UK/Spanish tax advice

[premieji]

Hi - We’ve lived in Spain for 2.5 years now. We rent out 2 houses in UK and rent here in Spain - we need advice on UK/Spanish tax and residency issues related to staying here in Spain, becoming fiscally resident and continuing to live on the rental income from our houses in UK - or selling one UK house to buy in Spain. Can anyone recommend a good UK/Spanish tax specialist (preferably near Torrox/Nerja) who won’t charge an arm and a leg up front? We need advice on the best timing, and the most tax efficient ways re income and capital gains for either option. Thanks in advance.

[Stravinsky]

Originally Posted by premieji

Hi - We’ve lived in Spain for 2.5 years now. We rent out 2 houses in UK and rent here in Spain - we need advice on UK/Spanish tax and residency issues related to staying here in Spain, becoming fiscally resident and continuing to live on the rental income from our houses in UK - or selling one UK house to buy in Spain. Can anyone recommend a good UK/Spanish tax specialist (preferably near Torrox/Nerja) who won’t charge an arm and a leg up front? We need advice on the best timing, and the most tax efficient ways re income and capital gains for either option. Thanks in advance.

Hate to tell you this premieji, but you have been a fiscal tax resident of Spain for roughly 2 years by the sounds of it, and have been subject to the Spanish tax system for that time. You are legally bound nowadays to gain a residents certificate within 30 days of arriving here to reside ... this law came into being last March.

So you will be liable for back taxes, maybe fines, you need to talk to a Gestoria who is expert in tax laws, try to avoid using a solicitor. Our Gestoria charges about €60 a year for our tax return. Ypu may now have an issue with double taxation, but have a word with the gestoria and you will probably be able to reclaim it when you make your Spanish returns ..... which are due in May I believe.

You will be liable for:

Income tax on your worldwide income from stocks, shares, property, pensions, etc.

Wealth Tax ... a tax on your worldwide assets including your overseas properties. Good news is that there are quite good allowances on the wealth tax ... for a couple it can be up to €450,000 before tax.

Mortgages are deductable.

And if you sell your property in the UK, as you probably already know, because they are not your principal residence you have to pay CGT.

Sorry I cant recommend anyone down there, but if you google Gestoria Nerja you'll come up with some contacts.

[premieji]

Thanks for your quick reply. We have always submitted UK tax returns and as we are only renting here, thought our main residence was still the UK house we lived in for 10 years before coming out here which we have only rented out for 2.5 years. From what you say, we may as well stay here and bite the bullet - much better climate anyway (ha ha). We will check out what a gestoria in Nerja has to say - thanks for your advice.

[Stravinsky]

Originally Posted by premieji

Thanks for your quick reply. We have always submitted UK tax returns and as we are only renting here, thought our main residence was still the UK house we lived in for 10 years before coming out here which we have only rented out for 2.5 years. From what you say, we may as well stay here and bite the bullet - much better climate anyway (ha ha). We will check out what a gestoria in Nerja has to say - thanks for your advice.

No, afraid that when you have resided here for 180 days your tax residency becomes your main place of residence.

In effect you should have de registered for tax in the UK at that point. The Spanish will still want their tax for the time you have been here, and thats when I say that a good gestoria will be able to help you with sorting it out.

Some Brits have lived here for many many years and still drive UK registered cars (which are illegal and subject to seizure), have never registered as residents and have had a nasty shock eventually

Good luck