resident in Spain

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Daisymay1
Tourist
Posts: 18
Joined: Mon Dec 29, 2014 12:55 pm
Location: Galera near Baza

resident in Spain

Postby Daisymay1 » Wed Aug 19, 2015 7:44 pm

Could anybody please give me some info regarding becoming a resident and the tax implications.

We are soon to move over and will still own a UK property, which we will rent out and have fully managed by an estate agent, what happens re TAX is it better to pay the TAX on the rental income in the UK or Spain or do we not have a choice ? also with savings in the UK what happens re the interest do we pay that in the UK or elect to pay in Spain ? we really don't want to hide anything but also do not want to pay tax twice !

We have arranged our 1st years health insurance so that we can apply for residency and after a year apply to pay into the Spanish health system until we reach pensionable age, I am right in believing that once one of us (me as I am the oldest) reaches pensionable age the other person also gets to be included in the health system as a pensioner.

we also want to buy a new car, can we buy one when we only have our NIE numbers but no residency as yet

we would really be very grateful of any advice please.

infoseeker
Resident
Posts: 275
Joined: Sun Jan 26, 2014 4:17 pm

Re: resident in Spain

Postby infoseeker » Thu Aug 20, 2015 5:16 pm

You declare it in Spain if you are resident here.
You declare all savings interest in Spain, and all income wherever it comes from.
Government pensions only taxable in the UK , still have to be declared in Spain.
ISAs, though tax free in UK are not in Spain, same with pension lump sums, winnings, inheritances etc.
Some UK banks, if requested will pay interest gross, but some will not, and it will have to be claimed back.
Hopefully your private health insurance is with a Spanish company as it has to be.
If one of a married couple is receiving the state pension, the other, as a dependent, will also receive free healthcare. Bear in mind that with the state pension being extended, 65 is not always the age at which free health care is received.
If, after one year of health insurance you decide to pay into the Convenio especial, so that you get Spanish NHS care, if you are over 65, but still not receiving the state pension, it will cost 175 euros each per month, instead if the 60 euros per month if under 65.

elusive
Resident
Posts: 1667
Joined: Sat Apr 07, 2012 11:49 am
Location: East of Malaga

Re: resident in Spain

Postby elusive » Thu Aug 20, 2015 8:52 pm

We went through the same things. we rent out our uk property. fill out a non resident landlord form from HMRC that will get your rent paid to you tax free.Which as others say you declare here when you do your first tax return. HMRC will prob want you to do a self assessment but they will contact you as and when.

re savings you can keep ISA's open but you cant add to them or open new ones. but you can transfer them. to the latest version if when it matures to kerp a decent intrest rate. ISA's are tax free in the uk so easy to deal with interms of declaring the intrest here. other accounts you can get a form from HMRC.R45 is it? that will get you intrest paid tax free but as info says some dont accept it. check with your bank first.imo unless needed keep as much savings in the uk as poss. wr brought to much with us as we were unsure about buying .intrest rates are dire in spain and the system imo is very backward.your options are limited in opening uk/offshore accounts once you leave the uk.

we needed a NIE and padron to buy a car. you dont need residencia

uk and spain have a double taxation agreement so after you have filed you first spanish tax return and received your certificate of tax residency fill in the double form from HMRC and you will get a tax reb
ate off all the income tax from what you have paid on your uk pension. so for a short time (while waiting on the uk rebate) you eill have paid fouble tax so to speek

El Cid
Andalucia Guru
Posts: 14681
Joined: Sun Oct 24, 2004 10:42 pm
Location: La Herradura, Costa Tropical, Granada

Re: resident in Spain

Postby El Cid » Thu Aug 20, 2015 9:16 pm

elusive wrote:We went through the same things. we rent out our uk property. fill out a non resident landlord form from HMRC that will get your rent paid to you tax free.Which as others say you declare here when you do your first tax return. HMRC will prob want you to do a self assessment but they will contact you as and when.



Being pedantic, but that's important with tax issues, your rental income is not paid tax free, it is paid without tax being deducted - not the same thing at all.

As you say, you still have to complete a UK self declaration form and if your rental income exceeds your UK tax allowances, you will pay UK tax on it.

It's the same with the UK state pension in the UK, it is paid without tax being deducted, but a UK tax resident is still liable for UK tax on it if the rest of their income pushes them over their allowance.

There is a big difference between something being tax free and something not having tax deducted at source.

Sid

elusive
Resident
Posts: 1667
Joined: Sat Apr 07, 2012 11:49 am
Location: East of Malaga

Re: resident in Spain

Postby elusive » Thu Aug 20, 2015 10:09 pm

No problem cid. go for it. you have been wonderfully helpful to many of us


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