Moving from NIE to residencia

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13 Apr 2012 21:54 by hrespana Star rating. 31 posts Send private message

This year, for the first time, I will be in Spain for more than 6 months, so I understand I must now apply for residency and that will mean submitting a tax return in Spain instead of the UK.

My savings are in the UK and my pension is also paid into a UK bank.  I really don't want to move all my money to Spain because I still spend a lot of time in the UK (and have an address there).

So, has anyone worked out how best to manage finances in this kind of situation?  If so, your advice would be very welcome since I haven't the faintest idea how to sort all this out !!  Many thanks.





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13 Apr 2012 22:08 by Jarvi Star rating in Halifax UK and Sucin.... 741 posts Send private message

Fly back to the UK for few days halfway through your 6 months for a few days and it will save you all the hassle





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14 Apr 2012 06:05 by johnzx Star rating in Spain. 5240 posts Send private message

QUOTE:-      Fly back to the UK for few days halfway through your 6 months for a few days and it will save you all the hassle   
 
 Not exactly so
 
 
Firstly, if you spend a total of 183 days or more in Spain YOU ARE TAX RESIDENT and must make tax returns for that year.
 
If you are permanently in Spain for 3 months then you must resister on the EU FOREIGN CITIZENS REGISTER (Residencia for EU citizens was abolished in 2002)   However, doing that will also make you tax resident immediately you register.
 
As for your money in UK. There is no requirement to move it to Spain but you will need to inform the UK tax office you are tax resident in Spain, (and your bank) so you will not be taxed in UK (a couple of exceptions including UK Government  employee pensions, police, military, etc.).  The UK tax office will send you some forms which must take to the Spanish Tax Office., so they can liaise.
 
If I were you, and its possible, I would avoid being in Spain for 3 month PERMANENTLY and also being here a total of 183 days.





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14 Apr 2012 08:20 by mobailey Star rating in San Cayetano. 461 posts Send private message

mobailey´s avatar

 Firstly the title of this thread is misleadly you do not change your NIE for Residencia!!!!  as Johnzx as said the Residencia was  abolished in 2002 the Spanish government are now trying to estiblish a full list of all foreign nationals living in Spain be they from another EU country or from any other part of the world and I can see nothing wrong in this.  The NIE is much like the national insurance number you have in the UK only it carries more weight here as you need the produce it if you intend to buy a house,car or open a bank account.  We have lived here for 4 years and my wife receives a pension from the UK which is taxed there and we run a business here and are fully registered here and pay tax here on that (not that we pay that much )  The simlpe fact is we and everyone esle wanted to come and live in Spain because it is a better climate then the UK and the cost of living is cheaper so we must also abide by the laws of the country if  you do not want to do this then move back to live in the UK full time.  The same goes for bringing UK plated cars to Spain the Spanish law says you much reregistered if you intend to keep the car in Spain for more than 6 months which means having a Spanish MOT or ITV and Spanish road tax.  I have seen on here how people are taking their cars back to the UK to have them taxed and MOTed there WHY!!!!!!!!!!  the ITV in Spain is a lot less than in the UK and lasts for 2 years and the road tax is lower here so when you take in to account the cost of taking thecar back to the UK it is costing you more just because you are trying to buck the system.   If you want to live in Spain then live in Spain and all it entails, if you can't abide by the rules than move back to the cold UK.    Sorry if this offends anyone but I think it needed to be said

 


This message was last edited by mobailey on 14/04/2012.

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14 Apr 2012 09:39 by johnzx Star rating in Spain. 5240 posts Send private message

            Mobailey
 
QUOTE We have lived here for 4 years and my wife receives a pension from the UK which is taxed there
 
Guess that must be pension as a former government employee, otherwise, it MUST be taxed in Spain.





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14 Apr 2012 14:48 by hrespana Star rating. 31 posts Send private message

Oh that I could move back to the UK but I can't sell my house in Spain - this is the reason I think I will be here for more than 6 months this year - lots to sort out.   I'm renting in the UK at the moment because I don't have the money to buy. So I think you're being unnecessarily harsh mobailey.  Not everyone is happy here.

I'm pretty sure that my bank insists that I'm resident in the UK, which up until now I have been.  Will just have to contact them I guess and find out what to do. 





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14 Apr 2012 15:49 by johnzx Star rating in Spain. 5240 posts Send private message

 

QUOTE: I'm pretty sure that my bank insists that I'm resident in the UK, which up until now I have been.  Will just have to contact them I guess and find out what to do.
 
It is not a matter for your bank to decide nor any need for you to guess. 
 
If you apply to Register here as an EU Citizen you will be tax resident in Spain as soon as you get the certificate.  As too, if you spend a total of 183 days  here   you will be tax resident here from day 184.
 
The only way around it would be to leave Spain before the three months are up and then return, but make sure you do not exceed the 183 days in total in 12 months.

 

 


This message was last edited by johnzx on 14/04/2012.



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14 Apr 2012 16:36 by hrespana Star rating. 31 posts Send private message

Gosh people seem to be a bit grumpy on here today.  When I said "I guess" I was using that for "I suppose".  It was a statement of resignation that I'd have to talk to the bank since I'm pretty sure that they told me my savings account was only available to UK residents.  As I said, it's the savings I want to leave in the UK.  Until I speak with them, I won't know whether a UK address will suffice.  It's possible that I might have to switch accounts.  This is a UK issue and has nothing to do with Spain (except they'll want to tax me on any interest of course).

I know what the rules are in Spain with regards to tax, I only wish I could predict ahead of time just  how long I'll need to be here.

I'm still not clear though abou this new 3 months rule.  The UK says I'm tax resident there if I'm in the UK for more than 6 months (or 183+ days as we're being exact) yet, if I register in Spain because I'm going to be here for 90 days without a break, I will simultaneously be tax resident in Spain. 

I know the theory but putting it into practice is not going to be easy and life is difficult enough as it is.  Sorry I asked folks.





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14 Apr 2012 16:52 by johnzx Star rating in Spain. 5240 posts Send private message

 

When you said “My bank” I took that to mean a bank in Spain, as you did not make that clear. 
 
I am sorry that I took “I guess” as meaning you were actually guessing.
 
Whilst you now say you know the tax rules for Spain, I got the impression that you were out of your depth and that’s why you asked for help, albeit that your referred to ‘Residencia’ which was abolished in 2002.

 

As for moving money from UK. I said, " As for your money in UK. There is no requirement to move it to Spain"  However, whether you will need to change the account you have in UK for another type of account if you are no longer resident in the UK is a different matter. If its an ISA then you cannot open such an account if you do live in UK, whether you have to close kit if you are no longer resident there I don’t know.

 


This message was last edited by johnzx on 14/04/2012.



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16 Apr 2012 08:49 by sp1946 Star rating in Playa Flamenca, Orih.... 25 posts Send private message

Only UK residents can Put money into an ISA.



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16 Apr 2012 09:54 by sp1946 Star rating in Playa Flamenca, Orih.... 25 posts Send private message

However, former UK residents retain the tax benefits of ISA's already open prior to becoming a non-resident.





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16 Apr 2012 13:18 by Sanchez1 Star rating. 853 posts Send private message

However, former UK residents retain the tax benefits of ISA's already open prior to becoming a non-resident.

As long as you don't declare them to the Spanish tax authorities



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16 Apr 2012 13:34 by sp1946 Star rating in Playa Flamenca, Orih.... 25 posts Send private message

As long as you don't declare them to the Spanish tax authorities

From HMRC website:

Q. What happens if I go abroad?

A. You can only open an ISA if you are resident and ordinarily resident in the UK for tax purposes (ask your Tax Office if you are in any doubt about this).

Crown employees, such as diplomats or members of the armed forces, who are working overseas and paid by the government are eligible to open an ISA. Their spouses or civil partners can also open an ISA.

If you start an ISA in the UK and then go abroad, you cannot continue putting money into the ISA (unless you are a Crown employee working overseas or the spouse or civil partner of a Crown employee working overseas). However, you can keep your ISA and you will still get tax relief on investments held in the ISA. When you return, you can start putting money in again (subject to the normal annual limits).

 

You don't have to declare the ISA's to the Spanish tax authority, just the interest received.


 


This message was last edited by sp1946 on 16/04/2012.



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16 Apr 2012 13:54 by Sanchez1 Star rating. 853 posts Send private message

You don't have to declare the ISA's to the Spanish tax authority, just the interest received.

The Spanish government is introducing a new law whereby all Spanish residents will have to declare any overseas bank accounts (including ISAs), real estate assets, shares etc.

Most people will rightly ignore this new law though...



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17 Apr 2012 16:04 by johnzx Star rating in Spain. 5240 posts Send private message

If one is tax resident in Spain then, just like USA, one already must declare their worldwide assets (with just a few exceptions)
 
As for ignoring the law.  The UK tax office and the Spanish tax office have direct computer excange of info,





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17 Apr 2012 17:21 by auntielinda Star rating in San Miguel de Salina.... 646 posts Send private message

Dear me there is some twaddle posted on these forums, 183 days means any 183 days in 365 they don't have to be consecutive so all this tooing n frowing is not relevant, and if you get a UK govermentment pension even though you are a fiscal resident in Spain you don't pay tax on it here, as that is done a source in the UK all you have to do is a nil return.

How do I know cos we are fiscal residents my income is taxed here in Spain my hubby's is taxed at source in the UK he files a nil return at the same time as i file my tax return & in fact we have always got a few euros to help towardpaying my tax as we file as a couple. When I became resident I was sent a form from the DWP asking which country I wanted to be taxed in.

So to the original poster you will need to do a nil return if you pay in the UK but it will be 2yrs hence as our returns are now for the 2010-2011 year



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17 Apr 2012 18:03 by Pitby Star rating in Andalucía. 1904 posts Send private message

Pitby´s avatar

" So to the original poster you will need to do a nil return if you pay in the UK but it will be 2yrs hence as our returns are now for the 2010-2011 year"

I thought the Spanish tax year was from January to December - and that the tax returns to be filed by end June 2012 are for the year 2011.  If you become tax resident in Spain at any point this year (even if you are not resident here for at least 183 days), I believe you will have to file a tax return by June 2013 for this year, 2012.

 


This message was last edited by Pitby on 17/04/2012.



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17 Apr 2012 18:41 by johnzx Star rating in Spain. 5240 posts Send private message

Thanks Aunties, that’s what I said.
 
But just to make it clear.         
 
                                 For a person who is Tax Resident in Spain.   
 
                                 A UK government pension, which taxable only in UK,  is a pension paid to a former government employee.  Such a pension is ignored in Spain.
 
                                 A   UK government 'old age pension'  is taxable only in Spain.





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17 Apr 2012 23:21 by auntielinda Star rating in San Miguel de Salina.... 646 posts Send private message

 I don't know about that but all I can say is I was given the option as to which country I wanted to be taxed.



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18 Apr 2012 11:06 by johnzx Star rating in Spain. 5240 posts Send private message

Quote from Auntie: Dear me there is some twaddle posted on these forums
 
Yes, just as you say Auntie !
 
But sorry to say, the law dictates where one must pay their tax.  There is no element of choice.
 
If one believes that and ‘chooses incorrectly’ they can wind up paying tax in both countries.

 

(And in Spain as in UK, ignorance of the law is no defence)





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