Residency Vs Tax Residency - Page 2

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Residency Vs Tax Residency - Page 2


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  #11 (permalink)  
Old 11th January 2020, 07:45 AM
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Quote:
Originally Posted by Rich & Wendy View Post
So, if we buy property in Spain in August and sell our UK property in September, then move to Spain, we will only become tax resident in 2021 ?
That's as I understand it and my current plan is to move after mid-July.

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Old 12th January 2020, 07:31 AM
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Originally Posted by baldilocks View Post

You become a Tax Resident if you spend more than 183 days here OR your centre of economic interest (family/ family home) is in Spain (n.b. this is immediate with no 183 day requirement.)
That answers your question.

If you move to spain, as opposed to just spend some time there, you are tax resident from day one

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Old 12th January 2020, 09:55 AM
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How can you be tax resident from day one ?
Surely you are still tax resident in the UK until you have been in Spain for more than six months ?

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  #14 (permalink)  
Old 12th January 2020, 10:02 AM
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Quote:
Originally Posted by Rich & Wendy View Post
How can you be tax resident from day one ?
Surely you are still tax resident in the UK until you have been in Spain for more than six months ?

BlevIns Franks was quoted earlier. They and baldilocks show clearly that is the law.

However many people who move to spain do not declare that initially, ‘pretending’ for a couple of months they are just ‘looking around’ and considering what they will do . That gives them a breathing space

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Old 12th January 2020, 02:23 PM
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My understanding was, that any large financial transaction like selling a property, cashing in a large investment or in my case taking the 25% out of my private pension was only allowed and would be due no tax in Spain if it was completed in the previous tax year. As long as you were still a UK resident.

Tax years in Spain being 1st Jan to 31st Dec.

Because we intend to fully move in July which would then become our economic base we would be due to pay tax in Spain on anything we earned from the 1st Jan. Obviously any tax we will have paid in the Uk would be taken into account.
My pension move was completed on the 31st Dec 2019 So by my reckoning I won't owe any tax to the Spanish authorities because it was outside the tax year we move in.

If Im wrong please let me know.

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Old 16th January 2020, 05:37 PM
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Originally Posted by Barriej View Post
My understanding was, that any large financial transaction like selling a property, cashing in a large investment or in my case taking the 25% out of my private pension was only allowed and would be due no tax in Spain if it was completed in the previous tax year. As long as you were still a UK resident.

Tax years in Spain being 1st Jan to 31st Dec.

Because we intend to fully move in July which would then become our economic base we would be due to pay tax in Spain on anything we earned from the 1st Jan. Obviously any tax we will have paid in the Uk would be taken into account.
My pension move was completed on the 31st Dec 2019 So by my reckoning I won't owe any tax to the Spanish authorities because it was outside the tax year we move in.

If Im wrong please let me know.
That is correct, as far as house sale proceeds if a property is sold in the U.K. and the completion funds are deposited in a U.K. bank account before 31st December in that tax year, moving them into Spain after 1st January the following tax year no CGT would be due in Spain as they are different tax years.BUT! The Spanish tax authorities are a law to their own and if they believe you did this to avoid the tax they will still come after you. We were advised to put the CGT liability away in a separate account and forget about it, I believe after four years you are safe. Our tax advisor in Spain told us of someone this happened to and they fought for two years and lost!

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Old 16th January 2020, 06:15 PM
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Originally Posted by High flyer View Post
That is correct, as far as house sale proceeds if a property is sold in the U.K. and the completion funds are deposited in a U.K. bank account before 31st December in that tax year, moving them into Spain after 1st January the following tax year no CGT would be due in Spain as they are different tax years.BUT! The Spanish tax authorities are a law to their own and if they believe you did this to avoid the tax they will still come after you. We were advised to put the CGT liability away in a separate account and forget about it, I believe after four years you are safe. Our tax advisor in Spain told us of someone this happened to and they fought for two years and lost!
Thats ok its not from a house sale, we rent. Its my 25% tax free amount from my pension. But as I won't be moving all of it over straight away we should be OK.
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Old 16th January 2020, 08:41 PM
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Right, we've had another call with Blewin Franks and have confirmed my understanding of how we need to progress.

For background, we're both 60 and have taken "early retirement" although 6 years to go for state pension and S1 (assuming it's still available post brexit) and we have sold out house and expect to complete around the end of March. I'm also in the process of taking the 25% tax free allowance from my SIPP's. For tax efficiency purposes this means I can't spend more than 183 days in Spain in 2020, but need to be there for at least 90 days for residency registration.

Fortunately I have access to a friends apartment which I plan to use as base from (or after) 6th July (180 days from then to end Dec) for a month or so while I find somewhere to rent (or possibly purchase).

Shortly after arrival we'll get our NIE so we can buy a car and arrange health insurance prior to registering. WeI'll also need a bank account (non resident one initially, then convert to get a resident one) but we only intend to transfer funds sufficient for our requirements prior to 2021.
I may move funds sooner should a UK/EU deal not be approved...

Any flaws in my logic ir have I omitted anything important?

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Old 16th January 2020, 09:16 PM
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Quote:
Originally Posted by Overandout View Post
No, British citizens can benefit from the EU freedom of movement until the end of the transition period.
Is that comma a typo?

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  #20 (permalink)  
Old 17th January 2020, 08:10 AM
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Originally Posted by ShoulIStayOrShouldIGo View Post
Is that comma a typo?
No.
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