Moving from UK to Spain - basic tax questions!

Information and questions about the Law in Spain and Andalucia.
Yankee
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Location: UK

Moving from UK to Spain - basic tax questions!

Postby Yankee » Sat Jul 28, 2018 12:40 pm

Hi all,

I am currently in the UK but will be relocating to Spain in September. Staying employed within the same company, but they haven't been able to clarify some important questions. I would appreciate if you could shed some light on these!

I tried to summarise below the information I found on this forum and elsewhere. Could you let me know if my understanding is correct?

1) I assume I will pay taxes in the UK until August included. From September, I will start paying taxes in Spain instead of the UK. Is this how this works or are there periods of overlap?
=> I assume I need to notify HRMC to stop paying taxes in the UK after I have moved
=> I need to get a social security number in Spain to start paying taxes (income tax, social security etc.) from September

2) I assume I will become a non-resident in Spain for the first 6 months and pay flat IRPF rate of 19% (before becoming resident in 2019).

3) Can I claim a tax adjustment in the UK? My earnings from April 2018 to Aug 2018 have been taxed at an estimated annual rate. Given the progressive taxation, this means I have paid to much taxes on these five months.

4) I heard that Spain was not splitting fiscal years. What does this mean? Will I need to pay something to the Spanish government for the period January 2018 to August 2018 (when I was in the UK)?

5) After becoming resident in 2019, are there adjustments (in June 2019) for taxes paid in Spain from September 2018 to December to the progressive scale? Or does this period remain at the non-resident rate?

6) How will I be taxed in 2019? I should become resident after 6 months (so in March 2019). Am I considered non-resident until then, and the resident taxation kicks in afterwards?

Thanks in advance...!

elusive
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Re: Moving from UK to Spain - basic tax questions!

Postby elusive » Sat Jul 28, 2018 1:39 pm

Alot more complicated re paying tax. Maybe even more so as you are working and its not the standard practice of an O.AP pension.cid and the other experts will qualify im sure. You become tax resident after you have been in spain for 6 months but then depending on when you arrived you could be tax resident for that entire year. Tax year here is jan to jan so for example you arrive in spain in sept 6 months later you become tax resident in march 19.but that means you are classed as spanish resident for jan and feb 19 aswell. You file your first tax return in june 2020 that covers the 2019 tax year. Until you file your first spanish tax return you will keep paying uk income tax.when you file your spanish tax return you will get a certificate saying you are a spanish tax payer. You send that to HMRC along with a double taxation hmrc form.and then hmrc will send you a rebate for the time you paid double tax ie jan-march 2019 hmrc will then give you a N.T no tax paye code so you get paid tax free in tr U.K and you then delcare your income here every june and pay the income tax here. Hopefully thats right as it pertains to working rather than a pension.apologies if not

Yankee
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Joined: Sun Jul 22, 2018 8:26 pm
Location: UK

Re: Moving from UK to Spain - basic tax questions!

Postby Yankee » Sat Jul 28, 2018 10:05 pm

Thanks. I did further research to understand exactly your message. May I clarify this?
elusive wrote:You file your first tax return in june 2020 that covers the 2019 tax year. Until you file your first spanish tax return you will keep paying uk income tax.when you file your spanish tax return you will get a certificate saying you are a spanish tax payer.
I assume I am currently a UK fiscal resident for April 2018-19 (to quote HRMC "as my only home was in the UK, rented for more than 91 days"). So I should continue to pay UK income tax for this fiscal year? This includes revenues earned in Spain between September 2018 and March 2019?

Will I also pay income tax in Spain as a non-resident over this period then?
And then be re-imboursed by the Spanish authorities for double taxation between September 2018 and December 2018?
And later on, be-reimbursed by the UK for double taxation between January 2019 and March 2019, when I will be Spanish resident?

The certificate saying I am Spanish tax payer - would it come in March 2019 (after 6 months) or in June 2020 (at the first Spanish tax return)?

Apologies if this sounds complicated. I have spend hours browsing the web and am struggling to find clear info!

Gasman
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Location: Huelva province

Re: Moving from UK to Spain - basic tax questions!

Postby Gasman » Sun Jul 29, 2018 11:51 am

One basic problem you have to sort out is the anomaly of the tax years - spain being Jan-Dec and UK being April 6-April 5.
You need to find yourself a competent Gestor/Tax expert in the area you will be living in when you get to Spain in September. And take advice before you leave in the UK, perhaps your company can assist with this?
In June 2020 you will be declaring everything you have earned, worldwide, for the spanish tax year 2019, in Spain. So in theory you will be paying tax in the UK (as an expat but not yet fiscally resident abroad) for the period September to Dec 2018. At some point you will be declaring to the UK that you have moved abroad - this is important for a number of tax reasons, but essential too to show eventual non-residency in UK. Perhaps they can then advise you as to how to make the cut-off for the UK taxation December, rather than the following April. If all else fails, do not worry as there is a double-taxation-agreement between UK and Spain (even Brexit should not affect this as it is between the two countries, not as EU countries) so if you do end up paying in both countries for Jan to April, you will be able to claim it back.
As to becoming resident in Spain, you can apply, as knowing that you are going to be resident rather than temporary-stay, as soon as you arrive. Your Gestor will help with this. You WILL be tax-resident after 6 months whether you like it or not, it is not an option. However if you apply straight away for residency that will give you access to the possibility of health care for you and dependants, if you have any, and of course the all-important NIE number - the NIE is the equivalent of the UKs National Insurance number and Tax number rolled into one - you have to quote it for practically everything over here, so it is the FIRST thing you need. Also with your residency, you can sign on to the Padron of your local town, which also simplifies a lot of things administrative.
Since you have some time to get organised, you also need to consider tax-consequences of various items that may or may not be applicable to your particular circumstances - international advisers can help with this ... consider Blevins Franks as an option - I know several Forum members have taken their advice. https://www.blevinsfranks.com. Or your firm may have advisers for you?

Is there a special regime here in Spain for people employed by out-of-the country companies, yet resident in Spain - perhaps someone else can advise on this... please

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

Re: Moving from UK to Spain - basic tax questions!

Postby elusive » Sun Jul 29, 2018 11:54 am

Presuming you are been paid as a PAYE employee (standard worker) You keep paying uk income tax until you file your first spanish tax return in june 2020.nothing will happen with your uk tax code until you can prove you are paying tax in spain.you eill be able to prove this when you file your first spanish tax return in june 2020 and at that point you will get your certificate statibg you are paying spanish tax. Theres no non resident spanish income tax so to speak interms of your income. You keep paying it in the uk until you become a spanish tax resident which is six months after you arrive and until you file your first spanish tax return which will be for the 2019 tax year which is filed in 2020.the only rebate you will get is from hmrc as you will only pay spanish tax when you file your first tax return in spain then you reclaim from hmrc for the overlap for the begining of 2019


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