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Fiscal residency

Discuss your questions about the EU and Brexit and what it means for Quesada and Spain

Re: Fiscal residency

Postby Shiva » Wed May 08, 2019 7:25 pm

marcliff wrote:I filled in a P85 and sent it to HMRC with a letter informing them that I would now be resident in Spain.
.


Marcliff do you put the date of changing tax residency as the date you were registered on the residents register or the date you hit the 184 days for the first time? Eg I obtained the green residency card at the beginning of March but I won't hit the 184 days in this Spanish Tax year till well past July..
Have been assuming for tidiness sake to do tax returns for UK ( to 6 April 2019) and pay up as per normal and then go through the process of registering with the Spanish authorities while informing HMRC you no longer tax resident in UK? And finding it a bit hard to get my head round how one handles the changeover given that I gather Spain doesn't do split year treatment. Obviously I don't want to pay twice, assume that the first Spanish tax return would give me credit for the tax paid up to April 2019?

Mind you I will still have to do two tax returns on an ongoing basis as I will continue to have UK based income which has to be taxable in UK. Ugh. I feel a headache coming on.
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Re: Fiscal residency

Postby elchedave » Wed May 08, 2019 8:18 pm

Jonnno wrote:Are there any other fiscal residents around here? That means u pay ur taxes here but dont want to become resident.

I have been told that I now need a number to be classed as a fiscal resident but I can only get that number by applying for full residency.

Anyone else experienced that?



Jonnno, as others have stated, you cannot legally choose residency or not. You live here 183 days or more per year & like it or not you are resident, you must declare & pay your taxes here in Spain & by default you should apply for your Residencia. There have been & still are, hundreds if not thousands of people still "living under the radar" but the net is closing on them & with the (dare i mention) Brexit scenario things will probably become much more difficult for so called "illegals"
You will no doubt get conflicting advice from various sources but at the end of the day you will do what you think best.
Regards & good luck,
Dave
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Re: Fiscal residency

Postby marcliff » Wed May 08, 2019 8:26 pm

Shiva wrote:
marcliff wrote:I filled in a P85 and sent it to HMRC with a letter informing them that I would now be resident in Spain.
.


Marcliff do you put the date of changing tax residency as the date you were registered on the residents register or the date you hit the 184 days for the first time? Eg I obtained the green residency card at the beginning of March but I won't hit the 184 days in this Spanish Tax year till well past July..
Have been assuming for tidiness sake to do tax returns for UK ( to 6 April 2019) and pay up as per normal and then go through the process of registering with the Spanish authorities while informing HMRC you no longer tax resident in UK? And finding it a bit hard to get my head round how one handles the changeover given that I gather Spain doesn't do split year treatment. Obviously I don't want to pay twice, assume that the first Spanish tax return would give me credit for the tax paid up to April 2019?

Mind you I will still have to do two tax returns on an ongoing basis as I will continue to have UK based income which has to be taxable in UK. Ugh. I feel a headache coming on.



I put down the date we became residents. However ,that was the in January so we had the full year in Spain. UK HMRC gave me 3 months tax rebate and I received it about the end of September that year. Because my main pension is a government one taxed at source and I wasn't in receipt of the state pension then, I didn't pay any taxes in Spain the next year even though I declared the rebate.

We also sold our property in UK in December one year and became residents in January the next year to avoid any taxes on that score.
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Re: Fiscal residency

Postby dewicymro » Thu May 09, 2019 9:29 am

Here's my perspective as someone who's just filed their taxes in Spain for the first time this week:

As others have said, if you're resident in Spain for more than 183 days in any calendar year, you're treated as fiscally resident in Spain for the whole of that year, so the date on which you become fiscally resident is 1 January of that year, regardless of when you actually hit the 183 day limit.

In the UK it's more complicated. HMRC now have a Statutory Residence Test. Here's a link: https://assets.publishing.service.gov.u ... 078500.pdf (Warning: only open this document if you have several hours to spare!) It seems to me that if you spend time in both countries you could be judged to be fiscally resident in Spain and also caught by HMRC's SRT and be tax resident in the UK at the same time. If that happens, there is a Double Taxation Treaty which means you should never end up having to pay tax on the same income twice.

When you file your first tax return in Spain you also submit an HMRC form Spain-Individual https://assets.publishing.service.gov.u ... vidual.pdf This gets stamped by the tax authority in Spain to prove that you've submitted your tax return here, then gets sent to HMRC and this will generate the appropriate refund of UK income tax and get your UK income paid without deduction of tax (apart from some Government-funded pensions to which this doesn't apply). However it's likely that you will have to pay the first instalment of Spanish tax, due at the end of June, before you get the refund from HMRC so you will be out of pocket for a while.

Once you're through the first year it should get easier (or at least that's what I keep telling myself!)

Good luck!
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Re: Fiscal residency

Postby DTR » Thu May 09, 2019 10:09 am

Why don't you just go and ask a Fiscal Lawyer? Then you'll know .... ;)
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Re: Fiscal residency

Postby blingle » Thu May 09, 2019 11:29 am

...or ask your accountant.

Asking on a forum is just asking for multiple differing answers.
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Re: Fiscal residency

Postby Jonnno » Thu May 09, 2019 12:33 pm

Both good suggestions unfortunately dilemma has been caused by difference of opinion between accountant and residencia specialist :(
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Re: Fiscal residency

Postby jpeg » Thu May 09, 2019 12:47 pm

get ones that know what they are doing
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Re: Fiscal residency

Postby Jonnno » Thu May 09, 2019 1:01 pm

Have lived in Spain for 12 years - oh that life was so simple when listening to advice from professionals!
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Re: Fiscal residency

Postby jpeg » Thu May 09, 2019 1:04 pm

Living in Spain for 12 years does not make you an expert ,I have been here over 40 years but I would not call myself an expert on living in Spain
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