Residency Vs Tax Residency

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Residency Vs Tax Residency


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Old 9th January 2020, 10:49 PM
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Default Residency Vs Tax Residency

I've had a chat (and due another) with Blewin Franks regarding residency and tax residency.


We've just sold our house in the UK in anticipation of a move to Spain.

As I understand it, if we are in Spain for 183 days in 2020 we are deemed tax resident and would be liable for capital gains tax on the profit on my UK house sale.

I believe I can "apply" for residency after being in Spain for 90 days.

My question is does this 90 day period have to be consecutive? We plan to come to Spain in April and May (60 days) for house hunting and then return mid September and apply for residency in mid December, with an annual total of under 183 days for the calendar year .

I would only be liable for capital gains tax from income from investments from 2021.. so the profit on my house would not attract tax.

Is this correct?

TIA

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Old 10th January 2020, 07:23 AM
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Put simply, yes.

The 90 days must be in one 'chunk'.

The 183 days is a total number of days during a tax/calendar year.

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Old 10th January 2020, 08:15 AM
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Quote:
Originally Posted by Pipeman View Post
I've had a chat (and due another) with Blewin Franks regarding residency and tax residency.


We've just sold our house in the UK in anticipation of a move to Spain.

As I understand it, if we are in Spain for 183 days in 2020 we are deemed tax resident and would be liable for capital gains tax on the profit on my UK house sale.

I believe I can "apply" for residency after being in Spain for 90 days.

My question is does this 90 day period have to be consecutive? We plan to come to Spain in April and May (60 days) for house hunting and then return mid September and apply for residency in mid December, with an annual total of under 183 days for the calendar year .

I would only be liable for capital gains tax from income from investments from 2021.. so the profit on my house would not attract tax.

Is this correct?

TIA
Have Blevins Franks not given you a copy of their excellent book "Living in Spain?" They usually give it to all their prospective clients and give updated copies to their existing clients as they become available. The book tells you everything you need to know about tax and legal issues as an expat in Spain.

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Old 10th January 2020, 08:27 AM
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I think you can apply for residency from day one if you're intending living in Spain and that you have 90 days to sign on the foreigners register and get your NIE number etc, etc.

Correct me if I'm wrong.

Steve

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Old 10th January 2020, 09:15 AM
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You do not apply for residency! As an EU citizen you are required to register as a resident within 90 days of arrival to take up residency. Once you are residing in Spain, you should register on the local Padron.

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.)

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Old 10th January 2020, 10:38 AM
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If you apply for residency after 31st January wont you be subject to the 3rd country requirements for residency? I know there is a year for trade agreements but technically ths 31st will be the day the UK leaves the EU meaning there is a 11 month period for existing residents to be are registered but new residents will be non EU applicants?

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Old 10th January 2020, 10:40 AM
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Quote:
Originally Posted by kaipa View Post
If you apply for residency after 31st January wont you be subject to the 3rd country requirements for residency? I know there is a year for trade agreements but technically ths 31st will be the day the UK leaves the EU meaning there is a 11 month period for existing residents to be are registered but new residents will be non EU applicants?
No, British citizens can benefit from the EU freedom of movement until the end of the transition period.
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Old 10th January 2020, 10:48 AM
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So will our residency status be affected again if they fail to reach a deal after year transition?

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Old 10th January 2020, 10:58 AM
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So will our residency status be affected again if they fail to reach a deal after year transition?
AFAIK. No, this next stage is about trade not about citizens rights.

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Old 10th January 2020, 01:21 PM
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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 ?

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