time of year..

hi all

just a quick question, and if it's a daft one feel free to have a pop......

is there a better time finacialy to move to spain for perminant residance, for taxes comunity charges etc

thanks

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Make sure if you sell your house in the same year that you move to Spain, that you move before July 2nd, therefore meaning that you will not be here for more than 183 days. If you were you would be deemed as tax resident for the whole year Jan-Dec, and would have to declare, and be taxed on, the following year, proceeds of your house sale and any income from lump sums, insurances, winnings , pension pots etc, even though you were in UK at the time.Anything regarded as tax free in UK would not be so in Spain, so the timing of your move is crucial.

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IBI (local council tax) and road tax are payable by the person who owns the property/vehicle in January of that year.  Community charges, electric, water etc are paid from the time you take possession.  As camposol says, if you are selling a property in UK or have a pension lump sum, make sure you move over in the last half of the year to avoid being taxed on it.

 

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Camposol:-  Make sure if you sell your house in the same year that you move to Spain, that you move before July 2nd

 

Camposol, I think you meant after 2^nd July,  however, if one’s  'centre of activities’  their main home, spouse and children etc  is/are in Spain then the 183 day rule does not apply. You are instantly tax resident for that year.

 

Camposol,  so the timing of your move is crucial.

 

If one is moving to Spain then it would need to be after 31^st December, then one would be tax resident as from when they move.

 

 

This message was last edited by elaineG on 01/10/2013.

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thanks all for the replies

we have accepted am offer on our house and agreed a price for a property in spain, spoken to a solicitor

so if htings go to plan will have sold this by the end of the month, and purchase by the end of november fingers crossed all ready to move into in january

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Yes , of course, I should have said move to Spain AFTER July 2nd!

 

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Campsol, (I was just showing you that I did read your post and take it on board) 

Do you also agree "However, if one’s  'centre of activities,’  main home, spouse and children etc  is/are in Spain then the 183 day rule does not apply. You are instantly tax resident for that year."  ?

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Actually, I didn't know that, and I bet many others didn't either;

This must apply to the majority of people who move here permanently, so going on about the 183 day rule is pointless. For people retiring here it IS going to be their main home,with their house and centr of activites.How can the 183 day rule apply to anyone then?

So it doesn't really matter when you move to Spain, you'll be clobbered for tax on your house proceeds,lump sums anyway?

If this is the case then everybody needs to be aware of it.

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Camposol:-  So it doesn't really matter when you move to Spain, you'll be clobbered for tax on your house proceeds, lump sums anyway?

If this is the case then everybody needs to be aware of it

 

No not exactly.  It applies to the year one becomes Tax resident. Thus if you arrive in say March 2012, then transactions outside Spain before 31^st December 2011 are not subject to tax in Spain.

 

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Are you saying that even if you moved to Spain in 2012 AFTER July 2nd, in order to avoid being tax resident for that year, you would still be regarded as such because your spouse, house  etc was here? If so, then what I was saying is right-you would be clobbered for Spanish tax from Jan 1st-Dec 31st of 2012?

Also, for everybody moving permanently to Spain, the centre of their interests would of course be in Spain so that makes a mockery of the 183 day rule-what use is it? Who would move permanently to Spain if it WASN'T the centre of their interests. The house back in UK , if they still had one would then become a bolt hole. Are you perhaps referring to those who live permanently in Spain, but run a business inUK? that would only account for a very few, so for the majority of us, our tax residency applies the minute we set foot in Spain, regardless of whether we moved here before or after July 2nd;in that case many will not have filed tax returns in the following year, because they felt they had obeyed the 183 day rule!

This message was last edited by camposol on 02/10/2013.

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elaineG so does it mean that as we are looking to buy in november this year but not moving out till january 2014 that we will only be liable for 2014 tax and nothing from 2013 even though we sold in the uk and bought in spain

thanks

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Wencra so does it means that as we are looking to buy in November this year but not moving out till January 2014 that we will only be liable for 2014 tax and nothing from 2013 even though we sold in the UK and bought in Spain

 

If you do not move to Spain until 2014 you will not be tax resident in Spain for 2013.-

 

I believe you will be liable for the ‘non resident’s second home’ tax  for 2013.   You will need to check whether that would be just 1/12^th of the annual fee.

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ElaineG-what is the answer to my question in relation to Spain being the centre of one's activities and being instantly tax resident?

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Private message sent to Camposol.
 

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Campasol

Not sure why ElaineG has replied privately, but this Hacienda booklet makes it clear (for everyone else as well). Its not complicated.

Individuals shall be deemed to have their principal residence in Spain if they meet any of the following conditions:
• They spend more than 183 days per calendar year in Spain. Occasional absences shall be taken into account to calculate the period of residence, except when said individuals prove they have their tax residence in another
country. In the case of countries or territories classified as tax havens, the Spanish tax authorities may request proof of residence in the tax haven for 183 days per calendar year.
• Calculation of the period of residence shall not take into account any temporary stays in Spain that are the result of obligations  arising from cultural or humanitarian collaboration agreements entered into with the Spanish public administration with no payment involved.
• Their main or central place of business is directly or indirectly located in Spain. 

Unless there is evidence to the contrary, an individual shall be deemed to be a resident of Spain if, in accordance with the aforementioned criteria, his or her legally non-separated spouse and dependent minor children have their principal residence in Spain.

The one which you have been questioning is number 3. This means that if your family moved to Spain on 1st January 2013, then you would be considered to be a resident, even if you didn;t set foot in Spain, until today. It doesn't mean, as I read your posts, that if you move today with you family, that you would be tax resident for 2013. 

 

I hope this is clear to you, and others

 

 

 

 

This message was last edited by kathyslad on 03/10/2013.

This message was last edited by kathyslad on 03/10/2013.

This message was last edited by kathyslad on 03/10/2013.

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Heard today that , due to the economic climate, the Hacienda is becoming extraordinary efficient .
Working in conjunction with Inland Revenue they are after Brits with undeclared assets and already 2 people I know have been sent extra demands for tax year 2010-11.

Tax havens are no longer places to hide.

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ElaineG-The bit I found confusing was saying that if your centre of interests is in Spain, you are tax resident the minute your foot touches Spanish soil, regardlessof whether it is after July the 2nd-that would then mean a person would be liable for tax for the whole of 2013, as opposed to what  I believed, ie that only if you moved BEFORE july 2nd would you be liable for tax, having spent more than 183 days here.Somewhere along the line I seem to have misunderstood?

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Campasol
I think you're reading too much into this. You are assuming that if you move today, with all your family wtc, that your "centre of vital interest" will be in Spain, and you will be tax resident, even though there's only 87 days left in the year. Thats not what ElaineG said, nor the post I made, which i thought was pretty clear. It has always been the case that this applies, BUT generally its the 183 day rulerdhat applies.

I have to say i thought ElaineGs post of 1st October sums it up quite well.



Camposol, I think you meant after 2nd July, however, if one’s 'centre of activities’ their main home, spouse and children etc is/are in Spain then the 183 day rule does not apply. You are instantly tax resident for that year.
This message was last edited by Kathyslad on 04/10/2013.
This message was last edited by Kathyslad on 04/10/2013.
This message was last edited by Kathyslad on 04/10/2013.

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