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15 Mar 2021 17:05 by beauknidle Star rating. 2 posts Send private message

Hi everybody,

Great to find such a mine of information in one place.  We are a retired couple looking to purchase a property in Spain initially to use as a holiday home with a longer term view of moving there permanently.  Currently we visit Spain annually in our motorhome, usually staying through the winter months.  I have scrolled through the various posts on the forum and have gleaned some bits of information that have been helpful but I still have some questions.  The main one being regarding gaining residency and the tax implications of doing so.  We are both receiving private pensions and my wife has just started drawing her state pension as well. We don't have a massive income but we do get enough to pay tax in the UK.  I'm aware that we would need a Spanish bank account and health insurance etc, but the tax rules are still a little unclear.  If we did go for residency (bearing in mind we would probably look to spend 6 months in Spain and 6 in the UK, if that's possible), would we need to pay Tax in Spain as well as the UK?  

Apologies if I'm asking something that has already been answered elsewhere.

 

Thanks

Andy





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15 Mar 2021 21:30 by windtalker Star rating. 1719 posts Send private message

Why would you want to become a resident if you are only spending 6 month's in Spain..you can legally spend 90 days in any 180 days period ... basically 3 months in Spain then 3 in the UK if you do it this way you don't need a private health insurance policy ..as you can legally use the GHIC when doing a 90 day stint ...if you want to become a resident you will need a income of £2,000 per month / own a property or have a long term rental contract plus a private health insurance in place.





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15 Mar 2021 21:56 by mariedav Star rating in Ciudad Quesada. 1101 posts Send private message

You can only be tax resident in one country. It would be far better to retain tax residency in UK due to the higher allowances and, as windtalker says, just do 3 months and 3 months. 

It would only be worth taking out residency in Spain if you are going to spend more time here. 6 months in each country would be pointless.

The income you would require, either as pensions or savings, would need to be 4 x IPREM (Spanish level of income) which would mean access to 6778 x 4 per year or 27,112 euro for you and 1 x IPREM of 6778 for your wife and any other dependents. That's almost 34,000 euro a year. The tax allowance in Spain is only about half that of UK so you'd pay tax at 21% minimum on about 27,000 (depending on age).

Don't get me wrong. We live here permanently and love it and I wouldn't put anyone off. Just 6 months and 6 months would not be viable whereas the 3 months and 3 months split would give you the best of both worlds.

Also, if you are thinking of a property both in UK and Spain to split your time in, if you did decide to sell up and just make one of them your permanent home you would be liable to all sorts of taxes (capital gains) which could end up costing a lot.

Regarding income tax, if you become resident in Spain you would pay taxes in Spain (on all your worldwide income including pensions and interest on savings) and have to tell the UK HMRC you will no longer pay tax in UK as you are a Spanish resident. 





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16 Mar 2021 20:13 by tteedd Star rating in Hertfordshire & Punt.... 974 posts Send private message

Mmm

Beau said they wanted to stay for the winter months. To me that's nearer to 180 days than 90.

Seems to me they will either need a visa or become resident. There may still be a chance that Spain may relax the rules if too many start leaving.

We normally stay 6/7 weeks October-November and the same January-March so are going to have to be careful we do not pass the 90 day mark, and a couple of weeks in May or June are now out.

Might be a good time to buy though if others are returning.





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17 Mar 2021 07:22 by beauknidle Star rating. 2 posts Send private message

Thanks for the information, certainly food for thought.  I think for the meantime we may just carry on doing what we're doing in the motorhome.  





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17 Mar 2021 17:01 by Roberto Star rating in Torremolinos. 4534 posts Send private message

Roberto´s avatar

Seems like the sensible option!

Just to add to mariedav's excellent reply, as well as satisfying the income requirements, my understanding (happy to be corrected if wrong) is that you would also need to apply for a "non-lucrative resident visa", since British citizens are now  subject to all Spanish immigration rules for third-country nationals. This means criminal records checks & medical certificates as well, and a visa fee of £516 (presumably each).

Of course, as tteedd says, Spain may decide to unilaterally offer an alternative option for British retirees. I'm not sure they would be allowed to, as a Schengen country, but I think some EU countries do offer some sort of long-stay tourist visa, so this may be something that becomes an option. 

 



_______________________

 

"Get your facts first, then you can distort them as you please"

Mark Twain

 

 

 




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DISCLAIMER:  All opinions posted on these message boards are the opinion solely of the poster and do not necessarily reflect the opinion of Eye on Spain, its servants or agents.


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