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I find some potential conflicts me. I live in Spain presently less than 182 days. My bank obtained and charged me 15.03 last August for a certificate No residente. I submitted on time my 210 and paid in 2011 my No Residente Tax to Hacienda. Now after 3 months I am supposed to register with the police for a Temporary Resident certificate but as I am here every year I want to get a Residents permit so I do not have to register each year with the Police. However will this stop me being classed as No Residente in the Bank and are there repurcussions. For example to religiously keep flight tickets to prove that I am not here 183 days and assessible for Spanish taxes as I would be worse off due to the lower personal allowances. Would appreciate opinions
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I have been non-resident in Spain for about 5 years, spending 4-5 months there each year,making half-a-dozen trips each year lasting from 10-55 days from my primary residence in Ireland . I have had no problems to date and would offer these observations:
1.A difficulty may arise if you wish to spend more than 90 consecutive days in Spain-could you make 2-3 separate trips,each under 90 days duration,totalling under 182 days in each year?This would preserve your No Residente status and free you of any need to concern yourself with permits
2.In common with you ,I wish to maintain my No Residente status for the present,and I considered retaining flight records,but found it cumbersome-I do retain a record of my dates of arrival/departure in Spain in my diary.I do retain a record of my electricity/water consumption-it is clear from these records that my flat is unoccupied for large swathes of time(I never let it) I make a tax return each year in respect of the Impuesto de No Residente through my solicitor
3.It appears to me that Hacienda is interested in taxing the rental income which some No Residentes may enjoy from their properties,rather than bringing foreigners of no great means into the income tax net.The former is fairly straightforward -any tax official worth his salt should be able to estimate the rental value of a property in Spain-the latter surely very difficult and probably only worth attempting in respect of people of obvious means or perhaps,as an instrument of policy against known criminals.I have had no queries to date regarding time spent in Spain each year or any questioning of the unlet status of my flat.My bank sent a Certificado de No Residente to Hacienda a couple of years ago and I presume Hacienda will seek these certificates from my bank from time to time
4.The 182 days rule is very clear and it is essential to have regard to it,allowing time for a possible emergency trip to Spain if required at a late stage in the year to resolve some crisis
Best of luck with your venture -
Hello.
Are there any advantages of residency or non residency?
Are property taxes cheaper for residents?I received this
“In accordance to Spanish law on taxes for non-residents, all non-residents that have a property in Spain have to pay the Income Tax ” does this applies to residents also ?Also, I purchased a car from a private party in Spain.
What are the documents needed, besides the car documents?
Do I have to pay a tax? to Whom? new plates? are old plates OK?
I am not too familiar with all of documents needed in Europe.
Is residency better when buying a car?Thanks
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Hi,bentdavi
I presume your queries are addressed to forumites generally-I have experience only of No Residente status but the position as I see it is as follows:1.Spanish taxation law provides for two categories of taxpayer,resident and non-resident
2,A resident is someone who spends 183 days or longer in Spain in a calendar year,or who has his centre of economic activity in Spain or who has a spouse to whom he is still married and/or dependent children in Spain
3,A non-resident is a taxpayer outside above categories,with his primary residence outside Spain
4,A non-resident is required to pay tax in Spain on income arising in Spain
A resident is required to pay tax in Spain on all his worldwide income5,Generally speaking, a non-resident will be liable for for only Impuesto No Residente (he will of course have municipal taxes such as IBI also)
A resident is entitled to primary residence relief and does not pay this tax-he does on second homes6,There are reliefs available in the form of expense/allownces against letting income etc which are available to residents only
These may vary from time to time and I am not expert in that area7,The balancing of pros and cons in terms of opting for resident status is very much an individual matter-it depends on the financial circumstances of the individual
A careful assessment should be made and perhaps professional advice sought8.The general advantage of No Residente status is that is pretty carefree -you have no contact with the bureaucracy provided you play the rules of the game
The disadvantage of course is that you are limited to 182 days in Spain per year-if this is an issue for you you might look at residency status and in general I do not think there is too much to fear in this regard9 OP indicated that it appeared to him that he would pay more in direct income tax in Spain and I found this also when I did the sums some years ago
10.Ihave never bought a car in Spain but http://www.idealspain.com/Pages/buycar.asp would appear to address your queries
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Yes the personal allowance for an over 65 in UK is £10500 and we have tax free ISA and CGT relief up to about £11000. In Spain personal allowance about 6010 Euros only. Then your pension is taxed at 8% and savings and dividends at at least 20%. If you die and Spanish resident and you have a UK property you will lose most of its value in Spanish taxes and if you don’t pay up within 6 months you face crippling fines.Thats how friendly is the Spanish Hacienda.Iin n UK we have a generous allowance for Inheritence Tax -in Spain your beneficiaries are taxed from £7500 at rates up to 84% on not large amounts. The only advantage of Spanish residence is if over 65 and your Spanish home is main residence and you live in it for at least 3 tax years and have paid your Spanish Taxes you can sell it CGT free if you are lucky enough to have made a profit.And CGT is 21 % on the whole gain if you are non resident and lucky enough to make a profit. When I leave UK and return the Immigration put my passport in a machine so the UK Govt can check how long you are away. They do not seem to do this at the Spanish airport I use. Does this mean they don’t know when you come and go ? Or do they know from flight lists ? It is said they can check from Electricity bills. However my useage is not much except a bit in the winter months and in any case I let my brothers go there so just because its used -it does not mean its my use. But if I were ill and needed to overstay or I had been ill in UK and needed another week or two what is the position and how likely are they to find out ? As said Spanish Tax is very diferent from UK and as far as I can see its much more than in UK except possibly for a person who works there where the personal allowance is higher about 9000 euro and they do not have much in the way of savings investments or property worldwide.
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I do appreciate the replies on this thread that I initiated and of course to Mark for his kind provision of this. Now I can tell you in UK there is a lot of pressure in the tabloids for a referendum to take UK out of the EU altogether. Whether there would be a majority for this is a question and its still questionable whether it comes to a referendum.But there is much anti-German hysteria whipped up bythese sometimes rubbish newspapers even if some issues about the Euro and EU are defensible in part including the Human Rights Directives. There is concern about the Euro and political convergence and some countries need financial bail outs -in my opinion substantially as a result of the Anglo -Saxon model. But the amount of private debt in UK is no small matter and where do we go if we need for a bailout ? Mr Putin !! certainly not the ECB ! Coming to the point though the issue of being Resident or No Residente. My understanding is this -if you are in Spainish territory from 90 days you need a residence permit. Now the fact you become resident does not mean you have to pay Spanish Income Tax as a resident. These two things are not quite the same. You only become liable to Spanish income tax on your worldwide income if you are there more than 182 days between 1.1. and 31.12 in any one year. If you own no property in Spain there is not so much to worry about if you ‘forget’. If you are there in excess of 182 days you are required to fill in a Spanish Tax return and pay extra tax subject to the amount you paid to HMRC giving Double Taxation Treaty relief. The fact your electricity bill shows useage in most months is not conclusive evidence -my brother goes there for a holiday and sometimes I goout for a week or two in the summer for a swim in warmer water than the darker months. But keeping flight tickets very important I think. But the question I raise is this -because of the two risks of 1 . a disorderly break up of EU or 2. if UK were to leave I am seriously considering becoming Residente as a property owner and desire to be there particularly in winter -which is why I bought something there I think at least it gives me 5 years rights there.So I would become in fact in a dual resident position But if UK were to leave EU might we suffer much? CGT on any property gain on a sale might it go back to 35% ? How much does one really gain as Residente except that if you do not get this while we are in it would possible to get it if we left. So to sum up I am fairly sure that getting Residente status does not incur automatic liability to Spanish Income Tax on worldwide income -it is subject to being there in excess of the 182 days -I have no knowledge of how reasonable the Hacienda are in accepting reasonable evidence. One Spanish man told me in Spain you do not have to fill in a Tax Return if your income is less than 22ooo euros -is that true. The Spanish Bank once got me a No Residente Certificate and charged me 15 euros. Now what happens with your bank account if you change status? Comments greatly appreciated on these further points. Muchas Gracias
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I think I may have some confusion here between the Residencia Permit and Residente -fiscal. I have now read you have to apply for a Temporary Residence permit when in Spain 90 days and this you obtain from the local police and lasts further 3 months. It is then that one needs to apply for Residente status with fiscal implications. It appears you cannot just apply to be Residente if you are habitually there more than 30 days a year but less than 183 days.So far I have just stayed 4 or 5 months without getting the temporary permit at 90 days. So if I do 1.1 -27.3 19.6 -04.07 28.8 -17.9 and 10.11-31.12 that totals 174 days rest of year in my UK home . But are the breaks between the visits deemed ‘temporary’ absences or ignored ? But it seems I cannot have Spanish Residente status if I do not on one occasion in one tax year trigger the 183 days.
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One observation I derive from this is that if one did trigger the 183days by staying longer in one tax year and applied to be fiscally resident or by default filled in a tax return in Spain declaring worldwide income and duly received the Residente status for 5 years -if in subsequent years proved that I was in Spanish territory only 170 or 175 days (flight tickets) -say I died in year 3 could Hacienda charge my estate Spanish CGT on my UK main residence? Even worse might they in any of the 5 years on the basis of the Residente status be automatically entitled to make such claim whether or not I could provide flight evidence. I note that in order to be CGT exempt in selling a Spanish property one must pay Spanish income tax for 3 yearson worldwide income and used the property as a main residence . Well one can extrapolate possibilities but this is hard going !
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Hi,Ptr
Your recent posts raise a few issues which I would like to address in a few weeks when I have returned to Spain and checked sources-I note that there is no disagreement between us on facts in the context of residente/no residente.A few points of information-1.Spain operates a system of API(Advance Passenger Information) whereby airlines are required to supply details of names and passport details of all passengers arriving and departing Spain-details see ryanair.com or other airlines
2.Utility companies are required to supply usage details to tax authorities but I see this as significant in the context of tax authorities seeking tax on rental income
on properties in Spain.I have read that tax authorities scrutinise adverisements of properties for letting in Spain to this purpose3.The Hacienda website http://www.agenciatributaria.es refers to “they have stayed longer than 183 days in Spanish Territory over the calendar year..occasional absences are included except if the taxpayer accredits thair residency in another country” in categorising resident taxpayers
I take this to mean that once you have established residency in Spain,acknowledged and accepted,”occasional absences”which would result in your spending fewer that 183 days in Spain in a particular year,would not affect your residente statusAs stated.I would hope to return to issues,particularly mechanics of moving to residente status when I have checked up-to-date position
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Great thread!
I am a residente by marriage, but not a fiscal residentie. I am still working in the US, full-time until sometime next year, then after I “retire” just 3 months a year, again in the US.
I was told that I only have to pay taxes in one country, not two.
My question is this: Would pensions payment and income from tax-free retirement accounts (from the US) be considered taxable income in Spain, should I become a fiscal residente?
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I note from Blevin Franks today that Spain has been told by the EU to equalise the Inheritence Tax rules that discriminate against non residents. It is expected Spain will comply but it will cost a lot and they will increase the Spanish rates like they did the CGT when that was equalised. So it will help but not fully -as long as we stay in the EU. Liam Fox makes a lot of soundbites but if he cannot back them up with FACTS and EVIDENCE should shut !
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The Spanish government in recent days has introduced some changes in respect of documentation required when EU citizens apply to register on the Registro Central de Extranjeros,as they are required to do if they stay in Spain for longer than three months.These changes are in accordance with Ministerial Order 1490 of 2012 of 9 July 2012,which takes effect from 10 July,and appears to govern applications made after 24 April 2012.A useful summary of provisions can be found on British Embassy(Madrid)website.While the fundamental procedure in applying for registration has not changed,the requirement to supply additional documentation has the effect of making summaries of application procedures carried on some websites somewhat incomplete
The most significant change is the requirement that NON_WORKING applicants must submit documentation establishing that they possess health insurance,public or private,contracted in Spain or another country,which provides cover during stay in Spain equivalent to that provided by ‘Sistema Nacional de Salud’-pensioners will be understood to meet this condition if supplying appropriate proof that they have a right to health care from State supplying pension -and also must supply documentation that they possess sufficient assets for themselves and their families to avoid their becoming a burden upon Spanish social assistance system
Cases to be assessed on individual basis,guidelines given re assessment of income/assets
This post relates only to non-working non-student EU citizen applicants(EU to include EEA and Switzerland) -
Following upon questions raised by Ptr in earlier posts and changes noted in my last post it might appear useful to attempt to summarise position regarding residency in Spain in respect of EU CITIZENS ONLY as it appears to be at the present time.This summary might require a number of consecutive postings and I would ask any person tempted to reply to wait until summary has been completed
Summary:
1.EU citizens(to include EEA and Switzerland)are required to apply for registration on the Registro Central de Extranjeros within three months of arriving in Spain if they wish to spend longer than three consecutive months in Spain-application process detailed on various websites
2 The legal provisions relating to registration are to be found in EU Directive EC2004/28 of 29 April 2004,which regulates residency and free movement of EU citizens;Spanish Royal Decree of 240/2007 of 16 Feb 2007;and provisions of July 2012 detailed in immediately preceding post
3.The right of an EU citizen to reside in any member state(Switzerland a special case) is a fundamental right which the host state may regulate within permitted limits but set aside only for serious issues of public policy,security or public health
4.Application for registration is made on Form EX-18,with documentation as required.
Confusion has arisen from the fact that the form is designed to cater for EU citizens who wish to apply under the three months rule (“first-timers),who tick a particular box,and those who wish to apply for permanent residency,on the basis of having lived legally in Spain for 5 consecutive years (“old hands”)who tick a different box.While the first category is required by law to register (“first-timers”) it appears to be the case that individuals who have lived legally in Spain for 5 consecutive years have established the right to permanent residence there without the need to register.However,there are significant advantages in favour of such persons registering and they are not subject to tests applied to “first-timers”when registering.Essentially a form of level playing field has been established-“first-timer”apply now,and get permanent residency after 5 years automatically,those with 5 consecutive years legal residency apply now and obtain permanent residency immediately
Any change to certificate details-change of nationality,marital status,address-must be notified to issuing authority.Validity of certificate will lapse in the event of absence from Spain in excess of 2 consecutive years -
5.The registration process has been developed by Spain (some have argued inappropriately) into what is for all practical purposes a system of processing applications for residency in Spain,with all that this might entail.Some individuals will have decided that they wish to reside in Spain and will be happy to take this first step.Others for good reasons may not wish to register and may accept that they must not spend any period of longer than three consecutive months in Spain and organise their affairs accordingly.A brief interruption of stay in Spain is all that would be required-the conventional wisdom is that this must include at least one overnight stay away from Spain
6.The granting of a certificate does not,of itself,make the certficate holder liable to Spanish income and other taxes.The three categories of individuals liable for Spanish income tax etc are set out in the Hacienda website,English section,here quoted verbatim:
“An individual is resident in Spanish territory when any of the following circumstances apply:
1.They have stayed longer than 183 days in Spanish territory over the calendar year……….
2.They situate the main base or centre of their activities or economic activities,directly or indirectly in Spain
3.They have dependent not legally separated spouse and/or under age children who are usually resident in Spain.This latter situation accepts evidence to the contrary
Otherwise,where none of the previous situations applies,an individual is considered as non-resident in Spain” end quote
This statement is in the context of resident tax liability
The certificate holder becomes liable for Spanish income tax etc at midnight on the 183rd dayof residence in Spain in the firste calendar year in which they have the potential to achive 183 days ,these days being counted on a cumulative basis,not consecutive basis.For example,if an individual obtains a certificate in Nov 2012,having spent three months only in Spain,there would not be potential to reach 183 days in 2012,and the clock would start ticking from 1 Jan 2013.If an individual obtained a certificate in April-Sept 2012,having spent three months in Spain,they could well total 183 days or more in 2012 and in that case they would be liable for Spanish income tax etc for the year 2012 and be required to make a return in May/June 2013 for the tax year 2012 -
7.Some commentators have stated that a certificate holder is tax-resident from the date of granting of certificate and have quoted this as being Haciendas view.We are perhaps getting into the area of semantics here.Clearly certificate holders have indicated an intention to reside in Spain and have placed all their details on very public record and they could reasonably be regarded as tax residents in waiting,pending certain arrangerments with their home country.However,they become paying tax residents on the basis defined in Haciendas website
The tax year in Spain is the calendar year
8.With the granting of a certificate,some issues may need to be addressed,such as the status of a non.resident account(if any),the provision of documentation to the individuals home country tax office confirming status as(potential tax-resident in Spain,enrolment on Padron(if not already enrolled)etc
9.It is important to be clear on the distinction between the three months rule and the 183 days rule.An individual who spends 183 days or longer in Spain in a calendar year is classed as tax resident,whether he/she likes it or not,whether he/she is registered or not.Because the three months rule is on a consecutive basis and the 183 days rule on a cumulative basis an EU citizen could quite legitimately not register,on the basis that he/she has not made any trip longer than three consecutive months in the particular year,but exceed the 183 days total by making a number of trips of shorter duration e.g.an EU citizen spending every second month in Spain would not need to register but would exceed 183 days if commencing this cycle with January in Spain in a particuar year
10.I lay no claim to being expert in these areas(I am ,indeed,a newbie)and individuals making decisions in these matters should always seek expert advice.I have been struck by the extrordinary amount of misinformation on these matters being presented on the internet and by the differences in approach displayed by different authorites to a particular issue-but hey!estamos en España!
This concludes summary -
Very scholarly Tenorio ! I read your account a couple of days ago and decided not to reply immediately so your name was showing up so people noticed it ! -but I did want to add that I am thinking what kind of penalty might be applied to people who do ot comply? Unless something is specifically laid down like a fine or to be arrested by the police and deported. It might I would think depend on the circumstances. In my village the local police chief lives next door and knows me and I think would not be very interested in hauling me in unless he had to -that is if he were aware if I overstayed 3 months and had not registered for a 4th or 5th month over the winter.I know of people who seem to have been there for long time and these Brits seem to have sometimes private incomes topped up with a bit of black earnings but say that nobody knows about them as they rent their accomodation.
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Ptr
I am not so naive as to believe that visitors to Spain act in accordance with the regulations at all times but you will appreciate that in a summary such as above people could not be informed of other than the legal provisions;I could not possibly advise anyone,if my advice was sought,other than to obey the law in all respects
In reply to your query,the figure of Euro 300 is often mentioned as the ball-park fine for a minor breach of residency rules,but the position is as follows:
There are three categories of offence in this area-.1″Infracciones leves” (Minor offences)eg failing to notify change of address etc…fine up to euro 300
2.”infracciones graves” (Serious Offences) for “encontrarse irregularmente in territorio Español “
essentially being in Spain without the required permission
fine of euro 301-6,000
3.”Infracciones muy graves”..activities prejudicial to the security of the state,organizing clandestine immigration etc……………………………………………………fine Euro 6001-60,000
Three minor offences can constitute a serious offence,three serious a very serious offence
When assessing fines in all cases regard to be had to proportionality,degree of culpability in particular offence,damage caused and financial circumstances of offender-figures quoted are guidelines
I have not come across any reports of holidaymakers being fined in my researches
It appears to be the case that the Spanish authorities are primarily interested in targetting individuals
who effectively live in Spain without permission.Holidaymakers obviously contribute to the Spanish economy and in these difficult times Spain welcomes all sources of revenue
Expulsion is a very serious step that must be justified on grounds of serious public policy or securityissues -
Well Tenorio a very scholarly contribution again. I have been diverted on the issue of elderly care -and of course one does not mind giving tax to a country that one chooses to live in having left ones own if one feels that its not all take and that the Spanish state accepts some responsibility for you in return -but this might be a hope too big if you need residential care but you might scrape by in your own home if its not severe and you can finish your days with some help at home from I am sure some of the local very often kind people. It has enough problems looking after its own increasing numbers of elderly living longer maybe due to some locust years and generous state expenditure on free holidays etc. Obviously one has to comnply with the law but I am of the opinion that resident less than 182 days and coming for one winter stretch and a couple of weeks in June I am safely a ‘holidaymaker’ and not in their sights particularly for fines for not registering my presence. However the matter that is of utmost important is not to overstay their welcome and be caught for an assessment for income tax on all ones annual income. Further of the utmost importsance is not to overstay the year you die ! Cheerful indeed but -then you can be assessed for Inheritance Tax on all of your worldwide wealth including a house in UK that you might have bought long ago and is now worth more. Now what happens if you overstay 182 days because you are ILL ? If you have bought your air ticket and the flight is delayed probably no problem -you’re in the airport checked in waiting and catching next available flight -well maybe unless immigration pick up your name on a later flight number. But if you have to go for medical help -will a Doctors certificate suffice for something more than a headache or stomach upset ? If you overstayed because you became ill -and then died in Spanish territory beyond 182 days would it be legitimate to argue that you had complied with the rule in previous years and this was exceptional due to the circumstances and you should not be subject to a charge from Hacienda for that year. Or is the Lei quite uncompromising. I think we need to know !!!
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The bandwagon for UK to leave the EU continues with the Daily Express suggesting some countries would welcome it if we were to persist with a veto of thev Brussels Budget increase. It is suggested we would in UK be better off out and the £ would improve in value. But how would it affect property owners in Spain Residente or No Residente ? After all we would be in the EEA like Switzerland. These countries would soon be missing our business trade tourists and property owners if they would say restrict us to 90 days at a time ?
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The issues we are concerned with here are how it affects Britains who live part of the time in Spain. Being fiscally non resident or becoming fiscally resident and the related matter of how much one can be physically resident without passing this threshold.Tonorios excellent contribution of September 27th 2012 explores this but it raises certain inconsistencies and I will draw attention to this. It is interesting at a time when there is pressure in UK to leave EU. We might retain EA status like some other countries. But some of us who have would like to establish as much right to remain as we can and also to make the most of what is available Tonorios paragraph 4-7 describes the process of registration for residence and the form caters for those who wish to exceed the 3 months in which you do not have to register and also for those who wish to register for permanent residence.( This means the right to remain in Spain and there are new recent Laws about this) However he points out that if you have lived in Spain for 5 years legally you are considered to be a resident -if you have not registered it may mean that you have validated yourself in other ways by paying your IBI to the local ayuntamiento and to the hacienda even by simply being there working and paying taxes on your earnings through an employer.The criteria for being fiscally resident are clear in that you are liable if you exceed 182 days physical presence including entry and exit days in any calendar year. Now being liable and having to pay taxes on your world income in Spain they can check with Immigration -how much are they doing it ? But the worrying thing is if you get a certificate for permanent residence Tonorio suggests Hacienda Deems that as you are fiscally resident. So if you register after 3 months and do it for 5 consecutive years in practice you can then claim permanent residential status -IF you want to -but if you can prove with say air tickets you were not there more than 182 you cannot be liable to Spanish resident taxes and should be able to continue in this way but maybe the best protection is to make sure you do the annual self assessment and pay any tax to HMRC. . The essence of the matter it seems that staying over 6 months requiring a second appearance at the Foreigners office will triggerthe processing of a permanent residence certificate.It occurred to me that if UK does leave EU we might remain in the EA (European Economic Area) . The main issues affecting Britain in Spain in being tax resident there is higher taxes on income and investments and a property in UK being liable to Spanish CGT particularly if bought cheap long ago.
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Miserable weather in UK . I would like very much to fly off to Canaries for a few days to get somereal sun and a sea bathe. However it will mean exceeding my 182 days if I then return on November 4 when I am booked . I have only 3 days available. I wonder how thorough are Hacienda and if they are really bothered to catch people for a few extra days -if I could say there was an emergency even -like having my electricity meter changed. Ok could get a train to St Raphael and go to that lovely spot Boulouris in France but will cost a lotta -but apart from that they will be pleased to see me if I go to my flat. .
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That may indeed be the case Mark.! Flight lists are fed into the Spanish Immigration so they know who is on a plane arriving ?Do Hacienda access these ? Its easier maybe to do it in an island or maybe all the input goes through a computer in Madrid. Even then they might get only flight lists -the computer programme might not enable them to put in a name and get a print out of all entries and exits in a year be them at San Sofie, Las Palmas,- Barcelona airports Port Bou Irun train stations -or motorway frontier controls.If they were on the ball they would run every non resident through computer every year. I have not come accross any empirical evidence of non residents being challenged and whether its because -they don’t have a clue – or they are not very interested unless its blatantantly obvious, have not the time or staff or the computer technology not sophisticated or dedicated enough.. I have heard they make enquiry of Electricity companies to check on letting as might be indicated by continuous useage but not sure if to do any other check -but where there is an obvious break – an extra week or two at a separate time would not really be sufficient indication.I am feeling a little more relaxed about this -but am keeping my eyes and ears open on this subject !
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For the people worried about the 183 day rule, may I suggest Portugal as a way out.
I am looking into becoming non resident for the coming year, I have declared what assets I have in the UK on the 720, but am determined that hacienda will not get its hands on my assets in the form of taxes, haircuts or whatever.
I am taking a rental of a country house, in Braga, Portugal for a few months starting in Jan 2013.
There is no border control between the 2 countries, and so if the difference between residency in Spain depends on the 183 day rule, why not nip over the border, rent a place, get the relevant paperwork.
What you save on the tax you would have paid on you world wide assets, can be used for the rent of the Portugal place.
If the sums add up, why not play things to your own advantage.
I intend to sell a few commercial properties in the UK, the time of selling will depend as to when I can become non resident in Spain.
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Good Luck but if there is no border control how can you be booked out of Spain. -if you walk across or drive across who knows you left.? If you have a flight ticket or even a dated train ticket and a receipt to prove you paid for it that is evidence. Which makes a further point -when you leave Spain keep your tickets and if your passport went through computer on way in make sure it goes through on way out. I am trying to find out what happens if you overstay unintentionally for health reason and you have medical certification in Spain particularly if you had a return ticket that support your intention..
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@Ptr wrote:
Good Luck but if there is no border control how can you be booked out of Spain. -if you walk across or drive across who knows you left.? If you have a flight ticket or even a dated train ticket and a receipt to prove you paid for it that is evidence. Which makes a further point -when you leave Spain keep your tickets and if your passport went through computer on way out make sure it goes through on way out. I am trying to find out what happens if you overstay unintentionally for health reason and you have medical certification in Spain particularly if you had a return ticket that support your intention..
You dont need to “book out of Spain”, you declare yourself non resident and instead of travelling to the UK, just go to Portugal instead, so as not to pass the 183 day rule.
You only have to spend 90 days in the UK to be tax resident., and you will need to show that you are under British tax scheme.
The same way that a flight or boar ticket will prove that you have been in the UK, the same applies to Portugal, a card payment in a supermarket, a cash withdrawal from a bank, proof of rental.
If you overstay the 183 days for what ever reason, you are tax resident, illness will not change that.
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I can understand fern this might work as long as you enter and leave via Portugal -as long as this hole in the fence remains ! Good Luck It might well be OK if you need to exceed the limit modestly and less likely to come to notice with other possible precedures like the observation of your Spanish electricity useage. I am not paranoid about this but very interested to be aware about the efficacy of this rule and how far it is effectively operated . Seemingly the Portugese are not as myopic and greedy as the Spanish.Following the news today see they are chasing their own footballers !
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@Ptr wrote:
I can understand fern this might work as long as you enter and leave via Portugal -as long as this hole in the fence remains ! Good Luck It might well be OK if you need to exceed the limit modestly and less likely to come to notice with other possible precedures like the observation of your Spanish electricity useage. I am not paranoid about this but very interested to be aware about the efficacy of this rule and how far it is effectively operated . Seemingly the Portugese are not as myopic and greedy as the Spanish.Following the news today see they are chasing their own footballers !
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It does not matter about electricity usage, if you are in Portugal, you are in Portugal, end of.You will be complying with the law of not being 183 days a year in Spain, and that is all there is to it.
Also it is not against the law to have someone staying in your propety while you are not there, as a non resident you will be paying an imputed tax anyway.
People need to think outside the box if you dont want to be resident because it is detrimental to your pocket, then spend a few bob wisely and arrange things to your advantage.
As for the Spanish government,QLD tell them that you are going to rent in Portugal, which is your right to do so as an EU citizen, because you dont want them getting their hands on your assets, it is all perfectly legal.
You dont have to schlepp around being an apologist, you have the right to spend you time where you want, and at the same time following the residency rules.
The law is the law,and if you stick to it, hacienda have no say in the matter.
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You miss my point fern -simply you can rent anywhere -you can rent in France and cross the border and the French will put your passport through the machine and when you leave Spain to go there they will log you out at the frontier. Whats the point of sneaking too and fro accross the open Portuguese frontier other than evade the law !It must cost quite a bit to rent -maybe more than a bit of extra annual tax in Spain -but a consideration if you are protecting a substantial UK asset from CGT and Inheritance Tax. The point I made is that if you enter Spain from the Uk and are logged in and exit via Portugal you may be DEEMED AS STILL IN Spain. unless you re-enter in a legitimate way the same fiscal year and could satisfy them when you left if ever asked-unlikely probably ! Its not my intention to discourage you -but I am wary of accepting anything now unless I check it out thoroughly.
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@Ptr wrote:
You miss my point fern -simply you can rent anywhere -you can rent in France and cross the border and the French will put your passport through the machine and when you leave Spain to go there they will log you out at the frontier. Whats the point of sneaking too and fro accross the open Portuguese frontier other than evade the law !It must cost quite a bit to rent -maybe more than a bit of extra annual tax in Spain -but a consideration if you are protecting a substantial UK asset from CGT and Inheritance Tax. The point I made is that if you enter Spain from the Uk and are logged in and exit via Portugal you may be DEEMED AS STILL IN Spain. unless you re-enter in a legitimate way the same fiscal year and could satisfy them when you left if ever asked-unlikely probably ! Its not my intention to discourage you -but I am wary of accepting anything now unless I check it out thoroughly.
You miss point too, what I am saying is if you rent in Portugal, spend money there, become tax resident in the UK 90 day rule, and spend less time in Spain then you ARE a non resident, according the the Spanish rules if you dont pass 183 days.
As for expence if it means spending a couple of kilos on rental, as opposed to paying 30 kilos inheritance tax, then only a moron would say it is expensive.
And I would advise all posters who can argue the point to the extent you are on this forum, that you put into practice some of your arguing skills, and tell it to the hacienda.
Sometime a bit of ballsing it out and sticking to your guns, when you know that your are in the right and not breaking the residency rules, goes a long way.
The problem is not many are willing to go head to head and assert themselves with the authorities, being right or wrong they just give in, and more or less say “screw me if you want Mr taxman.
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I agree with what you are trying to protect-and I did refer to that -its a very valid issue! I was unsure from the way you were doing it that- this was safe (ie evidencing that you are there less than 183 days in any one year) -in particular to be careful that you cannot be deemed resident in Spain by virtue of the fact that if you fly in any one year and its recorded and nothing is recorded when you leave the Spanish don’t have it clear-if they notice Surely that is fair comment.Its possible they might accept your explanation if they did ask -but they might be more interested if it happened more often.And if they at some point dispute your explanation decide that you might have been doing so all along. As said not trying to be unhelpful -indeed the maximum elucidation can only be helpful in being more aware surely . Indeed I find these posts helpful in stretching my own thinking -even if as Mark observes -actually they might not have a clue ! But the risk is on you and you have to be water tight because your UK asset is vitally important to you.
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@Ptr wrote:
I agree with what you are trying to protect-and I did refer to that -its a very valid issue! I was unsure from the way you were doing it that- this was safe (ie evidencing that you are there less than 183 days in any one year) -in particular to be careful that you cannot be deemed resident in Spain by virtue of the fact that if you fly in any one year and its recorded and nothing is recorded when you leave the Spanish don’t have it clear-if they notice Surely that is fair comment.Its possible they might accept your explanation if they did ask -but they might be more interested if it happened more often.And if they at some point dispute your explanation decide that you might have been doing so all along. As said not trying to be unhelpful -indeed the maximum elucidation can only be helpful in being more aware surely . Indeed I find these posts helpful in stretching my own thinking -even if as Mark observes -actually they might not have a clue ! But the risk is on you and you have to be water tight because your UK asset is vitally important to you.
It is harder to prove a negative, ie that you were not in Spain, when in fact you were in Portugal.
But much easier to prove a positive, and collect evidence that you were in Portugal.
If it came down to the wire as for the “days in Spain count” all that is needed is some proof that you were in Portugal.With digital cameras, a photo taken outside a fixed “landmark” ie the flat you rent or local bar/shop that you frequent, card payments etc, then there would be no problem with hacienda.
At present I am not only a Spanish resident, but also a Spanish national, I also have business intrests in Spain that I am keeping.
I am taking steps to becoming non resident along with my wife, in my case it is a lot more complicated, but as I have lived in the UK before coming to Spain, I am using that fact to my own advantage.It should be a lot easier for a British person to “get out” and be convincing, if proof is needed.
Hacienda are hacienda, but some seem to think they are the Gestapo.
I have declared what I need to on the 720, and if I am questioned on my descision to be non resident, I will tell them that I wish to dispose of UK assets and do not want them to take a chunk in the way of CGT, so for the relevant year I will become a non resident.
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One advantage you have fern is being on the mainland and Spain has along border with Portugal and indeed France if you are a good climber The Resistance used to get people over the edges of the Pyrenees to escape the Gestapo ! Unfortunately if in Canaries you need to be a good swimmer maybe get picked up out of territorial waters on a passing cruise ship. I am going to find out how easy itis to get to Madeira directly-if there are flights- from there so I can have a break there in winter to give me more days in Spanish territory -not so far as Portugal. Flight costs to Morrocco very high.about £200 return for very short distance 100 kms maybe !
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@Ptr wrote:
One advantage you have fern is being on the mainland and Spain has along border with Portugal and indeed France if you are a good climber The Resistance used to get people over the edges of the Pyrenees to escape the Gestapo ! Unfortunately if in Canaries you need to be a good swimmer maybe get picked up out of territorial waters on a passing cruise ship. I am going to find out how easy itis to get to Madeira directly from there so I can have a break there in winter to give me more days in Spanish territory -not so far as Portugal. Flight costs to Morrocco very high.about £200 return for very short distance 100 miles maybe !
Living on the islands is another matter, but the same thing would apply, nip over to Madeira.
As you say it depends on your UK assets and personal circumstance, ie someone with aged parents who have valuable assets, might well need to think about such things.
My wife knows a widow, who is 76, and still has a mother in the UK who owns quite a valuable property, she is now a non resident as from about 1 month ago, as she and her mother don´t want to share what was once her childhood home with the Spanish taxman.
I don´t blame them. Wise women, just a little adjustment to save around 75k in taxes.
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There is a company fern that operates in the Canary Islands -Binter Canarias that flies to Morocco and to Funchal in Madeira. It costs though 200 euros return to both destinations- not cheap !. But I have never been to Morocco and its very short flight -this would be a way occasionally to stretch my 182 days by taking 7 or 14 days exploring there and having those days for a trip in June or September as budget affords of course !
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I have read if you do become Tax resident in Spain after 3 years your relatives can inherit your properety free of tax if they keep it for 10 years . Say there are more than one beneficiary and one wanted to use it and the others just wanted their money -I have said this to my brother the other two are on the ticket but you can always give them a bit in hand and work it out that way.Being non resident in Spain I have altered my UK Will to accomodate the the Spanish Will . I am having to restrict my postings now to no more than occasional because I spend too long on a lap top and its causing eye strain !
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PLEASE NOTE. I often see contributors writing that 183 days is the maximum. Thiis is wrong -To be NO RESIDENTE you can stay in Spanish territory only 182 days and that includes days of entering and leaving. Also you should validate it by filing with Hacienda each year for the previous year and pay the small tax due by 31/12 to avoid fines. This is then entered into your NEI records .You can do this with a lawyer or more cheaply with a Gestoria or John at Spanish Tax Forms Ltd who can be found on-line who will do it for you.
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