Hi Everyone - Looking To Retire

Hi everyone, thought i would join and start finding out some information and maybe make some friends

I am looking to retire to Spain in about 3 years time. I will live off of my property rentals, savings and pensions (None of which are large) I believe at current rates i would have about 1850 Euros per month to rent and live on.

I will keep a UK residency so will not be a Spanish resident if that is possible

I have not decided on area but like the look of a place called Frigiliana in Malaga that looks good.

I am sure i will have a lot to lean before i come which is why i am starting now

Plus have 3 years to learn as much Spanish as possible 

So Hi everyone

Mitch

Well as you intend to hop between Spain and the UK the close proximity to airports is an important factor, East Midlands and Malaga suit Mansfield and Frigolinia very well. We keep promising ourselves a trip to Nerja, however a good friend swears by it, I reckon that you have made a good choice.

Good luck with your venture.  

We bought in Frigiliana a couple of months ago, love it.  Don't live there full time yet but cheap flights into Malaga great.  Popping over on a very regular basis.  Lots going on and I find it a very friendly little town.  Enjoy your search x

I will keep a UK residency so will not be a Spanish resident if that is possible

Mitch,  be aware that if you move to Spain, which implies you will be living here,  the 183 day rule will not apply  and thus from day one you will be resident (and tax resident) in Spain. 

That you will have property in UK just means you will have to declare it and pay ‘second home’ tax on that property to Hacienda in Spain.

 You will also have to show that property as one of your assets outside Spain,  although that in itself does not mean more tax to pay, but Hacienda will know of that asset when you die.

Thanks for the replies guys very helpful already.

Johnzx this is the sort of thing i need to find out and why i have started so early.So i have to pay tax on my money in the UK then pay tax again in Spain, does not seem very fair .....Im sure a lot more things like this will crop up.

We will be coming for 6 months initially to make sure we are not making a mistake, this will also give us chance to explore and make sure we are in the right place.

As i will be retired i will be driving over in my car (Im sure there will be a rule about how long i can do that for in a UK car ) so not using the airports.

John,

What is the Spanish authorites definition of someone 'moving to Spain?' I know many people who spend months a year (under 6) in their Spanish holiday homes, they have Spanish bank accounts in order to pay bills relating to their property, some have Spanish registered cars that they park up in long stays close to the airport. however they all have UK homes, UK bank accounts and UK pension income, if they had to pay double taxation they wouldn't come anywhere near Spain. 

Hephaetus

There is no true answer and you are asking the wrong person

There is a bi lateral tax agreement between UK and Spain to cover many things.

The 183 rule is not that black and white.

Simple talk to an accountant here in Spain and then one in UK and then the HMRC instead.

Hephaestas:  To try and save someone finding the  need to try and prove I am wrong.

I have copied this from the web, it is what I would have said.   The ‘main centre of activities’ mean moving to Spain with the intention of living here, rather than just spending holiday time here, i.e. up to the 183 days.

http://www.mondaq.com/x/288084/tax+authorities/DeMystifying+The+Rules+On+Residence+For+Spanish+Taxation+Purposes

Definition of "Residence" for Spanish tax purposes

• Double Test (either will suffice):
  • More than 183 days residence in Spain during the calendar year (January to December) or
  • Main centre of activity or economic interests is based in Spain whether directly or indirectly
• Sporadic or temporary absences will not interrupt residence
•  
• Presumption – that an individual will be resident in Spain if his/her (non-legally separated) spouse and minor dependent children have their habitual residence in Spain, subject to proof to the contrary

Cheers John,

That's more or less what I thought.

All please be careful with financial and tax advice given on here. Although it is generally OK one size does not fit all and there are many other ways and as i keep saying the 183 day ruleis not black and white

Individual tax affairs vary from person to person and the ONLY way to be 100% is to check with HMRC and NOT  rely totally on how others handle their own tax affairs or use google to get "expert" advice and spout off on a forum like they are some kind of all seeing all knowing fountain of knowledge!!!!! - speak to the HMRC and a qualified registered expert in the UK and in Spain

As an example of how things differ my nephew works for a large telecoms company and works FULL time in Madrid on a UK based employment contract. He lives in Madrid with his wife and children (wife does not work). He pays taxes and NI in UK. Has a SIP card (he does renew S1 every year just in case as he is aware of what happened here in valencia), he does not pay Spanish tax and has no obligation to do so.

His contract is renewable every 3 years (into his 3rd term). So he is in Spain for more than 183 days each year and works fully legally for an large multinational company which shows teh 183 rule is not black and white as some say it is

Please, please be careful on how you use information provided by non experts on here and please, please speak to the qualified registered experts. There are many in UK and here in Spain

The penalties for getting it wrong can be quite severe

Thanks again, this is the sort of thing i was expecting,

. I will of course get the proffesional advice i need but am just fishing for thought of people who are already there.

Just out of curiosity with this "183 Day Rule" how long do you need to come back for before you can restart the next 183 days ?

Mitch

Sunnymitch, IF you had already purchased or rented a property before retiring to Spain, then I would agree with Johnzx that ,on arrival, you should immediately start becoming a tax resident however as  no-one can start any process in Spain without proof of legitimate address **and as you have yet to choose an area think that you can take the totally legal route of retaining visitor status until you make a choice or for maximum of 182/3 days.  During which time you will have matriculated your car if Spain is your preferred abode.

** many lawyers will, using an address belonging to a friend,obtain NIE And organise bank accounts.

You need to inquire of your insurance company who will allow you so many months full comp, thereafter 3rd party only.

Spain and UK have a double taxation agreement so once ensconced with the Spanish tax office, so on sending the form to Newcastle informing them of that fact, you will be taken out of the UK system. Only pensions paid by the Government (originally via Postmaster General  ) have that particular pension taxed in country or origin.

Regardless of the correct legal procedure expats should take unfortunately many do not do so. I cannot be alone in knowing people on the foreigners register who have lived here for years, with  the entitlements that entails, but who according to UK still reside there. Cars with Brit number plates ,here for years so sans MOT certs or paying local road tax.

Too many expats have the attitude " they got to find me" which is damned annoying for those of us who like to abide by the law. And does the law care....seemingly not one iota...unfortunately.

For the very best advice on ALL the rules relating to " living in Spain" suggest you read the relevant UK Government web sites.

It's true to say there is not a "one size fits all" answer to the question of tax residency, but the OP did suggest that he plans to move permanently to Spain eventually, so John's point was relevant and useful. Hephaestus, it is clear that people with holiday homes, bank accounts, cars etc. in Spain but who spend less than 183 days in any tax (calendar) year in Spain are not generally fiscal residents here, so would not have to pay tax here (apart from non-resident property tax and rates etc.) so why complicate matters by mentioning this? Tadd, your nephew no doubt comes under cross border worker's rules, so again, totally irrelevant to the OP and his situation, so not really helpful either. Floella, yes, totally agree about how annoying it is when expat "residents" brag about how they're circumventing the rules, and I would never condone that type of behaviour. However, for the OP I would say that your plan to retain your UK home and residency, and spend just (under) 6 months in Spain is a good idea. Best of both worlds. Unless you absolutely feel you need to live in Spain full time when you retire, Spanish / EU bureacracy is a nightmare and only getting worse and I would recommend avoiding getting embroiled in it at all if possible!

Roberto,

The OP will be doing just what I said until he and his other half make the pemanent move, so why complicate things by rubbishing my post? Just because some people admit that they are totally unaware of the rules doesn't make them idiots, conversally neither does it make the ones who think that they know the answers geniuses. 

Perhaps I misunderstood why you were questioning the definition of "moving to Spain" then. It didn't seem to be relevant or helpful since John was replying to the OP's question about retiring to Spain - which would suggest permanent residency. It appeared that you were contradicting his advice for no obvious reason. 

Hi Roberto.Hephaestus and I have been chatting in PMs.     I am sure he was not having a go at me.  Just a misunderstanding I think.

Sorry guys, may have been my descriptions that have been miss understood.

Yes i am looking to retire to Spain as in live there full time. But will be making 2 or 3 trips back to the UK each year for a few weeks at a time.

I would initially go out for 3 months to find a long term rental suitable for this length of time.

Once moved in i would look to get a Spanish bank account to pay bills etc and then just transfer money from my UK account when the exchange rate is good.

I am mainly unsure on residency as i wanted to stay as a UK resident but clearly that does not seem to be the case.

Please excuse my ignorance but as stated this is the start of a big learning curve

Mitch

I'm sure that the mod team will do exactly as they wish, I've not had everything my own way with them, far from it, and I am willing to bet that they will not delete or edit the 'I'm being very hard done to, mardy bum' posts.

Well that just shows what I know. 

Ok, so let's start again.... 

Why don't we all just grow up a little and start using this forum for what it is meant to be: a place to help people and share knowledge and experience. Emphasis on the 'HELP'. Not scare them away! This goes for everyone, not any one person in particular. Now we all know it is easy to misunderstand a post from time to time but do your best to be respectful and polite. If you want to challenge a post, please do so with respect and information. If you feel you are being harrassed report it. Almost everyone has been contacted by us to day and yet we are still intervening, how difficult is it? We would prefer not to ban members from the site or give cooling off periods, that really is a last resort, and it would be a shame as you all contribute greatly to the site and unfortunatley it is very difficult to determine who is at wrong when you are all involved in one way or another and you are also sending PMs in private between you. So we will take each situation as it arises and act accordingly. Because each situation is different and everyone has been a victim at some point. So we are not going to keep score but act when we feel necessary. This said please continue posting relevant information here and maybe sunnymitch will get the help he needs.

We have 'cleaned' the thread to avoid any confusion.

Thanks

Mitch:  You have now clarified that when you come to Spain you will be moving here. So what I posted, copied again below,  applies.

If on the other hand,  you were you to come to Spain to see if you might want to move here, then you would remain a visitor and as such you could spend up to 182 day in any calendar year, without becoming tax resident.

 If you were here permanently for 90 days then you have to register on the EU Citizens Register  (whilst incorrect, that is often referred to as Residencia).    Providing you still maintained your principle home in UK, that would not mean at that point you would become tax resident.

I hope that clarifies things for you Mitch.

My original post:-

Mitch,  be aware that if you move to Spain, which implies you will be living here,  the 183 day rule will not apply  and thus from day one you will be resident (and tax resident) in Spain. 

That you will have property in UK just means you will have to declare it and pay ‘second home’ tax on that property to Hacienda in Spain.

 You will also have to show that property as one of your assets outside Spain,  although that in itself does not mean more tax to pay, but Hacienda will know of that asset when you die.