Hi - thinking of emigrating to Spain - Page 2

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Hi - thinking of emigrating to Spain - Page 2


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  #11 (permalink)  
Old 29th January 2020, 10:01 AM
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Originally Posted by snikpoh View Post
All depends when you move.

If you move after June this year, then you probably won't be considered tax resident until NEXT year.
You would be - from the date you register.

You wouldn't have to do a tax return until 2021 - for the year ending December 2020.

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Old 29th January 2020, 10:23 AM
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If you moved in June then yes you could argue that you spent less than 183 days in spain so not liable for tax but if you registered as resident in June then you MIGHT be deemed to have shown your intent to make spain your principal financial centre and would then face tax liabilities. I am pretty sure a professional lawyer would point this out to you whilst others might suggest the likelihood as being small. You dont have to any kind of expert to figure out what the intent of the law is
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Old 29th January 2020, 10:30 AM
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As I sit here in my house in southern Spain wearing mittens, a woolly jumper and thermal underwear, struggling to get the room temperature above 17ºC without bankrupting myself with massive electricity bills, watching TV footage of floods, snow, hailstorms, hurricane force winds and the devastation wreaked on the Mediterranean coasts by Storm Gloria, and recovering from the worst bout of flu I've ever had, I have to smile at the idea that people still believe living in "sunny Spain" will improve their health.

Just come and spend a winter here before you commit yourself to emigrating. You'll soon be pining for your centrally-heated, insulated home back in the UK.

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Old 29th January 2020, 10:38 AM
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Quote:
Originally Posted by snikpoh View Post
All depends when you move.

If you move after June this year, then you probably won't be considered tax resident until NEXT year.
Why not (if you go through the whole process of registering resident, which as I understand it in Spain makes you immediately tax resident for the current tax year).

As I understand it, you are tax resident in Spain if any one of the following applies.
  • You spend more than 183 days in Spain in one calendar year. You become liable whether or not you take out a formal residency permit. These days do not have to be consecutive. (Temporary absences from Spain are ignored for the purposes of the 183-day rule unless it can be proved that the individual is habitually resident in another country for more than 183 days in a calendar year.)
  • Or, your “centre of vital interests” is in Spain, e.g., the base for your economic or professional activities is in Spain.
  • Or, your spouse lives in Spain and you are not legally separated even though you may spend less than 183 days per year in Spain

But I also understand that "centre of vital interests" could include the place where you own your only home for example, and is most certainly not restricted to the country in which you spend the most time, for example to earn your income, even if you pay tax there, especially if you register as resident in Spain. In fact, as I understand it, you may very well need expert tax advice to determine whether you are tax resident. But more importantly perhaps, as I understand it, if Spain considers that you are tax resident the date of tax residence can be taken to be the date you become properly registered as resident. Not only that, as I understand it, in that situation you become immediately tax resident for the whole of that calendar year.

Though of course I could be entirely wrong on this, especially since the most reliable links I can find (without spending many hours searching) seem to suggested that in the above case you should seek expert advice in relation to your individual circumstances, though admittedly I haven't searched using Spanish terms.

And yes, I do note that you say "probably" in your reply, but for people selling a property in the same year they move and fully register resident in Spain, it could be a bit painful and a very unwelcome surprise.

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Old 29th January 2020, 10:42 AM
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Apologies to all, whilst I was posting my reply to Snikpoh, several of you responded - and had I already seen those posts, I would not have responded at all, given that just happens to be my view.
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Old 29th January 2020, 10:47 AM
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I agree with you about what you say and aslo noted that the other poster was careful to say PROBABLY . So it is best to take professional advice about this because there are alot of post suggesting rather dubious interpretations of the law which should maybe not be taken as Gospel
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Old 29th January 2020, 11:08 AM
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I appreciate everyone's attempts to clarify the tax residency situation, but must admit to becoming more confused by the points made.

I thought I had fully understood the determinants of tax residency when I read the old thread "Private medical insurance residency application", but it seems I may have jumped the gun.

As I understood it, the 183 day rule means tax residency in Spain occurs by default if spending more than this time in Spain in any calendar year. Spending less time than this cumulatively would not make an individual automatically tax resident, but there are two other criteria which may still confer fiscal residence.

If your spouse and/or dependent children live in Spain for the majority of the year, then your centre of vital interests is in Spain and you are also deemed fiscally resident, regardless of how long you yourself spend in Spain.

The second criterion is that your centre of economic interests lies in Spain, whereby you either own the majority of your assets, or earn the majority of your income from the country of Spain. It is hard to see how this requirement could come into play automatically simply on the basis of applying for your civil residence certificate.

It is my assumption, currently unfounded, that if an individual moves from the UK and then spends fewer than 183 days in Spain in any given calendar year, they will be deemed as UK tax resident by default because they are UK citizens, even if they fall short of the 183 days in the UK tax year required for UK default tax residency, since they also fall short for the Spanish tax year.

As has been said, there is no real substitute for tailored professional advice, but I had assumed that I had gotten my head around this particular issue.

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Old 29th January 2020, 11:19 AM
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Lakif: Hello. If you register as resident in spain then you are officially identifying spain as your home base. You cant then spend 183 days in UK every year so as to avoid paying spanish tax. You cant be resident in two countries at the same time. If you phoned the spanish tax man and told him you had just taken spanish residency but intend to spend the majority of the year in the UK because it is financially more advantageous he is not going to be too happy
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Old 29th January 2020, 11:27 AM
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Quote:
Originally Posted by Lakif View Post
I appreciate everyone's attempts to clarify the tax residency situation, but must admit to becoming more confused by the points made.

I thought I had fully understood the determinants of tax residency when I read the old thread "Private medical insurance residency application", but it seems I may have jumped the gun.

As I understood it, the 183 day rule means tax residency in Spain occurs by default if spending more than this time in Spain in any calendar year. Spending less time than this cumulatively would not make an individual automatically tax resident, but there are two other criteria which may still confer fiscal residence.

If your spouse and/or dependent children live in Spain for the majority of the year, then your centre of vital interests is in Spain and you are also deemed fiscally resident, regardless of how long you yourself spend in Spain.

The second criterion is that your centre of economic interests lies in Spain, whereby you either own the majority of your assets, or earn the majority of your income from the country of Spain. It is hard to see how this requirement could come into play automatically simply on the basis of applying for your civil residence certificate.

It is my assumption, currently unfounded, that if an individual moves from the UK and then spends fewer than 183 days in Spain in any given calendar year, they will be deemed as UK tax resident by default because they are UK citizens, even if they fall short of the 183 days in the UK tax year required for UK default tax residency, since they also fall short for the Spanish tax year.

As has been said, there is no real substitute for tailored professional advice, but I had assumed that I had gotten my head around this particular issue.
Not sure if the Spanish authorities do consider 'domicile' status and 'residence' status as meaning sometimes the same and sometimes different. In the UK, though a complicated status 'domicile' is considered in a number of High Court (England and Wakes jurisdiction) authorities usually to do with education provision . here it is summarised with some examples for UK born, parents born UK intending to live EU

https://www.gov.uk/government/public...asis-rdr1#cona

paul

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  #20 (permalink)  
Old 29th January 2020, 11:34 AM
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I dont think domicile has any bearing on residency.

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