Residencia. Yes or No ?

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DesWalker
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Residencia. Yes or No ?

Postby DesWalker » Fri Jul 31, 2020 2:06 pm

Hi All,

I'm 50 yo and have owned a property in the Canaries for 7 years. I have an NIE, Spanish bank account, utility bills etc. Over the last 7 years I have spent about 25% of the time in this property and 75% in the UK where I am resident for tax purposes. The longest single stay I have ever spent in my Spanish place during this time is 35 days so I have never bothered with Residencia (aka Registro aka signing on at the Police Station). Out of pure laziness I have never signed on the Empadron either.

I do not want to move to my place permanently right now as I wish to remain tax resident in the UK for a couple more years and I have other responsibilities in the UK. But over time I would like the OPTION of moving out there full time and becoming tax resident in the process. Prior to any such permanent move I am very happy to adhere to the 90 days in any 180 days rule for non-Residents so that my UK tax residency is clear.

So I am trying to decide whether or not I should apply for Residencia prior to 31 December 2020. I am trying to figure out whether this relatively straightforward administration process will put me at an advantage should I wish to move permanently in a couple of years or whether the Spanish authorities will see it for what it REALLY is without also making the full tax resident move (namely little more than a registration with the police). If it were to afford me the OPTION of tax residency at a later date then I would certainly make the application....

The main issue I have is healthcare. I am well below pension age so the S1 route is not open to me. This means that to qualify for Residencia I am looking at paying for Private Health Insurance for an uncertain period of time. It could get quite expensive for something which may or may not be useful (Residencia) in achieving something which may or may not happen (my decision on a permanent move).

But I would be happy to pay these costs if I could be sure Residencia would be useful in giving me the OPTION of a permanent move in a couple of years time.

I would appreciate any thoughts on my situation. Prior to Covid, people have said that I should sign on for PHI, get my Residencia, cancel the PHI, continue travelling as a tourist with annual health insurance until such time as I am ready to make the permanent move. At that time the Residencia may or may not be worth the paper it is written on but at least it won't have been too expensive. I don't know whether this (dubious) scheme would be picked up by the authorities or not.

But now, after Covid, healthcare insurance costs will be much steeper. Also some people are saying that Residencia would now only be open to me by paying a year's PHI in advance to qualify, so it would be much more costly.

Many thanks for any thoughts.

Des

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Re: Residencia. Yes or No ?

Postby El Cid » Fri Jul 31, 2020 2:54 pm

Until you have been resident for 5 years and have got permanent residence right, you will lose your initial residency if you spend more than 6 months away from Spain.

If you kept to that rule, you would become tax resident so your plan has a major flaw. Permanent residency can only be lost after an absence of 5 years.

Sid

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Re: Residencia. Yes or No ?

Postby Wicksey » Fri Jul 31, 2020 3:06 pm

I may be wrong but surely becoming resident in Spain means that you would automatically be expected to do so for tax purposes as well? Is there a lesser form of residency other than the full tax resident version for people that live here full time?

Not sure if things are now more complicated for first time applicants as I have read that you need to get a certificate from the immigration office as you will now get a TIE card (for non-EU residents) rather than the old green card. https://www.citizensadvice.org.es/faq/i ... 1-12-2020/

As I understand it you cannot register on the Padron unless you are resident, as opposed to being just a visitor, even though you own your property there. Whether any of these rules are different for the Canaries I don't know.

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Re: Residencia. Yes or No ?

Postby elusive » Fri Jul 31, 2020 3:07 pm

This is obviously something alot of ppl are thinking about because of brexit to the point of there was a post/announcment in the C.A.B site that the spanish authorities are aware of many brits who are breaking the law by applying for residencia now when they have no intention of becoming residents at he time of applying inorder to avoid the post brexit rules.

imo you are asking for a huge amount of trouble if you apply for residents status (TIE) if you have not moved here full time. Hacienda will have a field day as even though you become tax resident offically six months after arrival in most cases they view you as tax resident once you have your residents card if before. heck i even know ppl who were still uk tax residents and have had to pay thousands in spanish tax because hacienda refuses all the evidence they have to say they had not moved to spain yet!

Hacienda have been having a field day since the exchange of info act came in in 2016 so considering they know what ppl are doing re applying before brexit then you can bet they will be looking very closely at new "arrivals" is it a risk you think is worth taking as you wont beable to defend any request for tax payments etc unless you claim you have been out of spain for 6 months in every tax year which would mean you lose your spanish residency rights.so its a no win for you. Becoming a spanish resident in all officaldom would make you lose your right to U.K NHS treatment aswell.

I guess some think its worth the chance if they know they could not afford to move to spain post brexit and this is their only chance. But personally i wouldnt want to spend years looking over my shoulder. You do it enough already here and thats when you do things by the book!

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Re: Residencia. Yes or No ?

Postby elusive » Fri Jul 31, 2020 3:13 pm

Wicksey wrote:
Fri Jul 31, 2020 3:06 pm
I may be wrong but surely becoming resident in Spain means that you would automatically be expected to do so for tax purposes as well? Is there a lesser form of residency other than the full tax resident version for people that live here full time?

Not sure if things are now more complicated for first time applicants as I have read that you need to get a certificate from the immigration office as you will now get a TIE card (for non-EU residents) rather than the old green card. https://www.citizensadvice.org.es/faq/i ... 1-12-2020/

As I understand it you cannot register on the Padron unless you are resident, as opposed to being just a visitor, even though you own your property there. Whether any of these rules are different for the Canaries I don't know.
Theres residency and tax residency. Two diff things. Fsay for example as a permanant resident i went back to the uk for a few years. I could keep my residency but i wouldnt be tax resident as i hadnt been in spain for 6 months of each of those few years i lived in the uk. Of course that would be on me to prove whe hacidenca came sniffing!!!
.

Some townhalls will sign anyone on the padron in order to get the money in but legally you shouldnt. Thats something else the taxman has been using as "proof" to go after ppl

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Re: Residencia. Yes or No ?

Postby costakid » Fri Jul 31, 2020 3:17 pm

Why not just apply when you are ready? The Spanish are not going to stop UK citizens moving to there country after brexit are they Sid?. If you were say 15 years old now but intended to move to Spain when your old enough to make that decision legally it would surely be the same process as for us oldies.

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Re: Residencia. Yes or No ?

Postby Wicksey » Fri Jul 31, 2020 3:28 pm

I didn't know that elusive. I am permanent but thought I'd lose it if I left the country for any length of time, not that I am considering that!

I guess that in the future any Brit wanting residency will simply apply for the TIE which appears to have already been introduced anyway. I would wait until you need to have it.

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Re: Residencia. Yes or No ?

Postby fyfin » Fri Jul 31, 2020 3:32 pm

Isn't the main problem the increase in income requirement from non EU residency applications?
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Re: Residencia. Yes or No ?

Postby elusive » Fri Jul 31, 2020 3:37 pm

costakid wrote:
Fri Jul 31, 2020 3:17 pm
Why not just apply when you are ready? The Spanish are not going to stop UK citizens moving to there country after brexit are they Sid?. If you were say 15 years old now but intended to move to Spain when your old enough to make that decision legally it would surely be the same process as for us oldies.
Maybe he wont have the yearly income levels to do so. Its alot unless you have a very good pension. It will totally change post brexit as brits will be non E.U its around 25k single and 30k a year as a couple to get a visa. Think it goes up on renewal aswell. I would think the majority of brits wont have pensions anywhere near that.

If you apply now you will get a TIE and you still come under E.U reg. But if you apply from next year you will have to show the income above etc

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Re: Residencia. Yes or No ?

Postby DesWalker » Fri Jul 31, 2020 7:53 pm

Hi All,

Firstly, very many thanks to all who have taken the time to reply.

My reticence to wait until I am sure is indeed the minimum income requirement. Right now it seems the only financial requirement for Residencia is €6k in a bank account which is bonkers if this document REALLY offers substantial rights to remain.

After 31 December this relatively small €6k sum will almost certainly change to something much more onerous. My situation is one of reasonable independent means (savings & investments) where I can afford to live modestly but my annual income from these will be nowhere near the annual income levels being mooted.

Regarding applying for Residencia if one does not intend to spend over six months in Spain per year (and hence become a tax resident too), I know several people who have done precisely this.

They have done this for two reasons, to (possibly) protect themselves after 31 December and also to get the benefits associated with the Residencia document (low cost travel between Canary Islands). Because they are all pensioners they have submitted their S1’s at the local Spanish surgery as part of the Residencia application but have been reassured by U.K. healthcare sources that such an S1 submission does not preclude them from receiving healthcare in the U.K. if they so wish.

None of these people are tax resident in Spain as they are currently spending less than 180 days there each year. If asked why they have taken out Residencia they point to the rule which asks a person to apply if they intend to spend more than 90 consecutive days in the country. They have either done this 13 week stay once or do it every year but they never spend more than 180 days in Spain to make them tax residents.

Basically I want what they’ve got but I’ve got to pay for healthcare....

Reading one reply above saying that in their experience the Hacienda assumes that all Residencia holders are fiscal residents is interesting and may well be true but it is not my observation. But I suppose if they did then it would be difficult to prove that one wasn’t a fiscal resident with total freedom of movement being possible at the moment. The reason these Residencia holders would always give to the Hacienda would be ...

“I was instructed to apply for Residencia because I spend more than 90 consecutive days in Spain even though I spend less than 180 total days in Spain. And because I spend less than 180 total days in Spain I am not a fiscal resident”.

Please keep the replies coming. If I’m not to give up on my ambitions to move to Spain permanently one day then I either hope that my financial circumstances will allow it at the time, or I cough up for PHI for a couple of years minimum, get the Residencia document asap and then pray that when the time comes the Residencia document has been worth it.

Thanks again.

Des

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Re: Residencia. Yes or No ?

Postby elusive » Fri Jul 31, 2020 8:31 pm

You are only supposed to apply for residence if you intend to make spain your habitual home and are moving here full time.its not to be filed cause you are for example spending a four month winter holiday here. If you do file for spanish residency you should then fill in a hmrc form telling them you are leaving the uk and becoming a non resident which leads to a loss of NHS care if not an OAP etc. In spain you have to prove you are innocent rather than them prove you are guilty. They see ignorance of the law as no excuse here.

As i said above i have friends who moved here in late 2014. They got residencia the early 2015. So under the law didnt become tax residents until 2015. Hacienda has accused them of been tax residents for 2014 and has fined/charged them several thousand euros in unpaid taxes and fines. Even though they were still working in the uk and have all docs showing they werent in spain hacienda refuses to accept anything. Its like trying to prove a negative. They are currently appealing but have been told it could take 4 years! In the mean time they have paid up.This is what they are like if you are unlucky enough to get picked on! So basically you would have to prove you werent tax resident which will be difficult because in doing so you will be giving them evidence to lose your resident status as you have been out of the country for more than 6 months.

If your friends are applying for residents status then spending less than six months in spain in any year then they will lose their spanish resident status but of course as with all things spain its whether you get caught out. many brits live here illegally but its funny how its now going the other way. Most live under the radar to avoid taxes,loss of health care now its gone the other way :crazy: Then theres issues of driving licences etc etc its easy now but come next year passports will be scanned and there will be a record..

As OAPs they are,as you say ok to use the NHS but not if you are under O.A.P age

As with most brits who live in spain you have to decide whether to do things by the book.the vast majority imo dont. At the end of the day its up to you to decide whether you want to take the risk. we can only advise on what the law says etc.

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Re: Residencia. Yes or No ?

Postby Enrique » Fri Jul 31, 2020 8:46 pm

Hi DesWalker,

"None of these people are tax resident in Spain as they are currently spending less than 180 days there each year. If asked why they have taken out Residencia they point to the rule which asks a person to apply if they intend to spend more than 90 consecutive days in the country. They have either done this 13 week stay once or do it every year but they never spend more than 180 days in Spain to make them tax residents."

Some yeas back the Rule was if you stayed 90 -180 days then you had to Apply for Temporary Resident

Certificado de registro de ciudadano de la Unión this is a Green Form

http://extranjeros.inclusion.gob.es/es/ ... index.html

So not Resident in the true sense.......... :?:
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Re: Residencia. Yes or No ?

Postby El Cid » Fri Jul 31, 2020 9:24 pm

costakid wrote:
Fri Jul 31, 2020 3:17 pm
Why not just apply when you are ready? The Spanish are not going to stop UK citizens moving to there country after brexit are they Sid?. If you were say 15 years old now but intended to move to Spain when your old enough to make that decision legally it would surely be the same process as for us oldies.
No, the Spanish will be happy to welcome Brits to become residents, as always, BUT the rules for qualifying for residency will change and be based on the current rules for non EU applicants, which are far more stringent that at present.

There is, of course, a possibility that they might relax the rules just for Brits, but that will depend on whether the UK government will reciprocate and relax their rules for Spaniards who would like the move to the UK.

Sid

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Re: Residencia. Yes or No ?

Postby DesWalker » Sat Aug 01, 2020 9:00 am

Hi Enrique,

As far as I am aware it is indeed this green Registro form (your link) that the people I know have got, and for some reason it is very often called Residencia down in the Canary Islands for reasons which have never been clear to me. It is this (to me) flimsy, easy-to-get document (simply requiring between 90 consecutive and 180 total days in the country, S1 or private health insurance and €6k in the bank) that gives these people the belief that they will be able to stay in Spain indefinitely should they so wish without any further financial check by simply starting to pay their taxes in Spain and becoming a fiscal resident.

I do not know of any other level of “Residencia” between this green Registro form and full fiscal residency. IF (big IF) getting the former before the end of the year affords me the option of getting the latter in a few years with no further income checks then it will be worth it. That’s the top and bottom of my questions....

Hi elusive,

Many thanks for your posts, they make very interesting and sobering reading. All I would say is I have no intention whatsoever of breaking the rules in Spain, but that doesn’t mean the Spanish authorities wouldn’t look to break the rules against me....

In simple terms, does signing on the “foreigners register” aka “Registro” aka “Residencia” now allow me to avoid the income requirements for fiscal residency in the future. Or am I spotting an apparent loophole where one doesn’t exist and wasting cash on PHI for no reason, whilst possibly putting me at risk of spurious claims of fiscal residency by the Hacienda ?

Thanks again,

Des

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Re: Residencia. Yes or No ?

Postby elusive » Sat Aug 01, 2020 9:46 am

Many thanks for your posts, they make very interesting and sobering reading. All I would say is I have no intention whatsoever of breaking the rules in Spain, but that doesn’t mean the Spanish authorities wouldn’t look to break the rules against me....
------------
Hi des. But you are breaking the law by filing for a residents permit when you are a uk resident and have no intention of becoming a spanish resident in the near future. As cid and others have said if you come here file for a residents permit then go back to the U.K for more than 6 months then your "spanish residency"is void anyway. The bottom line is you cannot have spanish residency and not have to pay tax in spain for the first five years.you cant do one or the other. Its both or nothing. Have a look on citizens advice spain f.book page,website. They are warning about ppl doing this due the spanish authorities becoming aware. at the end of day its upto you when its your only possible way of coming here full time but its not legal in any sense of the word.

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Re: Residencia. Yes or No ?

Postby AndyLucyOne » Tue Aug 11, 2020 9:28 pm

What "should" Brits living in the UK but owning a holiday home in Spain do (especially with regard to Brexit) ? By holiday home, I mean snatching the odd long weekend to spend in Spain plus a week or fortnight at a time for planned holidays ?

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Re: Residencia. Yes or No ?

Postby elusive » Tue Aug 11, 2020 10:18 pm

No need to do anything except make sure you dont break the 90/180 day law that will come in from january.

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Re: Residencia. Yes or No ?

Postby ashtondav » Thu Aug 27, 2020 4:39 pm

I presume they’ll start stamping passports to monitor the 90/180 rule. But what if you enter via shengen borders like France with no controls (or will they stop uk cars). It will effect us as we spend about 90 days apr-July and about 90 days sep-nov. I presume 180 days runs Jan to jun, jul to dec, so we will have to cut our July days appropriately.

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Re: Residencia. Yes or No ?

Postby gerryh » Thu Aug 27, 2020 4:59 pm

My understanding is the 180 days starts on the first day you arrive in Spain.
So you can be here for a max of 90 in that period.
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Re: Residencia. Yes or No ?

Postby Enrique » Thu Aug 27, 2020 4:59 pm

Hi ashtondav,

"But what if you enter via shengen borders like France with no controls (or will they stop uk cars)"...........France will Stamp your Passport on Entry so your 90 Days will start from then.......... who knows what the Final agreement will be come January .

You may even be able to get a Longer Stay Visa if you qualify ............after all the longer you stay the more Money is coming into the country.

Interesting times ahead.

Look at Uk Gov site.........

https://www.gov.uk/visit-europe-1-january-2021

Subscribe to the various Update Emails......... :idea:

There is still lots of "You May need "..................at the moment........ :)
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