# Paying tax as a new resident.



## amespana (Nov 10, 2009)

We moved to Estepona in August last year so did not become fiscal residents until January 2015.Unfortunately our gestor who we have used for 15 years as non resident property owners does not deal with new resident tax issues.So we are looking for a gestor who is au fait with the current tax relationship between the uk and Spain.Ours should be a relatively simple job,both retired,some investments,a uk property rented out and two or three pensions.Not really in the Blevins Franks terrority.
I realise I could do this myself but I can't be bothered with the hassle,and that's what we're in Spain to avoid!
I've asked this question once or twice before on different forums(modern vernacular Baldi) and had very few replies,apart from Mary Gbh(God bless her),but her recommendation BF is a bit above our pay scale.Tia.


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## Pesky Wesky (May 10, 2009)

amespana said:


> We moved to Estepona in August last year so did not become fiscal residents until January 2015.Unfortunately our gestor who we have used for 15 years as non resident property owners does not deal with new resident tax issues.So we are looking for a gestor who is au fait with the current tax relationship between the uk and Spain.Ours should be a relatively simple job,both retired,some investments,a uk property rented out and two or three pensions.Not really in the Blevins Franks terrority.
> I realise I could do this myself but I can't be bothered with the hassle,and that's what we're in Spain to avoid!
> I've asked this question once or twice before on different forums(modern vernacular Baldi) and had very few replies,apart from Mary Gbh(God bless her),but her recommendation BF is a bit above our pay scale.Tia.


Why not make an appointment with the advisors in the tax office itself? It's free and they have to sort it out if you go to them.


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## larryzx (Jul 2, 2014)

amespana said:


> *We moved* to Estepona in August last year so did not become fiscal residents until January 2015.)


That means you have been tax resident since you arrived here. The 183 day rule only applies to people who have not moved here (still have their main home somewhere else) but who have just been here for that period in a tax year.

I would suggest you go to a gestor, as you do not want to do it, and get it sorted.

PS Or it may be time to ask HMRC and Hacienda and get the correct info, instead of asking on forums (hoping perhaps to get the answer you woulld like rather than the factual one).


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## Rabbitcat (Aug 31, 2014)

Much of a grey area, or so I have been told.

The 183 days is certainly definitive but prior to that its not cut and dried. 

For example if you have an address back in UK and say are renting, as opposed to owning- in Spain you most probably would not be considered resident until the 183 deadline


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## larryzx (Jul 2, 2014)

Rabbitcat said:


> Much of a grey area, or so I have been told.
> 
> The 183 days is certainly definitive but prior to that its not cut and dried.
> 
> For example if you have an address back in UK and say are renting, as opposed to owning- in Spain you most probably would not be considered resident until the 183 deadline


As the OP says they have moved, if that means moved as in come to stay permanently, not as in on holiday (UK home rented out) then there is no 'greyness' for them.


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## Rabbitcat (Aug 31, 2014)

Don't know if its as simple as that.

If I rent a house in Spain and still have a UK property, how's that make me permanent. I might stay, might not

Obviously the 183 days still applies but until then I see nothing permanent about such a stay


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## larryzx (Jul 2, 2014)

Rabbitcat said:


> Don't know if its as simple as that.
> 
> If I rent a house in Spain and still have a UK property, how's that make me permanent. I might stay, might not
> 
> Obviously the 183 days still applies but until then I see nothing permanent about such a stay


Ok I have had my say. What do others think, or better still, know ?


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## Gazeebo (Jan 23, 2015)

larryzx said:


> Ok I have had my say. What do others think, or better still, know ?


Well, just to confuse matters - I know nothing! However, I have found this thread interesting as we are going to be renting in Spain this year hopefully for several months with a view to deciding if it is what we really want. For us, I believe it will be a little simpler as we will be leaving the country on occasion, but hopefully by the end of our stay, we will have decided whether to stay or go!

I have to say that I find the residency and tax situations in Spain, sometimes, to be complicated and grey areas. Unlike the UK where it seems anyone from the EU can come into the country, live, get access to our Natonal Health etc., etc. However, I do think that the UK has some lessons to learn from Spain and the idea of having either a job or enough money to live on, and private healthcare is how the UK should be looking at it.

Well, I am sorry if I have gone off on a tangent, but thank you all who contributed to this thread as it has been interesting to hear your views and knowledge, and thank you to all those who put links for information.


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## rustyraider (Apr 7, 2015)

Interesting thread.

When is the Spanish tax year to and from.


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## rustyraider (Apr 7, 2015)

What are the dates of the start and end of the Spanish tax year?


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## snikpoh (Nov 19, 2007)

rustyraider said:


> What are the dates of the start and end of the Spanish tax year?


For someone who is tax resident it's January 1st to December 31st (calendar year).

For non-residents, they must submit tax returns at different times.


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## Pesky Wesky (May 10, 2009)

The dates for handing in tax forms for 2014 (renta y patrimonio) have just started.
Deadline is June 25th


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## snikpoh (Nov 19, 2007)

Pesky Wesky said:


> The dates for handing in tax forms for 2014 (renta y patrimonio) have just started.
> Deadline is June 25th


... for residents only.


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## Duchess (Sep 28, 2009)

I hope my question is relevant to this thread.

We will be retiring and buying a house and selling our UK home to fund the Spanish home. We will be living there permanently, so are we exempt from CGT?
I understand that if we have savings we would be taxed on them, but what if any tax do we pay?

My OH will be getting his UK pension which is taxed in the UK, and a private pension.

Also, as I won't be retirement age are there any penalties I will incur?


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## rustyraider (Apr 7, 2015)

snikpoh said:


> For someone who is tax resident it's January 1st to December 31st (calendar year).
> 
> For non-residents, they must submit tax returns at different times.


Thanks. What type of non residents need to submit tax forms.

The Spanish rules seem very complicated.


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## Chopera (Apr 22, 2013)

Duchess said:


> I hope my question is relevant to this thread.
> 
> We will be retiring and buying a house and selling our UK home to fund the Spanish home. We will be living there permanently, so are we exempt from CGT?
> I understand that if we have savings we would be taxed on them, but what if any tax do we pay?
> ...


My understanding is that if you either sell your UK home before the year that you become a Spanish resident, or you make sure you buy the home in Spain within a certain time period after selling the UK home, or if you are over 65 then you won't be liable for CGT. The trap people might fall into is selling their UK home in the same year that they become resident in Spain and then they rent for several years. Under these circumstances they might be liable for CGT in Spain.


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## Pesky Wesky (May 10, 2009)

snikpoh said:


> ... for residents only.


Of course!


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## xabiaxica (Jun 23, 2009)

rustyraider said:


> Thanks. What type of non residents need to submit tax forms.
> 
> The Spanish rules seem very complicated.


People who own property in Spain but spend less than half the year here


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## extranjero (Nov 16, 2012)

Duchess said:


> I hope my question is relevant to this thread.
> 
> We will be retiring and buying a house and selling our UK home to fund the Spanish home. We will be living there permanently, so are we exempt from CGT?
> I understand that if we have savings we would be taxed on them, but what if any tax do we pay?
> ...


When you say your OH is getting his UK pension, do you mean the state pension? 
If so, it must be taxed in Spain, as must his private pension.
Only government pensions are taxed in the UK, but must still be declared in Spain as it is used to work out the tax base.
You will be taxed on the interest you get on your savings.
It is better you sell your house the year before you move to Spain, to avoid capital gains tax, and its the same regarding any lumpsums, or insurances which may be due.
There is a big thread on here about the assets declaration on form 720, which you may need to submit when you become a resident. Use the search facility to read up on it, and also go to Blevins Franks website to see a concise explanation of it.


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## Duchess (Sep 28, 2009)

extranjero said:


> When you say your OH is getting his UK pension, do you mean the state pension?
> If so, it must be taxed in Spain, as must his private pension.
> Only government pensions are taxed in the UK, but must still be declared in Spain as it is used to work out the tax base.
> You will be taxed on the interest you get on your savings.
> ...


Hi extranjero
My OH will have a private pension, state pension and government one. 

Regarding selling your house the year before you move to Spain - I've read this on other threads, and one person asked exactly what I want to know, but never got an answer........ Where would you live in the meantime??!!

If anyone has done this, let me know.

I have read the Blevins Franks info, and was interested to see that if your spouse dies, you may have to pay inheritance tax. It was unclear as to the criteria, but that is something else I will have to look into.


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## Duchess (Sep 28, 2009)

Chopera said:


> My understanding is that if you either sell your UK home before the year that you become a Spanish resident, or you make sure you buy the home in Spain within a certain time period after selling the UK home, or if you are over 65 then you won't be liable for CGT. The trap people might fall into is selling their UK home in the same year that they become resident in Spain and then they rent for several years. Under these circumstances they might be liable for CGT in Spain.


Wow, confusing or what! Thanks Chopera.
1. My OH would be 65
2. We wanted to sell our UK home and buy one and live in it in the same year, unless we bought it in say, December, and it took 2-3 months to do all legal stuff on UK and Spanish home sales.
3. Where would you live if you have to avoid selling and then buying in Spain in the same year?

Have people actually done this? If so I would be interested to see what route you took with it all.


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## snikpoh (Nov 19, 2007)

Duchess said:


> Wow, confusing or what! Thanks Chopera.
> 1. My OH would be 65
> 2. We wanted to sell our UK home and buy one and live in it in the same year, unless we bought it in say, December, and it took 2-3 months to do all legal stuff on UK and Spanish home sales.
> 3. Where would you live if you have to avoid selling and then buying in Spain in the same year?
> ...


I think, in your situation, you don't need to worry for a number of reasons. The main reason is that your other half is over 65 and you are intending to buy another property in the EU (Spain) within the prescribed time-scale (2 years?).

The issue about CGT is really for those that are selling in UK and are intending to rent in Spain.


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## extranjero (Nov 16, 2012)

You would have to rent or stay with family or friends, put your stuff in storage
I 'm afraid the Inheritance tax laws in Spain can be punitive depending on the allowances ( or not) in the region you live in,definitely worth more research.
Dont understand 
Snikpoh's point about not worrying because your husband is over 65.
Getting confused about a resident in Spain, over 65 , having lived in the property for 3 years not having to pay cgt.
Not sure that applies to selling the house in UK though.


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## Rabbitcat (Aug 31, 2014)

Bottom line is try and sell up in UK after 4 July but before 31 Dec-I know! - how on earth do you time that!!!-or else sell one year move the next. No easy way around it


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## Roy C (Sep 29, 2012)

We had a plan but it was blown apart in the thread about which is the best month to move to Spain. 
http://www.expatforum.com/expats/sp...ain/702346-tax-whens-best-month-relocate.html
The plan was 2016 take VS at work and lump sum pension as in early retirement in April the new tax year so I don't pay so much tax at 40% Then sell the house here, buy an apartment here and after renting for a while in Spain buy a townhouse or an apartment to live in. We are looking at moving to Spain in Sept 2016 and waiting the 183 days to register prior to buying in Spain. The first tax form I would need to fill in would be 2018 for 2017 excluding lump sum payments (which I will pay VS tax in UK). I'm not avoiding paying tax in Spain, I just don't want to pay tax on the pension lump sum which is tax free over here (currently).

Now in the thread mentioned they say I could still get caught out for tax on my 2016 payments / sales etc. So it was suggested we move to Spain in Jan 2017. Which is the moving date getting further and further away, so I thought we could move to Portugal in Sept 2016 and then move to Spain in 2017. Have I got this right, it all seems very complicated?


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## Rabbitcat (Aug 31, 2014)

It seems a bloody nightmare

As I read it if you sell up in the same tax year as you become tax resident you owe CGT on the sale of your home.

I will aim to try and sell after early July but its virtually impossible to plan when you will get a buyer!!


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## snikpoh (Nov 19, 2007)

Rabbitcat said:


> It seems a bloody nightmare
> 
> As I read it if you sell up in the same tax year as you become tax resident you owe CGT on the sale of your home.
> 
> I will aim to try and sell after early July but its virtually impossible to plan when you will get a buyer!!




Not if you buy another property in EU with those funds - surely? (which is what the OP said they were going to do)


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## Rabbitcat (Aug 31, 2014)

Sorry Snik, I was referring to selling up at home and then renting in Spain


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## CapnBilly (Jun 7, 2011)

snikpoh said:


> Rabbitcat said:
> 
> 
> > It seems a bloody nightmare
> ...


If you are liable to capital gains then you have to invest all the proceeds (less costs etc) to gain full relief. So for example if the proceeds are £100,000 (and for ease this is also your profit) and you reinvest £80,000, then you would pay capital gains on the balance remaining.

Having said all that, I don't agree with the premise that you are automatically liable for capital gains if you sell your property in the UK and move to Spain within the same year, but with less than 183 days remaining in the calendar year.


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## Lynn R (Feb 21, 2014)

CapnBilly said:


> Having said all that, I don't agree with the premise that you are automatically liable for capital gains if you sell your property in the UK and move to Spain within the same year, but with less than 183 days remaining in the calendar year.


Nor do I. I sold my UK house in at the end of October 2006 and moved to Spain (permanently) at the end of November 2006. I moved to a house I'd bought in Spain over 3 years before that, so didn't reinvest the proceeds of the UK house sale to buy one in Spain.

I went to Hacienda to make a tax return in May 2008, working on the premise that 2007 would be the first year I would have been tax resident in Spain. I explained to them that I hadn't had any earned or pension income for that year but that was I was living off savings, which had come partly from the sale of my UK property. They did not tell me I had in fact become tax resident as soon as I arrived, nor were any questions asked about the capital gain from the sale of my UK property. That's good eough for me to know how Hacienda themselves interpret the rules.


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## Rabbitcat (Aug 31, 2014)

Capnbilly
Having said all that, I don't agree with the premise that you are automatically liable for capital gains if you sell your property in the UK and move to Spain within the same year, but with less than 183 days remaining in the calendar year.



I don't think anyone's saying that.
I am saying the opposite.


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## CapnBilly (Jun 7, 2011)

Roy C said:


> We had a plan but it was blown apart in the thread about which is the best month to move to Spain.
> http://www.expatforum.com/expats/sp...ain/702346-tax-whens-best-month-relocate.html
> The plan was 2016 take VS at work and lump sum pension as in early retirement in April the new tax year so I don't pay so much tax at 40% Then sell the house here, buy an apartment here and after renting for a while in Spain buy a townhouse or an apartment to live in. We are looking at moving to Spain in Sept 2016 and waiting the 183 days to register prior to buying in Spain. The first tax form I would need to fill in would be 2018 for 2017 excluding lump sum payments (which I will pay VS tax in UK). I'm not avoiding paying tax in Spain, I just don't want to pay tax on the pension lump sum which is tax free over here (currently).
> 
> Now in the thread mentioned they say I could still get caught out for tax on my 2016 payments / sales etc. So it was suggested we move to Spain in Jan 2017. Which is the moving date getting further and further away, so I thought we could move to Portugal in Sept 2016 and then move to Spain in 2017. Have I got this right, it all seems very complicated?


Seems to me this post, based on the linked thread says exactly that, unless I have misunderstood


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## xabiaxica (Jun 23, 2009)

CapnBilly said:


> Seems to me this post, based on the linked thread says exactly that, unless I have misunderstood


Various people have been saying that on this & other threads recently, despite several of us linking to trusted tax advice websites & one member being told directly by _*Hacienda*_ that, having moved here in September 2014, they wouldn't have to submit a tax return until 2016 - clearly meaning that they weren't tax resident in 2014!!


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## CapnBilly (Jun 7, 2011)

xabiachica said:


> Various people have been saying that on this & other threads recently, despite several of us linking to trusted tax advice websites & one member being told directly by _*Hacienda*_ that, having moved here in September 2014, they wouldn't have to submit a tax return until 2016 - clearly meaning that they weren't tax resident in 2014!!


Thanks, I thought I had read something else recently, but I didn't have time to post on the thread. Roy C is clearly thinking of changing his plans on the basis of the thread.


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## Rabbitcat (Aug 31, 2014)

Jeez there does seem some confusion.

As simple as I can put my reading of it.....

If you sell your UK home AND BECOME TAX RESIDENT IN SPAIN IN THE SAME TAX YEAR- you can be liable for CGT

EXAMPS

Sell UK home Jan, move to Spain May -OWE CGT

Sell UK home June, move to Spain Aug- DONT OWE CGT

Must stress I am not experienced but have consulted a couple of Spanish account firms and many people who are very experienced

If I have got this wrong I would appreciate being corrected. I have learnt a lot on this forum simply by being put right by more experienced members


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## CapnBilly (Jun 7, 2011)

Rabbitcat said:


> Jeez there does seem some confusion.
> 
> As simple as I can put my reading of it.....
> 
> ...


No, that's correct, but there are other views expressed in the thread. I didn't specifically use your post in that respect, used it to clarify the capital gains situation. The post about liability was an additional comment based on what I had read in the thread and other posts.

As Xabiachica posted it is also on other threads, and it is clearly causing confusion.


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## Rabbitcat (Aug 31, 2014)

Thanks Capn

The subject in relation to moving to Spain I do take issue and appear to view differently from others- is being viewed as tax resident BEFORE the passing of 183 days.

I understand that you MIGHT be considered tax resident if you sell up all you have and BUY a permanent property in Spain. Possibility there that you COULD be immediately considered tax resident

However if you were to maintain an address in UK and RENT immediately in Spain I do not see how you could be considered tax resident prior to the passing of 183 days


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## CapnBilly (Jun 7, 2011)

Rabbitcat said:


> Thanks Capn
> 
> I understand that you MIGHT be considered tax resident if you sell up all you have and BUY a permanent property in Spain. Possibility there that you COULD be immediately considered tax resident


This is the bit that I don't accept, and although it may be possible, I don't agree that it will generally , which is what seems to be driving the current different views.bi cannot see where it says that in the tax legislation


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## Rabbitcat (Aug 31, 2014)

Agree entirely with you hence my MIGHT and COULD.

However some of those who take that opinion are a lot more experienced than myself and so I cannot rule out the possibility.

We have decided simply to put our home up for sale. If it sells after early July, off we go. If it sells prior to that we will take a short term rental at home until after early July then move to rental in Spain.

Messy I know but only way I can see around the matter


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