We recognise that many people are concerned about the long-term arrangements for UK driving licence exchange here in Spain. Negotiations continue between the UK and Spanish governments on this issue. However, under current Spanish law, residents with valid UK licences will only be able to use these to drive in Spain until 31 October 2021.
We are asking the Spanish Government for an extension to the 31st October date and will update you as soon as we know the outcome. In the meantime, UK licence holders could, if they wished to, apply for a Spanish licence. This includes taking both a practical and theory test. You can find more information here: https://sede.dgt.gob.es/es/permisos-de-conducir/obtencion-renovacion-duplicados-permiso/permiso-conducir/index.shtml.
If you are one of the UK Nationals who successfully registered their intent to exchange their licence by 30 December 2020, as things stand, your UK licence will also become invalid for driving in Spain on 31 October, but you will still be eligible to exchange it for a Spanish one until 31 December 2021 without having to take a practical test.  We recommend you arrange to get an appointment to do so as soon as possible.
As always, stay up to date with the latest information by signing up for alerts to gov.uk/livinginspain.