Changing Tax Region

Information and questions about the Law in Spain and Andalucia.
Paddy Pumpkin
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Changing Tax Region

Postby Paddy Pumpkin » Tue Dec 15, 2020 9:06 pm

When does your tax residency change when you move house between regions?

Say I move from Madrid to Andalucia in November 2021, when I complete my tax in April 2022 where do I pay taxes? In Madrid or Andalucia?

Does the change take effect from the day I tell the Hacienda I moved?

elusive
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Re: Changing Tax Region

Postby elusive » Wed Dec 16, 2020 7:50 pm

Only thinking out loud here but as you are classed as tax res for the year after 186 days in each tax year im guessing you may be classed as tax res in which ever region if you have spent more than 186 days there in the current tax year.

Padron would be the offical document but like beach says its upto you to prove when you moved etc if hacienda comes knocking. So get your addresses changed ASAP to cover yourself

Paddy Pumpkin
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Re: Changing Tax Region

Postby Paddy Pumpkin » Wed Dec 16, 2020 11:45 pm

I don't think the 186 days is the decider.

Take for instance the following. Say someone works 200 days in Madrid and then moves to take a new job in Malaga. I don't think their salary would be taxed on Madrid rates whilst they worked in Malaga. Or say they lived in Murcia but worked 10km away across the border in Andalucía province, how would they be taxed? Would they pay tax differently to colleague who lived in Andalucía?

Or take wealth tax which is based on 31st Dec wealth. It doesn't exist in Madrid...so a wealthy Andalucían would empadronada in Madrid every December if it wasn't the 186 day rule.

In short I can see many ways to view it. If the house we are moving to in Andalucía is ready in November 2021 maybe it is better for us to wait until January to 'move' to the new house. But that then raises the question when I am doing tax returns in 2022 (for income received in 2021) having registered our new address in January 2022, will I be taxed like someone living in Madrid which I will have done for 365 days or like someone in Andalucía which will be my address from January 2022.

elusive
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Re: Changing Tax Region

Postby elusive » Thu Dec 17, 2020 4:39 pm

See what a decent gestor says or maybe beach will have an idea?

Paddy Pumpkin
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Re: Changing Tax Region

Postby Paddy Pumpkin » Sun Dec 20, 2020 7:38 am

Gestor.....hmmmm haven't yet met one I trust to consistently give me the right answer.

I read the law on it and all that it says is that it is your residence on the day of accrual of the tax. However I am still wondering what happens when I tell the online system I moved on say January 20th but then doing my return in April will it realise I was living in a different region in the previous year to the one I am living in now. I guess it will be a suck and see what happens.

elusive
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Re: Changing Tax Region

Postby elusive » Sun Dec 20, 2020 10:17 am

Go to the direct source ie the tax office and ask them or just do it yourself and as your say,if its questioned just have your reasoning for it.

Paddy Pumpkin
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Re: Changing Tax Region

Postby Paddy Pumpkin » Sun Dec 20, 2020 10:32 am

When I do it myself the system will just calculate the tax bill for me. I am trying to figure out which bill it will calculate. Will the system say...your address is Andalucia now so we give you the Andalucia bill or will it realise for all of the previous tax year I was living in Madrid and give me the Madrid bill,

The law states one thing but based on my other dealings with Hacienda....the law and reality are not always correctly linked. Hence I was trying to find if anyone has experience of doing the same themselves and what did the online system do.

LifeofBrian
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Re: Changing Tax Region

Postby LifeofBrian » Wed Jan 20, 2021 11:22 pm

Hi All, not too sure where to post this or even how actually (pretty new to the forum - much to learn) but my question is a simple one. I have to send 'stuff' to HMRC and the forms I need to fill in are a bit complicated (State Pension from UK and also overseas - three forms to fill in altogether, yuk!) so can anyone recommend someone who can take the burden off me? Gestoria or accountant, probably an English one as I have spoken to a Spanish accountant who was at cross-wires with HMRC! Grateful for any response. Very kind of you. Take care.

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Wicksey
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Re: Changing Tax Region

Postby Wicksey » Thu Jan 21, 2021 12:25 pm

The HMRC tax returns are fairly straightforward. I do ours, the main section, income from property and non resident so three in all. They send a book of instructions and often most of the form remains blank as a lot of the sections don't apply. They are issued after 6 April and you have 6 months to submit them.

Paddy Pumpkin
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Re: Changing Tax Region

Postby Paddy Pumpkin » Thu Jan 21, 2021 2:22 pm

Or just do the return online....the webpage even calculates the tax bill and let's you pay it

Also no need to send anything to HMRC by post at all

LifeofBrian
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Re: Changing Tax Region

Postby LifeofBrian » Thu Jan 21, 2021 3:29 pm

Thank you Wicksey and Paddy Pumpkin. Kind of you to respond. Apparently I have to do three forms. The main one, one for foreign income and one for residency. The forms cannot be filled in online as I am now overseas. I did chat with them as I had to fill forms in once before (after I retired) and that could be done online. Now, however, as I am living in Spain the three forms have to be printed off, filled in and sent back. I will be fined £100 fine as apparently the postal forms had to be in by last October as opposed to 31st Jan. All a bit horrid, especially the third form. Yuk. Thanks again.

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Wicksey
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Re: Changing Tax Region

Postby Wicksey » Thu Jan 21, 2021 4:05 pm

Yes I found that you cannot complete certain sections online, I think it is the non resident one in particular. I get sent paper ones with the instruction booklet each April. I can cope with the UK ones, it's the Spanish returns I pay my gestoria to do as I find the property rental rules seem to change and I'd rather someone else deals with that. If I only had a pension it would make life easier!

Paddy Pumpkin
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Re: Changing Tax Region

Postby Paddy Pumpkin » Thu Jan 21, 2021 8:57 pm

I also have to do the Non residence bit on the UK tax return. You can buy software for 18 GBP that enables you to do the complete tax return.

It is super easy to use and resembles the HMRC online system. You can try it for free and only pay when you actually want to transmit the return to HMRC.

https://abcsa.co.uk/pages/sa100-purchase

LifeofBrian
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Re: Changing Tax Region

Postby LifeofBrian » Sun Jan 24, 2021 3:24 pm

Just to thank everyone that tried to help. Some useful snippets of information which were appreciated. In short, I managed, after a number of attempts, to speak to a chap at HMRC who was extremely helpful. I should be able to finish the forms on Monday, send them off on Tuesday and then wait with bated breath for the result. Fingers crossed. Stay safe all.


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