Visa residency options

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ashtondav
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Visa residency options

Postby ashtondav » Tue Jun 22, 2021 6:01 pm

We would like to stay in Spain for up to 6 months in one go. Not possible under the new rules. We would never exceed 180 days a year.

Am I correct in saying that the non lucrative visa demands a stay of longer than 183 days and therefore I become tax resident? For my income and tax advantageous uk accounts that would be prohibitive - or rather expensive!

So are there any other options for someone who wants to stay 180 days (every year) but not be tax resident (183 days).

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Enrique
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Re: Visa residency options

Postby Enrique » Tue Jun 22, 2021 8:05 pm

Hi ashtondav,

"Also, the non lucrative visa Spain holder becomes tax residents since they must stay for not less than 180 days a year for it to be renewed. Therefore, they should pay income tax on their income that is generated worldwide"

Ref:: https://myspainvisa.com/non-lucrative-visa-spain/

I'm guessing a lot of Members will be interested in how to stay for the 180 days/year as per the old Temporary Residence Green Form .
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Re: Visa residency options

Postby El Cid » Tue Jun 22, 2021 8:37 pm

A golden visa is about the only option at present.

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ashtondav
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Re: Visa residency options

Postby ashtondav » Wed Jun 23, 2021 1:00 pm

Yes, I was afraid you’d say that. Oh well...

... and to think 5 years ago today we voted to leave.

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Re: Visa residency options

Postby Paddy Pumpkin » Wed Jun 23, 2021 2:11 pm

I presume you are a UK citizen and don't hold any other passports.

First bit re tax residency. It is possible to be deemed a tax resident in Spain without spending 180 days in Spain. It is possible to be non tax resident even if you spend more than 180 days in Spain. Read article 4 of the double taxation treaty for more info as it may help you first set out where you are/will be tax resident as you may be mis interpreting the rules.

Also I would get your potential tax bill confirmed. Spain on paper appears very high but has so many reductions and allowances that it can be very low. My personal effective tax rate is sub 10 %, and it could be sub 5% if I pushed it. So check out what is possible for you.

Having said the above as Sid says the best visa is the golden visa option. There is no residency requirement and you can (must) use a property you own before applying for the visa.

The non lucrative visa conditions together with the double tax treaty make it next to impossible for you to take out a non lucrative and not be tax resident in Spain.

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Re: Visa residency options

Postby pepe jose » Wed Jun 23, 2021 2:47 pm

Paddy Pumpkin wrote: Wed Jun 23, 2021 2:11 pm I presume you are a UK citizen and don't hold any other passports.
Having said the above as Sid says the best visa is the golden visa option. There is no residency requirement and you can (must) use a property you own before applying for the visa.

Or if you do not own a property a million euros on deposit in a Spanish bank is also acceptable.

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Re: Visa residency options

Postby ashtondav » Thu Jun 24, 2021 3:41 pm

Paddy Pumpkin wrote: Wed Jun 23, 2021 2:11 pm I presume you are a UK citizen and don't hold any other passports.

First bit re tax residency. It is possible to be deemed a tax resident in Spain without spending 180 days in Spain. It is possible to be non tax resident even if you spend more than 180 days in Spain. Read article 4 of the double taxation treaty for more info as it may help you first set out where you are/will be tax resident as you may be mis interpreting the rules.

Also I would get your potential tax bill confirmed. Spain on paper appears very high but has so many reductions and allowances that it can be very low. My personal effective tax rate is sub 10 %, and it could be sub 5% if I pushed it. So check out what is possible for you.

Having said the above as Sid says the best visa is the golden visa option. There is no residency requirement and you can (must) use a property you own before applying for the visa.

The non lucrative visa conditions together with the double tax treaty make it next to impossible for you to take out a non lucrative and not be tax resident in Spain.
[/quote

Thanks. It’s the income tax on final salary pensions that kills it. Thanks for the responses.

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Re: Visa residency options

Postby elusive » Thu Jun 24, 2021 6:36 pm

Is it an annuity ashtondav? As they are taxed differently at lower rates

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Re: Visa residency options

Postby ashtondav » Fri Jun 25, 2021 8:57 am

No, not annuities. Final salary pensions so treated the same as employment income, with none of the advantages of annuity or private pension provision. It means the tax penalty of fiscal residence is prohibitive sadly. But we’re not complaining - we’re lucky to have such a “problem” and happy to enjoy Spain 90/180 if that’s the only deal on the table. It just means more frequent, shorter visits.

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Re: Visa residency options

Postby Wicksey » Fri Jun 25, 2021 9:22 am

When you say final salary pensions they aren't public sector pensions are they, civil service/local government ones? They aren't taxed here.

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Re: Visa residency options

Postby Free at Last » Fri Jun 25, 2021 9:57 am

Contrary to popular belief, there are final salary pensions which aren't public sector ones, so as Ashtondav says, they are treated as employment income for Spanish tax purposes. I have one of each, one not public sector and one Civil Service, but unfortunately for me the Civil Service one is by far the smaller of the two. It has been OK whilst I was just receiving my occupational pensions but once I start to receive my state pension as well, my tax bill in Spain is going to be 10 times at least what it is this year. Won't make any difference to my desire to live here, though.

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Re: Visa residency options

Postby peteroldracer » Fri Jun 25, 2021 10:27 am

elusive wrote: Thu Jun 24, 2021 6:36 pm Is it an annuity ashtondav? As they are taxed differently at lower rates
Be aware that it is not as straightforward as that. If the annuity was bought with tax-paid money then this can apply, but if the annuity pot is from an employers pension then the pension is just a taxable income. Many people have been caught out by this, as the tax authorities are well aware of this - along with "civil service" pensions that are not amongst those classified as exempt.
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Re: Visa residency options

Postby Wicksey » Fri Jun 25, 2021 11:13 am

https://www.gov.uk/hmrc-internal-manual ... intm343040

Our tax lady referred us to this info listing what counts, or not, for a civil service/local government pension.

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Re: Visa residency options

Postby elusive » Fri Jun 25, 2021 3:35 pm

peteroldracer wrote: Fri Jun 25, 2021 10:27 am
elusive wrote: Thu Jun 24, 2021 6:36 pm Is it an annuity ashtondav? As they are taxed differently at lower rates
Be aware that it is not as straightforward as that. If the annuity was bought with tax-paid money then this can apply, but if the annuity pot is from an employers pension then the pension is just a taxable income. Many people have been caught out by this, as the tax authorities are well aware of this - along with "civil service" pensions that are not amongst those classified as exempt.
Yeah thats very true. Of ours. One is,one isnt but my comment was just about it being something for the O.P to look into if they werent unaware at all about annuities

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Re: Visa residency options

Postby olive » Fri Jun 25, 2021 5:57 pm

You live and learn. Our gestor is adamant that our annuity should be taxed differently.

My confidence in matters tax Spanish is at an all time low having been walloped by Hacienda for under payment in 2016. Hacienda used P60 figures to contradict actual received for the calendar year. At least I can console myself with having helped Spains Covid Recovery plan.

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Re: Visa residency options

Postby Wicksey » Fri Jun 25, 2021 6:05 pm

Couldn't you have used bank statements to prove what you received that year? Our figures never match as we get a pay rise in the middle of April and so we have 3.5 months at a lower rate and the rest at the higher rate for the Spanish return Jan-Dec, whereas for the UK it is the higher rate April to April.

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Re: Visa residency options

Postby olive » Fri Jun 25, 2021 8:10 pm

We tried all of that. No appointments due to pandemic. Could challenge it but that costs 2000. Interestingly they did send me a letter recorded delivery but it was recalled undelivered as it was the day we left to avoid pollen season. In the UK I would have gone to a newspaper or ombudsman but I long ago gave up challenging Spanish bureaucracy. Life is too short.

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Re: Visa residency options

Postby peteroldracer » Fri Jun 25, 2021 10:50 pm

It shows how important it is to be in the loop with Agencia Tributaria, DGT and similar.
We were in the UK when a message came telling us there was a communication for us from the taxman. This came because we had registered with the site(s). The message gave us an appointment with them to discuss a problem (wanted justification of a civil service pension) a couple of weeks hence. Failure to attend or arrange another appointment within a short time would incur penalties and fines.
Because we had registered we were able to respond, and fix an appointment comfortably after our scheduled return to Spain - when I was able to satisfy them that herself had worked for HMRC so definitely a government exempt pension, declared correctly.
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Re: Visa residency options

Postby Wicksey » Sat Jun 26, 2021 10:06 am

We were told it's my OH's local government pension that may be queried as his P60 doesn't show what it is, and the name of the local authority he worked for doesn't mean anything to the Spanish tax office. My P60 is from Civil Service Pensions and is easier to understand that it is exempt, from what our gestoria says. She asked for some other details in advance just in case she is asked. That's why we pay her to do everything as I'm sure she'd sort out any enquiry a lot quicker than we would be able to. Whilst we have a rental property we shall keep to using her.


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