Tax in Spain

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Tax in Spain


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  #1 (permalink)  
Old 17th September 2012, 10:00 AM
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Default Tax in Spain

I'm looking to move to Spain next year.

I will be buying a property outright in Spain after selling my property in the UK. I'm doing lots of research about living in Spain, and making sure it's the right decision.

I'm sure you've had many threads about "taxes in Spain". It seems difficult to pin point certain tax information.

I know the rules have just changed in Spain.

My question is, do you have to pay taxes if you live on your savings??

I know before you become a resident in Spain, you have to prove you can survive without sponging off the state.

Would I still have to submit tax return forms in may/june even though I'm not earning??

It seems to be difficult to get an answer for this.

I won't be using the state for anything..i.e unemployment benefit/medical benefits (I will have medical insurance as this is the requirements).

I will have a TEFL certificate, so could work as an English teacher. If I decide to do this, I will have to pay taxes.

Thanks.

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Old 17th September 2012, 10:16 AM
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Quote:
Originally Posted by mr_madonna007 View Post
I'm looking to move to Spain next year.

I will be buying a property outright in Spain after selling my property in the UK. I'm doing lots of research about living in Spain, and making sure it's the right decision.

I'm sure you've had many threads about "taxes in Spain". It seems difficult to pin point certain tax information.

I know the rules have just changed in Spain.

My question is, do you have to pay taxes if you live on your savings??

I know before you become a resident in Spain, you have to prove you can survive without sponging off the state.

Would I still have to submit tax return forms in may/june even though I'm not earning??

It seems to be difficult to get an answer for this.

I won't be using the state for anything..i.e unemployment benefit/medical benefits (I will have medical insurance as this is the requirements).

I will have a TEFL certificate, so could work as an English teacher. If I decide to do this, I will have to pay taxes.

Thanks.

Firstly, the rules regarding tax (as-far-as-I-am-aware) haven't changed recently.

Secondly, it's all really very simple.

If you live in Spain, then all world-wide income has to be declared and a tax form filled in! The benefits to doing this are primarily regarding IHT and succession tax but there are many others as well.



If you have paid tax elsewhere (state pension for example), then this can be offset against any tax in Spain.

If you are living off savings, then (presumably) you still have investment income in the form of interest and so need to declare this. If, like me, you have a portfolio of shares then you need to talk to a Spanish advisor about the best way to reduce any tax liabilities. When we moved, we changed to a Spanish compliant portfolio which saves us oodles of (potential) tax.

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  #3 (permalink)  
Old 17th September 2012, 10:26 AM
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If the OP really means living off savings (aka no income at all ) then no taxes to pay.

If the OP has interest or other investment income I think the reporting level is €1500 a year. So if you had interest below that level you don't need to file a tax form.

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Old 17th September 2012, 10:55 AM
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Originally Posted by NickZ View Post
If the OP really means living off savings (aka no income at all ) then no taxes to pay.

If the OP has interest or other investment income I think the reporting level is 1500 a year. So if you had interest below that level you don't need to file a tax form.
Yes, but for obvious reasons THE OP SHOULD!


The benefits are many and the negatives are none

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Old 17th September 2012, 12:02 PM
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Quote:
Originally Posted by mr_madonna007 View Post
I'm looking to move to Spain next year.

I will be buying a property outright in Spain after selling my property in the UK. I'm doing lots of research about living in Spain, and making sure it's the right decision.

I'm sure you've had many threads about "taxes in Spain". It seems difficult to pin point certain tax information.

I know the rules have just changed in Spain.

My question is, do you have to pay taxes if you live on your savings??

I know before you become a resident in Spain, you have to prove you can survive without sponging off the state.

Would I still have to submit tax return forms in may/june even though I'm not earning??

It seems to be difficult to get an answer for this.

I won't be using the state for anything..i.e unemployment benefit/medical benefits (I will have medical insurance as this is the requirements).

I will have a TEFL certificate, so could work as an English teacher. If I decide to do this, I will have to pay taxes.

Thanks.
The rules in Spain change every year just as in the UK (i.e. the budget), the biggest change last year was the re-introduction of Wealth tax. It only affects the very wealthy, over 600,000 in investments in addition you get a further 300,000 to set against your house and it is double that if you are married.

You may get a tax rebate every year therefore it would probably be to your advantage to submit a tax return.

You should advise any savings accounts you have in the UK that you are tax resident in Spain and ask that the interest is paid gross (no tax deducted) you should declare this interest on your Spanish tax return.

Any tax on interest deducted from cash in a Spanish bank account will be refunded if your total annual income is less than your personal allowance.

If you do decide to teach your income will be taxed if you earn more than your personal allowance.

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Old 17th September 2012, 12:14 PM
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Originally Posted by annfoto View Post
The rules in Spain change every year just as in the UK (i.e. the budget), the biggest change last year was the re-introduction of Wealth tax. It only affects the very wealthy, over 600,000 in investments in addition you get a further 300,000 to set against your house and it is double that if you are married.

You may get a tax rebate every year therefore it would probably be to your advantage to submit a tax return.

You should advise any savings accounts you have in the UK that you are tax resident in Spain and ask that the interest is paid gross (no tax deducted) you should declare this interest on your Spanish tax return.

Any tax on interest deducted from cash in a Spanish bank account will be refunded if your total annual income is less than your personal allowance.

If you do decide to teach your income will be taxed if you earn more than your personal allowance.
also, if teaching as self-employed, he'd need to register as such & pay NI of +/- 260 a month.....or more depending how old he is

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Old 17th September 2012, 05:24 PM
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Originally Posted by snikpoh View Post
Yes, but for obvious reasons THE OP SHOULD!


The benefits are many and the negatives are none
Could you explain the benefits to me as you have great difficulty here in making a declaration if it is a nil one ! In fact it is nigh on impossible.

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Old 17th September 2012, 06:24 PM
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Could you explain the benefits to me as you have great difficulty here in making a declaration if it is a nil one ! In fact it is nigh on impossible.
but it IS possible..........

Stravinsky managed it

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Old 17th September 2012, 10:07 PM
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Could you explain the benefits to me as you have great difficulty here in making a declaration if it is a nil one ! In fact it is nigh on impossible.
You go to a gestor
You give him your details and figures
He inputs them
He sends it to Hacienda on line
You get a text from Hacienda with a code number
He enters the code on the form
Prints off the form
You take it to the bank and pay if due
End of story

Its online now, and it takes about 10 minutes and costs me 50 for both of us
Everyone has an official proof that you were in the tax system, even if not paying
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Old 18th September 2012, 05:58 AM
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Originally Posted by Stravinsky View Post
You go to a gestor yes
You give him your details and figures yes
He inputs them yes
He sends it to Hacienda on line yes
You get a text from Hacienda with a code number the gestor deals with this
He enters the code on the form yes
Prints off the form yes
You take it to the bank and pay if due The gestor tells us how much of a refund we will get
amount arrives in bank within a couple of weeks
End of story

Its online now, and it takes about 10 minutes and costs me 50 for both of us
Everyone has an official proof that you were in the tax system, even if not paying Costs us 40 for the two of us
Our process if quite similar - see above in red

another benefit (apart from death tax) is capital gains tax

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