Leaving Spain – What to do ? A checklist ?

Information and questions about the Law in Spain and Andalucia.
SanchoPanza
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Leaving Spain – What to do ? A checklist ?

Postby SanchoPanza » Thu Nov 03, 2016 5:28 pm

Hello All

I wonder if you might be able to help me out.

Unfortunately my dad died in Spain this year. My mum is still there. I live in the UK and so am not really very au fait with Spanish regulations and admin.

Mum is currently resident and tax resident in Spain. She owns a house which we have put on the market – but it looks unlikely that this will be sold before the end of the year. Mum is going to be leaving Spain at the end of this year. She is most probably going to Portugal for a few months at least.

I know that there will be a fair bit to do in terms of paperwork etc. but dad typically dealt with everything. My mum doesn't really have a clue and is also elderly and not in great health, so I am going to have to get everything done for her as far as possible. Not living in Spain – and being busy with life generally – makes this challenging but I am doing what I can.

I would like mum to renounce residency and become non-resident for tax at the end of this year. I know the latter is more a question of fact (as to whether you are/are not tax resident in Spain), but I intend to file a Modelo 030 before the end of this year anyway which I understand notifies the tax authorities that you have left Spain. I am not sure how that will go as we will not be in a position to show that she is tax resident anywhere else at that time and I understand that they may not "deregister" you from the Spanish tax system until you can show that you are resident elsewhere…..

In any case, I wondered whether there are any reputable advisers that could assist with what needs to be done in terms necessary paperwork for leaving Spain. Somebody has mentioned Abaco Advisers to me. If anyone has any experience of them, I would be grateful to hear it.

Equally, if anyone knows where I might find a good checklist of things to be done when leaving Spain, I would be most grateful if you could point me in the right direction.

All the best.
Last edited by SanchoPanza on Wed Nov 09, 2016 1:57 am, edited 1 time in total.

Pamela1
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Re: Leaving Spain – What to do ? A checklist ?

Postby Pamela1 » Thu Nov 03, 2016 5:55 pm

I'm sure someone on here who is very knowledgeable about affairs in Spain will answer your post and i hope you manage to get everything in order...I can appreciate how daunting it could be for anyone who found themselves in a similar position..

Best Regards to both you and your Mother.

SanchoPanza
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Re: Leaving Spain – What to do ? A checklist ?

Postby SanchoPanza » Thu Nov 03, 2016 6:27 pm

Thanks - yes, it is proving a bit difficult at the moment. We'll get there in the end I hope. Roll on 2017. 2016 has not been the best......

maureenscot
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Re: Leaving Spain – What to do ? A checklist ?

Postby maureenscot » Thu Nov 03, 2016 10:23 pm

Maybe you could employ a Gestor to do it all for your mother

Miro
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Re: Leaving Spain – What to do ? A checklist ?

Postby Miro » Fri Nov 04, 2016 4:12 pm

SanchoPanza wrote:intend to file a Modelo 030 before the end of this year anyway which I understand notifies the tax authorities that you have left Spain. I am not sure how that will go as we will not be in a position to show that she is tax resident anywhere else at that time and I understand that they may not "deregister" you from the Spanish tax system until you can show that you are resident elsewhere…..


I'm pretty sure you can't de-register without giving a new address in a new country of residence. Can you register your mother at your address in the UK? Presumably one can/ought to de-register from the Social Security as well - but surely that's not advisable until you are registered somewhere else first, i.e. back on the NHS? And then it probably happens automatically with sharing of information etc. these days. Maybe not so important if your mother already has an EHIC issued by the UK, which will cover emergencies while in Portugal.
I can't immediately think of anything else, but I'm interested to see if anyone comes up with a checklist, since we will some day be leaving too. I don't remember (it's quite a long time ago) doing anything when leaving the UK - we just went and didn't look back! But then, we never really severed all ties, since we are still UK citizens. Perhaps it's a bit different leaving Spain when you are a foreign resident?
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El Cid
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Re: Leaving Spain – What to do ? A checklist ?

Postby El Cid » Fri Nov 04, 2016 8:11 pm

Why are you in such a rush to deregister for tax? There may be tax issues, IHT and CGT, that are better handled while still being tax resident.

Sid

GerryinCajiz
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Re: Leaving Spain – What to do ? A checklist ?

Postby GerryinCajiz » Fri Nov 04, 2016 8:54 pm

Well put, but I think this is what the poster was after learning about. A steady hand on the tiller is always welcome and in this instance very accurate.
Gerry

SanchoPanza
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Re: Leaving Spain – What to do ? A checklist ?

Postby SanchoPanza » Wed Nov 09, 2016 2:14 am

Hi. Thanks for the replies and sorry for the delay - I have been internet-less for a few days.

There will be an income in Jan or Feb 2017. My understanding is Mum will not be tax resident in Spain in the 2017 tax year as she will not be there long enough - likely just a week or two (but certainly no more than 4 months whatever happens). In fact I don't think she will be tax resident anywhere at the time she receives the income.

I thought the modelo 030 had to be filed on leaving and it would seem to be of benefit if it helps confirm that mum is no longer resident in Spain so that the potential income is not taxable in Spain ? However I am not sure what to do if you do indeed have to demonstrate tax residency elsewhere at the time of filing - she won't be able to do this because, as I mentioned, I don't think she will be tax resident anywhere at the time.

IHT is now all dealt with now. Noted that it may be preferable to sell the house while tax resident to avoid cgt (I think ?) but this is not the main concern and cgt is not likely to amount to much.

It all seems a bit complicated right now !

Gasman
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Re: Leaving Spain – What to do ? A checklist ?

Postby Gasman » Sat Nov 12, 2016 1:42 pm

If Mum is going to Portugal "for a few months" will she be declaring herself as Habitually Non-Resident? and newly resident in Portugal as a pensioner? If so the Modelo 030 is the one to do, declaring that she is moving to Portugal. You need to investigate her possible status in Portugal as you may find it is worthwhile her staying there for a while .... She does not need to buy a house in Portugal, simply have proof of rental contract, and a bank account ASAP

What are her incomes in 2017 - if they are from property in Spain then they will be taxable in Spain anyway. If she has already declared herself in Portugal y 1/01/17 then any other income should be "Taxable" in Portugal, but most things they seem to allow tax-free under the NHR scheme.

Going direct back to the Uk would be a different kettle of fish, but if she is going to Portugal anyway, you need to check out her status there ...

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Re: Leaving Spain – What to do ? A checklist ?

Postby SanchoPanza » Tue Nov 15, 2016 7:29 pm

Thanks for the reply

To be honest I have no idea about the rules and regs in Portugal. She was just going to go there until the UK summer to stay with some friends, so I imagine she was not intending to do any of that - I heard of this only fairly recently. Now I am not even sure if she will be going at all. Currently it looks like she is likely to stay in Spain until spring and then return directly to UK most likely at the end of April. It is a bit up in the air but looks like it will be one or the other of these two options - most likely the latter.

Her income in 2017 will just be her minimal state pension and cashing in an investment - I am not certain of its value but it is significant (probably around 90,000 or so) and would no doubt give rise to an income tax if she is considered tax resident in Spain or the UK but I cannot see how she will be resident in either if she leaves Spain say mid April...

In any case, I think I have identified at least 3 things to do:

1) Cancel Empadronamiento - letter cancelling the certificate of Empadronamiento
2) Cancel Residency (i.e. the Green Resident certificate) with the local police station
3) File a Modelo 030 with the tax authorities (although unclear what to say the new address is, as my mum wont have one and mine is about to change. I could use my brother's address in Singapore I guess). Speaking to the tax authorities would be useful but hard to do while I am not in Spain.

elusive
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Re: Leaving Spain – What to do ? A checklist ?

Postby elusive » Tue Nov 15, 2016 8:54 pm

she is considered tax resident in Spain or the UK but I cannot see how she will be resident in either if she leaves Spain say mid April...
------------------

Spanish tax year is jan-jan . As said earlier i think if shes still resident in spain in jan 2017 that makes her tax resident for the whole year regardless of when she leaves spain ie april. We had some neighours who left recently and they were advised to make it as easy as possible leave at the end of the year so you are out of the country when the new year rings in.you then have less issues with the whole double tax

SanchoPanza
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Re: Leaving Spain – What to do ? A checklist ?

Postby SanchoPanza » Tue Nov 15, 2016 10:42 pm

Ah, thanks.
I had thought that you needed to be in Spain for 180 something days to be considered tax resident there, however I can imagine there is some small print around this. Would have been nice not to be taxed on the investment cashing but hey ho what can you do...

El Cid
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Re: Leaving Spain – What to do ? A checklist ?

Postby El Cid » Tue Nov 15, 2016 11:30 pm

elusive wrote:
Spanish tax year is jan-jan . As said earlier i think if shes still resident in spain in jan 2017 that makes her tax resident for the whole year regardless of when she leaves spain ie april.



No, the 183 day rule still applies. You are confusing it with the fact that if you break through the 183 days in a year, then you become tax resident for the whole year.

That said, it may be difficult to convince Hacienda that you are no longer tax resident unless you can show that you are tax resident somewhere else. HMRC often takes the same attitude.

Sid

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Re: Leaving Spain – What to do ? A checklist ?

Postby El Cid » Tue Nov 15, 2016 11:32 pm

SanchoPanza wrote: Would have been nice not to be taxed on the investment cashing


It rather depends on what exactly you are cashing in.

If the investment is worth 90k than I sincerely hope that it was declared on Form 720, ie the asset declaration requirement.

Sid

SanchoPanza
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Re: Leaving Spain – What to do ? A checklist ?

Postby SanchoPanza » Wed Nov 16, 2016 9:53 am

Thanks

Sounds like there would be consequences if that wasn't done....
To be honest I don't know what that is (and nor will my mum as dad dealt with everything). That said dad was always very correct so I am sure he did whatever was required. I will try to check up on that.

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Re: Leaving Spain – What to do ? A checklist ?

Postby El Cid » Wed Nov 16, 2016 10:59 am

There is a lot of info about it in the forum FAQs.

viewtopic.php?f=42&t=30699

Sid

Miro
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Re: Leaving Spain – What to do ? A checklist ?

Postby Miro » Wed Nov 16, 2016 12:24 pm

I don't think Sancho actually said where the the 90K investment is - if it's in Spain, then it wouldn't need to be declared on a 720. If it's not, and wasn't declared, personally I wouldn't touch it until I'm firmly tax resident back in the UK!
With regards the timing - if she moves (or declares herself UK resident) mid-April, am I right in thinking that she could effectively be tax free for 3 months, since she wouldn't be tax resident in Spain for Jan-Dec 2017 having not hit the 183 days, but also would only be taxed in the UK from April 5th onward? I'm sure I've read something to that effect before. Not that I suppose it would make a massive difference to most people anyway, just wondering....
Don't worry about what people think, they don't do it very often

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Re: Leaving Spain – What to do ? A checklist ?

Postby El Cid » Wed Nov 16, 2016 12:30 pm

The tax free period certainly applies when moving from the UK to Spain. The optimum time to leave the UK is at the beginning of July, as you stop being tax resident the day you leave, but don't become tax resident in Spain until the following year.

I am pretty sure it also works in reverse.

It could make a big difference if you take a lump sum in the tax free period.

Sid

SanchoPanza
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Re: Leaving Spain – What to do ? A checklist ?

Postby SanchoPanza » Wed Nov 16, 2016 1:07 pm

Thank you both. That sounds like some good news.
The 720 thing sounds like it could potentially be bad news, although I think my dad would have done what was required. I will just need to check somehow. On the off chance he did not it seems like there is little that could be done to rectify it anyway (I have been searching the posts on here). He was super organised and "correct" so I am sure he did what he should have done

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Re: Leaving Spain – What to do ? A checklist ?

Postby El Cid » Wed Nov 16, 2016 1:14 pm

I agree with Miro, just leave it until you are back in the UK and most certainly don't let the proceeds go anywhere near a Spanish bank.

Sid


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