To return or to stay: what happens when you leave the Canary Islands

Every move abroad carries the possibility of return within it. Maybe family calls, maybe health, maybe the urge to move on to another country — or island life turned out not to be the dream after all. Either way: leaving the Canaries deserves to be organised as carefully as arriving. Anyone who simply packs up and goes risks tax debts, a gap in health cover and costly mistakes when selling property. This final part of our series walks through everything to consider.

First the status question: when does your tax liability end?

The decisive point when leaving is not the date on your plane ticket but your tax status. As we explained in Part 22, you count as tax-resident in Spain if you spend more than 183 days in the country per calendar year, or have your centre of economic interests here.

On departure this reverses. Spain reckons in whole tax years — there is normally no part-year split. So if you spend more than 183 days in Spain in the year you leave, you remain tax-resident for the whole year and must file one final full tax return (IRPF) on your worldwide income. Leave earlier and the year may already count in the new country. The timing of your departure thus has immediate tax consequences — and should be chosen deliberately.

The «exit tax»: a non-issue for almost everyone

Few terms cause as much anxiety as Spain's exit tax (impuesto de salida, Article 95 bis IRPF). The good news first: for the vast majority of movers it is entirely irrelevant.

The tax applies only if both of the following are met: you were tax-resident in Spain for at least 10 of the last 15 years, and you hold company shareholdings (shares, company stakes, fund units) worth over €4 million — or a stake of more than 25 percent in a company worth more than €1 million. Only then does Spain tax the unrealised gains on those holdings as if you had sold them on departure.

For an ordinary pensioner with a house, a car and a savings account, for employees or the self-employed without a large share portfolio, this means: the exit tax does not affect you. It targets very wealthy individuals shifting shareholding wealth to a low-tax country. Anyone in that bracket needs individual advice anyway.

The property: sell or let?

For many, the house or flat is the biggest item. Two routes are possible.

If you sell, you should know one peculiarity: once you are no longer tax-resident in Spain, the tax office treats the sale under the non-resident rules. Concretely: the buyer is legally obliged to withhold 3 percent of the price and pay it to the tax office via Modelo 211 — as an advance on your gains tax. You tax the actual gain (the difference between purchase and sale price, less recognised costs) as a non-resident at 19 percent via Modelo 210. If the amount withheld was too high, or you even sold at a loss, you can reclaim the difference. On top comes the municipal capital-gains tax (plusvalía municipal).

Timing matters here too: if you sell before you change status (still as a resident), different rules apply — such as possible exemptions for a main home or for those over 65. It pays to do the maths beforehand.

If you keep and let the property, you become a non-resident property owner in Spain — with exactly the obligations (Modelo 210, rental income, deemed own-use tax) we described in Part 23. That can make sense, but ties you to the Spanish tax system.

The final tax return and the double-tax treaty

In the year you leave, a final Spanish tax return is usually due. While you count as resident, it captures your worldwide income. After that, the double-taxation treaty (DTT) between Spain and your new country of residence becomes the guide — we explained the mechanics in detail using the pension example in Part 24.

A clean transition matters: you should be able to document to the Spanish tax office from when you are no longer resident (for instance via a residence certificate from the new country). This prevents Spain from continuing to treat you as fully liable — the trap we have warned about throughout the series.

Deregistering: padrón, consulate, authorities

Bureaucratically, you need to deregister cleanly. That includes removal from the padrón municipal, the municipal residents' register. EU citizens listed in the foreigners' register should report their departure there too. Don't forget to cancel or transfer ongoing contracts (electricity, water, internet, community fees), and inform your Spanish bank of the status change — non-resident accounts are run differently.

A practical tip: your NIE number remains valid for life and does not need to be «handed back». Anyone who might return or keeps the property will be glad of it.

Health cover: the most dangerous gap

This is where the most common and most expensive mistake occurs. Anyone leaving the Spanish health system and returning to the UK (or to Germany, Austria, Switzerland) must organise the switch actively.

For returners to the UK, access to the NHS depends on being «ordinarily resident» again — that is, living in the UK on a lawful, settled basis. NHS treatment generally becomes free once you have re-established ordinary residence; there is no qualifying period of past contributions for this, but you must actually be back and settled, not merely visiting. If you registered in the Spanish system via an S1 form (see Part 24), deregister it on return and re-register with a GP in the UK. It is also worth telling HMRC of your return for tax purposes.

A note on the UK State Pension: it continues to be paid wherever you live, and on return to the UK it is, of course, uprated normally each year. (While abroad in the EU it is also uprated; in some other countries it can be «frozen» — but that does not affect those moving back to the UK.) For those who paid into the Spanish system, EU rules mean your Spanish contribution years are not lost — see below.

A special case concerns pensioners: those whose healthcare abroad was funded by the UK via an S1 should hand that arrangement back on return and rely on the NHS as ordinary residents again.

Bank account, pensions, contracts

Your state pension is paid abroad and back again — UK and German schemes pay worldwide; you simply report the change of residence and bank details. Conversely, if you paid contributions in Spain, don't let those years lapse: within the EU, insurance periods are aggregated (Regulation 883/2004), so your Spanish contribution years count later towards your pension. Post-Brexit, the UK–EU coordination arrangements likewise protect periods already built up.

A Spanish bank account can be kept as a non-resident (it is then run as a non-resident account, often with different fees) — handy if the property stays or taxes remain to be settled. Anyone leaving for good closes it once all payments are done.

The emotional reckoning: it's allowed to leave

To close, a thought beyond the forms. In the Canaries' expat communities a stubborn narrative persists that returning home is «failure». That is nonsense. Circumstances change — health, family, finances, simply one's own wishes. Moving here is a brave decision; moving back is too. The years on the islands are not devalued by it.

Practically, it helps to plan the departure just as you planned the arrival: with a list, with deadlines, and where in doubt with tax or legal advice that knows your specific case. Then the farewell becomes not a bureaucratic nightmare but an orderly transition — whether it leads back to the old home or on to the next chapter.

This brings our Relocate series to a close. From the first steps (EU citizens' rights, Part 20) through visas for non-EU citizens (21), tax residency (22), buying property (23) and pensions (24) to this guide to leaving: we hope the series has helped you put your island life on a solid footing — from arriving to an eventual farewell.