To reside or not to reside...

Information and questions about the Law in Spain and Andalucia.
Free at Last
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Re: To reside or not to reside...

Postby Free at Last » Sun Mar 12, 2017 8:12 pm

When you say your pension is taxed in the UK, is it a Crown pension? If so, you don't need to worry as it can only be taxed in the UK so no Spanish income tax to pay on it (although if you had any other income, you would still need to declare it and the Crown pension could affect your marginal rate of Spanish tax). If it isn't a Crown pension, then you would need to declare it in Spain and pay the difference between the tax already paid in the UK and the amount of Spanish tax due.

Once you have submitted a Spanish tax return you can get a double taxation form from HMRC which, if completed and stamped by Hacienda, will mean you can be allocated an NT (no tax) tax code in the UK and receive your pension gross, just paying the Spanish tax annually when due. Some Hacienda offices won't complete this form but will issue you with a Certificate of Fiscal Residence which confirms you are a Spanish taxpayer, which I believe is accepted by HMRC for this purpose.

If you arrived in Spain to live after 1 July 2016 (provided you hadn't spent any time in Spain earlier that year) you wouldn't have been tax resident in 2016, so you won't need to worry about submitting your first Spanish tax return until May/June 2018, the return would be for the year 1 January-31 December 2017.

If you'd rather not pay a gestor or accountant to complete your tax return, and you're not comfortable completing it yourself online, there is a service whereby you can make an appointment at the Hacienda office (in your case in Vélez-Málaga) and they will complete the return online, (free of charge) from the income figures you supply (they don't ask for any documentary proof of income, it is up to you to declare it honestly) and ask you to sign a direct debit mandate if you want to pay by direct debit. You can pay in one single instalment or two separate ones.

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Re: To reside or not to reside...

Postby Unicorn » Sun Mar 12, 2017 8:27 pm

PavAmber

It is hard to know from who you should take advice, but I wold say it should be almost never from a pack/horde in a bar, unless it is on the price of a pint. Some people are happy to be here/work illegally but if you have a stake as a property here it is worth following the rules. Come Brexit I would suspect that first out are the 'under the radar' lot, as, certainly in my experience, they are the ones disliked by the Spanish. Not unlike the British not liking the same in their own country.
People may think they are under the radar but over the years I have seen the authorities/police suddenly doing blitzes out of the blue, be it on long term Brit reg cars, illegal employment (typically sales & bar, catering) operations. Particularly in smallish communities police etc are normally well aware who is around, who lives there full time. And have known people hauled into the police station for ages - very scary if they, as is all too normal, do not speak Spanish.
The authorities here can be really scary and can come down on you like a ton of bricks with swingeing, quite eye-watering fines. Ignorance is no defence, the onus is on you to know the law, pay your dies, car tax or whatever. Not receiving a bill is no defence either. You have to chase your bills.

I would suggest you make a list of what has to be done and paid, and when, and tick them of systematically every year.

Good luck, and sleep easily at night!

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Re: To reside or not to reside...

Postby Free at Last » Sun Mar 12, 2017 8:34 pm

Just one additional thing - in order to register as residents it would be advisable for you to have a lump sum in your Spanish bank account in addition to your pension income of €1200 per month, as that amount is just on the borderline of the minimum normally asked for (€600 per person per month). If the exchange rate falls further following the triggering of Article 50 your income could drop below the minimum, plus I have seen reports recently saying that applicants in some areas have been asked for higher income following the 8% rise in the Spanish minimum wage from 1 January this year.

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Re: To reside or not to reside...

Postby markwilding » Sun Mar 12, 2017 9:32 pm

Miro wrote:Or interest on savings
(remember that?)

I have to declare interest on savings but it gets nowhere near the threshold. I pay tax on the interest here.

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Re: To reside or not to reside...

Postby El Cid » Sun Mar 12, 2017 10:45 pm

I didn't say it wasn't taxed. It is taxed in Spain. Mark is right that any income arising in the UK is taxed in the UK irrespective of tax residency, but pensions are one of the exceptions.

Your UK pension will cease to be taxed in the UK after you have sorted this out with HMRC.

If your private pension is a money purchase annuity, then it may be eligible for very significant tax reductions.

There are more details about Spanish income tax in the FAQs.

viewtopic.php?f=42&t=27576

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Re: To reside or not to reside...

Postby Free at Last » Mon Mar 13, 2017 11:09 am

PavAmber wrote:We have since seen a number of "the horde" again and, whilst not true of all, it appears quite a number don't have a foot in the UK and Spain but have simply stayed under/off the radar for some spectacular amounts of time in some cases!



If those who have been here for years but have stayed under the radar had been registered as residents and submitting tax returns in 2012, then since that date they would have been entitled to free state healthcare in Spain, after the rules were changed to extend that benefit to people "sin recursos" (ie not entitled to healthcare paid for by their country of origin). As those people weren't registered, they were unable to take advantage of that. An object lesson in how crime doesn't always pay. :lol:

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Re: To reside or not to reside...

Postby wollie » Mon Mar 13, 2017 11:23 am

Free at Last wrote:Just one additional thing - in order to register as residents it would be advisable for you to have a lump sum in your Spanish bank account in addition to your pension income of €1200 per month, as that amount is just on the borderline of the minimum normally asked for (€600 per person per month). If the exchange rate falls further following the triggering of Article 50 your income could drop below the minimum, plus I have seen reports recently saying that applicants in some areas have been asked for higher income following the 8% rise in the Spanish minimum wage from 1 January this year.


Just out of courisity could this be got around bu having the account in the name of one person other than joint account.
I do not have Spanish bank account.

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Re: To reside or not to reside...

Postby Free at Last » Mon Mar 13, 2017 12:45 pm

I don't see how, because if a couple wish to register as foreign residents they have to show the required minimum level of income for each person, regardless of whether the money is going into a joint account or two individual accounts.

If you were to apply to register you would definitely need to have a Spanish bank account as there must be evidence of the funds being held/transferred into a Spanish account.

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Re: To reside or not to reside...

Postby PavAmber » Tue Mar 14, 2017 12:34 pm

Interesting on the income front for Residencia, the advice from both our solicitor and extranjeros office at the town hall has been to take evidence of just owning our property without mortgage instead of income details.

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Re: To reside or not to reside...

Postby Free at Last » Tue Mar 14, 2017 12:44 pm

PavAmber wrote:Interesting on the income front for Residencia, the advice from both our solicitor and extranjeros office at the town hall has been to take evidence of just owning our property without mortgage instead of income details.


I remember that one member of the forum did get around having something of a shortfall in the minimum amount of income required by providing a copy of their escritura to show they owned a mortgage-free property, but I've never heard of that being accepted as the sole proof of having sufficient resources not to become a burden on public funds.

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Re: To reside or not to reside...

Postby HarryJ » Tue Mar 14, 2017 12:50 pm

Is this a new thing? As when I applied and got my residencia in Feb 2016 I was not asked for proof of income or any bank statements whatsoever. Just took my completed EX18 escritura, passport and pics, padron and I did show that I had full private medical though

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Re: To reside or not to reside...

Postby Free at Last » Tue Mar 14, 2017 1:08 pm

No, it's been in force since July 2012, so I have no idea why you weren't asked. Perhaps they thought you looked prosperous!

https://www.gov.uk/guidance/residency-r ... s-in-spain

The amount needed isn't written down anywhere because the Spanish regulations (which you can see by clicking on the link in the UK Government website above) say that each case must be determined according to personal circumstances, but the €600 per person per month (or at least €6000 in a Spanish bank account) seemed to become the general rule of thumb, although there have been reports of varying amounts being asked for in different areas around the country.

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Re: To reside or not to reside...

Postby PavAmber » Tue Mar 14, 2017 1:12 pm

Free at Last wrote:
PavAmber wrote:Interesting on the income front for Residencia, the advice from both our solicitor and extranjeros office at the town hall has been to take evidence of just owning our property without mortgage instead of income details.


I remember that one member of the forum did get around having something of a shortfall in the minimum amount of income required by providing a copy of their escritura to show they owned a mortgage-free property, but I've never heard of that being accepted as the sole proof of having sufficient resources not to become a burden on public funds.


We will see I guess! Was in Nerja yesterday and picked up some "how to" forms from their foreigners office. They clearly suggest taking your deeds rather than bank/income info.

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Re: To reside or not to reside...

Postby HarryJ » Tue Mar 14, 2017 2:57 pm

Free at Last wrote:No, it's been in force since July 2012, so I have no idea why you weren't asked. Perhaps they thought you looked prosperous!

https://www.gov.uk/guidance/residency-r ... s-in-spain

The amount needed isn't written down anywhere because the Spanish regulations (which you can see by clicking on the link in the UK Government website above) say that each case must be determined according to personal circumstances, but the €600 per person per month (or at least €6000 in a Spanish bank account) seemed to become the general rule of thumb, although there have been reports of varying amounts being asked for in different areas around the country.

I can assure you that in no way could you look at me and think "he looks prosperous" :D However having had a look at the new rules link you supplied by the u.k gov site they write and I quote

" Under the new rules, EU citizens applying for residency in Spain may be required to produce evidence of sufficient financial means to support themselves (and dependants). Applicants may also be asked for proof of private or public healthcare insurance"
The all important words here seems to be "MAY BE", as I said I wasn't and even the private medical document I took received only a cursory glance.

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Re: To reside or not to reside...

Postby Free at Last » Tue Mar 14, 2017 3:19 pm

Here's the example I was thinking of earlier where a forum member was able to provide proof of a mortgage free property to help with her application to register.

viewtopic.php?f=22&t=31523&p=302736#p302736

That was at Torre del Mar, the same office which Harry J would have used, so why things should be so different between two people I have no idea.

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Re: To reside or not to reside...

Postby elusive » Tue Mar 14, 2017 3:31 pm

PavAmber wrote:Interesting on the income front for Residencia, the advice from both our solicitor and extranjeros office at the town hall has been to take evidence of just owning our property without mortgage instead of income details.



I think thats normal. When we did ours it was either show your income or show proof of owning a property

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Re: To reside or not to reside...

Postby HarryJ » Tue Mar 14, 2017 3:38 pm

Yes to Torre Del Mar.....so reading that link like myself they weren't asked for proof of income, lump sum in bank etc, they just settled on Nota Simple....so not that different to myself them...did note they didn't even take the paperwork saying they'd signed on the Padron. As the poster says "there doesn't seem to be any hard and fast rules, all a bit vague to be honest. These €600 and €6k in bank "guestimate" figures are just that and a bit like Chinese Whispers

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Re: To reside or not to reside...

Postby Free at Last » Tue Mar 14, 2017 3:50 pm

This extract from the link doesn't sound as though they were completely disinterested in the income details, to me:-

"The very nice lady behind the desk at the police station did have a quick look at our bank statements etc. but there was pursing of lips and shaking of heads. (Heads, plural - there was also, fortunately for us as my Spanish is still iffy, an interpreter there, a really lovely helpful woman.) She said we needed a statement from the U.K. pensions office saying what our monthly and yearly payments were, translated into Spanish.

I think I must have had my wild-eyed, about to burst into tears face on, as - after some discussion - it was decided that if we could come back with a current Nota Simple proving that there were no charges on the property, together with our other documents, our applications would be approved."

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Re: To reside or not to reside...

Postby HarryJ » Tue Mar 14, 2017 4:03 pm

It sounds exactly as I said..... they had a quick look at bank statements and shook their heads and discarded them agreeing a "NOTA SIMPLE" would suffice. Even clarifying that point later in their post with all the documentation they actually supplied
"
The documents we submitted were - 3 copies each of the EX18 forms, 1 copy each of the passports, 1 copy each of our S1 forms, a copy of the Nota Simple, the modelo 790 bank payment forms (we paid at the Cajamar branch near the Registro de Propiedad) The cost is 10 euros 40 each. We were given a copy each of our receipted 790 forms.


NO Banking information in that list that I can see!

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Re: To reside or not to reside...

Postby Free at Last » Tue Mar 14, 2017 4:18 pm

The €600 per month figure was arrived at based on this part of the Spanish regulations governing the application to register process:-

"La valoración de la suficiencia de medios económicos se efectuará de manera individualizada y, en todo caso, teniendo en cuenta la situación personal y familiar del solicitante. Se considerará acreditación suficiente para el cumplimiento de este requisito la tenencia de recursos que sean superiores al importe que cada año fije la Ley de Presupuestos Generales del Estado para generar el derecho a recibir una prestación no contributiva, teniendo en cuenta la situación personal y familiar del interesado."


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