Living / moving in Spain

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15 Feb 2016 23:02 by joanne73 Star rating. 3 posts Send private message

Our family is looking to finally move to Alicante this September. We have owned a holiday house in Costa Blanca for over 10 years, and my husband will continue to run a Limited company in the UK whilst based in Spain. He will neeed to travel over and stay in the UK for around a week per month, whilst I remain in Spain as our 10 year ols will start Spanish school in September. I will not be working in Spain as our income will come from the UK based busiess.

I have read that there is a 183 day rule regarding the amount of time spent in Spain and the Spanish tax system. My husband wishes to remain a British tax payer and pay tax under the UK tax system but it seems that this might not be possible if either of us spend more than half a year in Spain. Is this correct or are there ways around this tax situation? I also was told about a 156 day rule but have no idea what this relates to!?  We do intend to return the UK regularly during school holidays etc. If anyone can advise me, but I assume that i will need to take up Spanish residencia with NIE for schooling/health services etc, but can my husband remain a non resident (he has an NIE already as a house owner).

Any advice gratefully received!





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16 Feb 2016 08:59 by johnzx Star rating in Spain. 5247 posts Send private message

Joanne,  take a look here:--   http://www.advoco.es/advice/8-personal-tax/92-double-tax-treaty-spain.html

That refers you to here:-

http://webarchive.nationalarchives.gov.uk/+/http://www.hmrc.gov.uk/manuals/dtmanual/DT17603.htm

Briefly it appears that if a person has their main home in Spain, where their family live, then even if they do not spend 183 day a year in Spain they are very likely to be considered tax resident in Spain.

For sure one cannot decide which country they prefer to be tax resident in. They must follow the rules.

I understand that where there is a complicated situation the Spanish Tax office (AEAT) and HMRC will liaise and decide for you.





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16 Feb 2016 09:47 by steone Star rating in Santiago de la Riber.... 386 posts Send private message

With all due respect what you are asking is a very complex matter where you have not given enough details. It is only when the full story has been told that an answer can be given. My best advice for you is to see a competent accountant certainly in England but better would be an International tax accountant. I assume that your income is not in mega bucks so you are trying to save money by asking on here instead of going to the 'big boys'. The only answers you will get here will be from bar room accountants or someone who knows someone who once had a dodgy book keeper who now is hiding here because of past errors.

I have used a 'small' International tax accountant who I can reccommend if you are interested. Just pm me



_______________________
Stephen



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16 Feb 2016 10:57 by Tadd1966 Star rating in Los Montesinos. 1755 posts Send private message

Running Ltd Company in UK is fine but if one or both of you are employed a resident of Spain then you will be subject to income tax in Spain and a cost to your Ltd company. You have 2 options

  1. Be employed by the Ltd company in Spain then the Ltd company will have to pay you a salary and Spanish NI employer contributions etc and you will have to pay the employee Spanish NI contributions and tax on your income (salary & dividends)
  2. You (and or your huisband) can go self employed (autonomo) and invoice the Ltd. company for services, you will be subject to tax and self employed NI stamp in Spain (min approx. 230€ per month). Any dividends you receive will also be classed as taxable income in Spain and they are different you UK dividends I thinks it is a max of approx. 1500€ per year that are tax free

Corporation tax, VAT will be still payable for the Ltd Company in UK.

You could transfer the Ltd Company to Spain as a Ltd company in Spain  

If your husband is working 1 week per month in Spain he will not be subject to UK tax but will be subject to Spanish tax 183 day rule (in Spain), centre of interests, etc. and he will have to register as a fiscal resident in Spain

As you will be living permanently in Spain you will have to register as a fiscal resident and your worldwide income (including ALL income from the UK Ltd company) will be subject to Spanish tax. You will not be subject to UK tax

You really need to speak to your UK accountant and speak to a Spanish accountant and take with a “pinch of salt“ what is said on here by many



_______________________
“The greatest enemy of knowledge is not ignorance; it is the illusion of knowledge”



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16 Feb 2016 12:37 by johnzx Star rating in Spain. 5247 posts Send private message

Hi Steone, I now see what you meant !

 


This message was last edited by johnzx on 16/02/2016.



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16 Feb 2016 17:33 by steone Star rating in Santiago de la Riber.... 386 posts Send private message

Hi Johnzx

Glad to be of assistance



_______________________
Stephen



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16 Feb 2016 21:41 by joanne73 Star rating. 3 posts Send private message

Thankyou everybody for your comments and advice. It does seem this is going to require some specialist advice and help. Clearly this is not a straight forward  or simple matter and clearly one does not want to fall foul  of either tax system.





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17 Feb 2016 07:30 by acer Star rating. 1424 posts Send private message

There was some useful comment here, particularly from Tadd1966, but there were a couple of items to emphasise.  First off it's not easy to predict which tax regime will be best for you, but as a generalism the Spain system is very intrusive and if you have assets in the UK or esewhere it can be bad news. 

Another is that although the Spanish tax authorities seem to be a bit sleepy town they are increasing their surveillance and have lots of ways of assessing if you are exceeding the 183 day rule.  I make a point of keeping my flight detail history on Outlook for this purpose.  But there again there are many who don't take the matter at all seriously who seem to get away with it, well so far.

You must also be aware of the need for a Spanish will if you have any assets of value in Spain.



_______________________
Don't argue with an idiot, he will drag you down to his level and beat you with experience.



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17 Feb 2016 12:01 by Mickyfinn Star rating in Spain and France. 1840 posts Send private message

As long as Britain remains in the EU there will be continued liaising by all government entities to the equivalent Spanish authority. What they do with that information of course is another matter.

It matters not that individuals believe they are getting away with it, (whatever the ‘it’ actually is). One day there will be a day of reckoning. With back dated records the bill can be ruinous. There is a misguided perception the Spanish tax authorities are useless. That may have been in case in the past but it is not now. The digital age has seen to that.

So my message is always be legal. If in doubt consult a professional. Then if they get it wrong you can sue their insurance company.



_______________________
Time is the school in which we learn Time is the fire in which we burn. Delmore Schwartz.



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17 Feb 2016 13:35 by johnzx Star rating in Spain. 5247 posts Send private message

Ifain doubt consult a professional. Then if they get it wrong you can sue their insurance company.

Interesting Micky, but when my gestor (and previously and much expensively, my accountant) makes my tax declaration, I sign it,  I believe that leaves any responsibility for errors with me.  I very much doubt there would be any possibility of claim against the professional's  insurance .

In my case even the 'official receipt' I get is not a legally accepted one (no NIF etc).





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17 Feb 2016 14:27 by Hephaestus Star rating in The Peak District Na.... 1235 posts Send private message

Mickyfinn,

It's not quite as simple as passing over all responsibility to your advisers professional indemnity insurers, however if you were to suffer a material loss due to incorrect advice you could then make a claim against the adviser, who would then make a counter claim against their PI policy.You cannot sue your adviser's insurance company as they insure the adviser, not you, I have £35K of legal expenses cover attached to my buildings and contents insurance contract, this would be very useful in the event of me suffering a material loss due to incorrect professional advice.    

 


This message was last edited by Hephaestus on 17/02/2016.

_______________________

I'm Spartacus, well why not?




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17 Feb 2016 16:46 by acer Star rating. 1424 posts Send private message

Hep,

Whilst part of your posting is correct, your message is itself slightly misleading.

Firstly you use the word "material" whereas you really mean "financial".

Also the legal/insurance process is that the aggrieved party intimates a claim against the professional advisor who in turn seeks an indemnity under their Professional Indemnity insurance (they do not "make a counter claim" that is a completely different legal scenario).

Hopefully Johnzx is truly grateful for all this good advice wink

 



_______________________
Don't argue with an idiot, he will drag you down to his level and beat you with experience.



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17 Feb 2016 16:56 by Hephaestus Star rating in The Peak District Na.... 1235 posts Send private message

Actually acer it should read material, financial or both, however I take your point regarding 'counter claim'. 



_______________________

I'm Spartacus, well why not?




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17 Feb 2016 18:34 by Tadd1966 Star rating in Los Montesinos. 1755 posts Send private message

going a bit off thread a bit and not really helping the OP

We all do it - a reminder often helps smiley



_______________________
“The greatest enemy of knowledge is not ignorance; it is the illusion of knowledge”



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