime within 6 months from the date that the activity to be carried out in Spain, is registered at the Spanish social security system or in the documentation that allows the foreign Social Security to be maintained.

If there is no obligation to register with the social security system, the 6-month period is counted from the date of commencement of the activity.

Professionals who relocated to Spain to carry out an activity qualified as an entrepreneurial activity according to Article 70 of the Supporting Entrepreneurs and their internationalization Law, can apply for the Beckham Law regime within 6 months from the date they entered Spain.

Written by Laura Gallego Herráez

Scornik Gerstein LLP is a fully UK regulated firm (SRA’s registration number 565232) with £3 million professional negligence cover for our client’ peace of mind.

It then developed on common law jurisdictions and mainly for the purposes of wealth protection, succession planning and tax mitigation.

During the 20th century, offshore trusts gained popularity due to the additional layer of privacy or protection provided to assets from creditors or former spouses.

Basics of a Trust

• It creates a legal fiction consisting in distinguishing legal ownership from beneficial ownership.
• The trustee participates and manages the assets entrusted to him on behalf of the trust and for the benefit of the beneficiaries.
• Trust's assets are not part of the trustee’s own property.
• Trust's assets may include any type of asset, including cash, securities, real estate, or life insurance policies.
• A trust can be created either for an individual or a company.
• A trust must have beneficiaries who are identifiable individuals, except a charitable trust, which can have a general purpose such us alleviating poverty.

Main aim of a Trust

As above indicated, the main aim of setting up a trust is to protect assets and ensure financial security, it is a useful tool to facilitate planning succession and provide tax efficiency.

The United Kingdom jurisdiction provides a legal framework that allows individuals and companies to set up a wide variety of different trusts, which can be tailored to the settlor’s particular circumstances to maximize the advantages they provide.

At Scornik Gerstein LLP we can assist you to create the trust that best suits your needs.

Written by Laura Gallego Herráez.

Who is elegible to apply for spanish nationality under the Grandchildren law?

1. Children and grandchildren of of Spanish mother, father or grandparent who are considered, under the Spanish regulation, originally Spanish.

 

2. The daughters and sons of Spaniards whose nationality of origin was recognised by virtue of the right of option in accordance with the Historical Memory Law (Seventh Additional Provision of Law 52/2007 of December 26) or of the present Democratic Memory Law.

 

3. Spaniards born outside of Spain to Spanish women who lost their Spanish nationality by marrying a foreign citizen before the entry into force of the Spanish Constitution of 1978.

Finally, this law has provisions for those who are already spanish nationals and would like to upgrade their nationality to a Spanish nationality for a of origin. If you have a Spanish birth certificate, it would be worth it to review the marginal notes about how you obtained your Spanish nationality to confirm if you are eligible.

Scornik Gerstein LLP has successfully assisted Spanish descendants in the process to reclaim their Spanish nationality under this law. If you would like to assess your circumstances, please contact us.

How to obtain the license in Spain?

It would be necessary to register with the Bank of Spain as a provider of virtual currency exchange services for fiduciary currency and as a custodian of electronic purses.

How is the license application submitted?

There are three possibilities:

1. Electronic: its use is mandatory for companies and recommended for individuals. The necessary documentation is submitted electronically through the Electronic Registry of the Bank of Spain.
2. By mail: recommended for individuals. The necessary documentation must be addressed to the Bank of Spain.
3. In-person: only for individuals. The necessary documentation can be submitted at the General Registry of the Bank of Spain.

What documentation must go in with the application?

1. AML policy.
2. Risk analysis policy.
3. Application form for providers of currency exchange services.
4. Application form for Custody Change Service Providers.
5. Self-employed certificate (this only applies to individuals).
6. Assessment form suitability for service providers of exchange of virtual currency for fiduciary currency and custody of electronic wallets.
7. Criminal record.
8. Identity documents.

Resolution deadline

Once the application has been submitted, the Bank of Spain has a period of 3 months to resolve from the receipt of said application.

If any deficiency is detected in the application the Bank of Spain will make a further request for correction or for additional necessary documentation or information, which must be provided within the term provided as otherwise the application will be rejected.

Written by Pilar García Fernández.

Read more about Corporate & Commercial.

When does an individual become a Spanish Resident for Tax Purposes?

It should be noted that the rules that apply to consider whether an individual is Spanish resident for tax purposes are not linked to those that apply to determine the emigration status of an individual.

Individuals who either spend 183 days or more in Spain during a calendar year or their main base or centre of activities or economic interests in Spain will be deemed Spanish Tax resident and unless proven otherwise, takes place when the spouse and underage dependent children’s taxpayers permanently reside in Spain.

However, this test normally applies as a tie breaker rule, when it is necessary to interpret a double taxation agreement between two countries, to conclude in which country the taxpayer must pay their taxes.

What are the benefits that the Beckham Law provides?

Spanish Tax Residents pay taxes at a progressive tax rate from 19% to 47% depending on the amount of their worldwide income.

In contrast, Spanish non-tax residents - and therefore those within the scope of the Beckham Law - will pay taxes at a flat rate of 24% up to the amount of 600,000 Euros. If this is exceeded, a fixed rate of 45% will be triggered. However, this will only apply to Spanish income, leaving any income generated outside Spain to be levied at the corresponding foreign jurisdiction, except for employment income, which would be deemed to be obtained abroad in Spain where the taxpayer works remotely.

What are the enhancements that the Spanish Start-Up Law introduces to the Beckham Law?

The enhancements to the Beckham Law introduced by the Spanish Start-Up Law are the following:

1. Tax exemption for remuneration in kind.

    

   According to the previous legislation, only the taxpayer who pays taxes as a Spanish tax resident, was able to exempt tax on the income received as a remuneration in kind. However, following the amendments made by the START-UP LAW that exemption is extended to non-Spanish residents – and therefore those within the scope of the Beckham Law

 

2. Extending the scope of its application.

    

   The START-UP LAW extend the scope of the application of the Beckham Law, allowing to Digital Nomads, Highly Qualified Professionals, and those who provide services in the fields of research an innovation, pay taxes under this regime, provided they meet certain requirements.

    

   In addition, the START-UP LAW also extend the scope of the application of the Beckham Law regime to the taxpayer's family members.

 

3. It reduces the tax period in which the taxpayer has not been Spanish tax resident.

    

   The regime can be applied if the taxpayer was not a Spanish tax resident during the 5 years preceding the taxpayer’s relocation to Spain (as opposed to the preceding 10 years period previously required).

Who is eligible to apply for the Beckham Law Tax Regime?

1. Professionals relocated to Spain because of an employment contract.

 

2. Company’s director.

    

   This special tax regime continues to apply to those who relocate to Spain because of being appointed Director of a company.

    

   However, according to the previous legislation, the director was required not to participate in the company (nor to have shares), or if they were participating in the company cannot be deemed to be connected to that company, according to the criteria established in Article 18 of the Spanish Corporate Tax Act. This limitation is removed unless the company is a real estate holding company.

 

3. Professionals who work remotely, also known as “digital nomads”.

 

4. Professionals relocated to Spain to carry out an activity qualified as an entrepreneurial-activity according to Article 70 of the Spanish Law called supporting entrepreneurs and their internationalization.

 

5. Highly qualified professionals relocated to Spain to provide services to Start Ups.

 

6. Professionals relocated to Spain to provide services in the fields of research development and innovation and the income received from those activities represents more than 40 % of their income of the taxpayer.

 

7. Taxpayer’s family members.

    

   According to the previous legislation, family members of the main taxpayers who pay taxes and the Beckham Law regime were outside of the scope of this law.

    

   However, the Spanish Start-Up Law establishes that the spouse and the children of the taxpayer, who are under 25 years old, as well as any disabled dependants regardless of age can pay taxes under the Beckham Law rules, so long they meet certain requirements.

If you want to be updated about this topic, send an email to london@scornik.com and you will receive the latest news.

Written by Laura Gallego Herráez.

Read more about Taxation.