# Renting UK home, Tax etc



## Floobs (Jul 29, 2016)

Hi folks,
Just doing all my research now (not planning on moving for a while) and getting totally confused. Would really appreciate any help!
Has anyone rented their UK house out and moved to Spain? Any advice relating to this? I also read that after 6 months I think Spain would then start taking some of the rental income? 
Also I will be working for my UK company, has anyone else done this? Again, I think it's after six months you switch over (but I could of got this wrong) how smooth is the transition of stopping paying tax in the UK and paying tax on your income to Spain? 
Does anyone know where I can get advise from a tax adviser who knows the Spanish system?
Thanks very much


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## snikpoh (Nov 19, 2007)

:welcome:

Firstly, try Blevins Franks for advice or perhaps abacoadvisers.

You are considered tax resident after 183 days in Spain WITHIN a 12 month calendar year OR if you have moved your centre of economic interest to Spain.

Once tax resident, you will have to pay tax on ALL your world-wide assets. UK rental income is taxed in UK but must be declared in Spain (offsetting any tax paid elsewhere).

Regarding your job, this is more complicated. They would either have to open a Spanish branch and then employ you through that or you would have to be self-employed and bill them for your services. Either way, you end up paying tax here.


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## Floobs (Jul 29, 2016)

Thanks for your reply snikpoh! Very useful.
I didn't know I would have to be self employed and then the autonomo fee I would have to pay every month. Another day another problem! I sent off an enquiry to abacoadvisers but they said they cannot advise and I would need a Gestoria.


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## benjus (Aug 1, 2016)

If the tenants pay rent directly to you, they will either have to deduct tax themselves and pay it to HMRC, or you'll have to apply to register with HMRC as a non resident landlord.


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## Evilbungle (Jul 8, 2016)

Hi Floobs, 

I am a long way from being an expert on this but I am going through the same thing at the moment and luckily for me my company are paying for me to get legal advice. I don´t doubt that Snikpoh knows better tan me but from my personal situation I am remaining employed by my company in the UK and remaining being paid on their UK payroll. I will be paying tax on my Employment earnings in Spain (Although fortunately at the UK rate as if the Spanish amount is more than the UK amount my company is making up the difference.) However I am staying domaciled in the UK for NI purposes so my Rental Income is being taxed as UK income (To my wife as she will not be working so will not have any tax to pay) this is then covered under a double taxation agreement with Spain so there shouldn´t be anything else to pay. It is posible that this is only because my wifes income from Rental and after off setting Mortgage interest is below a threshold, but I am not 100% on that (Just one of the benefits of having accountants looking at it for you is that you don´t have to be.) 

Anyway, As I say this isn´t my area of expertise but if you have any questions and they are something that has come up with me I can let you know what I have been told (Which in no way constitutes financial advice  )


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## Floobs (Jul 29, 2016)

Hi Evilbungle
Thanks for your reply, that's really interesting. Hope you don't mind but I've sent you a private message


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## snikpoh (Nov 19, 2007)

Evilbungle said:


> Hi Floobs,
> 
> I am a long way from being an expert on this but I am going through the same thing at the moment and luckily for me my company are paying for me to get legal advice. I don´t doubt that Snikpoh knows better tan me but from my personal situation I am remaining employed by my company in the UK and remaining being paid on their UK payroll. I will be paying tax on my Employment earnings in Spain (Although fortunately at the UK rate as if the Spanish amount is more than the UK amount my company is making up the difference.) However I am staying domaciled in the UK for NI purposes so my Rental Income is being taxed as UK income (To my wife as she will not be working so will not have any tax to pay) this is then covered under a double taxation agreement with Spain so there shouldn´t be anything else to pay. It is posible that this is only because my wifes income from Rental and after off setting Mortgage interest is below a threshold, but I am not 100% on that (Just one of the benefits of having accountants looking at it for you is that you don´t have to be.)
> 
> Anyway, As I say this isn´t my area of expertise but if you have any questions and they are something that has come up with me I can let you know what I have been told (Which in no way constitutes financial advice  )



The concept of domicile is purely a UK tax one - it has no meaning elsewhere in Europe and is mainly used when talking about IHT.

If you mean residency then that's entirely different. If you live in Spain, then their rules trump UK rules.

Yes, rental income is always taxable in UK but must be declared in Spain (as with all other income). Because of the DTA, you won't pay tax on the same income twice but you will have to make up any difference (due to different rates and allowances).

Income tax in Spain starts at an income level of 0 but then you start to apply allowances which gives the effect of not paying much tax(if any) on a low income.

If you are living in Spain yet paying NI in UK, where will you get your health care, pension etc.? Normally you have to make your SS payments (NI) in the country in which you work and live (which for you is Spain). However, you may find that there is an arrangement between the two countris where you can use the NI paid on UK to give you health cover in Spain (S1 form again?) - worth asking someone who knows about these things.


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## Evilbungle (Jul 8, 2016)

snikpoh said:


> If you are living in Spain yet paying NI in UK, where will you get your health care, pension etc.? Normally you have to make your SS payments (NI) in the country in which you work and live (which for you is Spain). However, you may find that there is an arrangement between the two countris where you can use the NI paid on UK to give you health cover in Spain (S1 form again?) - worth asking someone who knows about these things.


From what I have been told (by people who I am hoping know a lot more than me :fingerscrossed I will be paying NI in the UK which means that I will be able to use the NHS and continue to make pension contributions to the UK. They said it was being done by a shadow payroll? I don´t think I am covered under Spanish public health care but I have private health care to cover that I also don´t know if I would be covered for Unemployment benefits either as I have to show to the Spanish authorities that I have enough money to pay to go home if necessary. (Not sure if this is usual or to do with me technically not becoming resident.)

As I say, I am not 100% on what is technically being done but by getting financial advice at least if it all goes wrong I have someone to sue!!!


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## snikpoh (Nov 19, 2007)

OK, now I see.

After 90 days in Spain you need to sign on the list of foreigners and become resident here. This has nothing to do with tax nor with employment although you will be expected to meet the requirements (sufficient income in a Spanish bank, health care provision etc.)

As you won't be paying SS here, you will NOT be covered for unemployment benefit (should the need arise) not state health care.


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## CapnBilly (Jun 7, 2011)

Evilbungle said:


> From what I have been told (by people who I am hoping know a lot more than me :fingerscrossed I will be paying NI in the UK which means that I will be able to use the NHS and continue to make pension contributions to the UK. They said it was being done by a shadow payroll? I don´t think I am covered under Spanish public health care but I have private health care to cover that I also don´t know if I would be covered for Unemployment benefits either as I have to show to the Spanish authorities that I have enough money to pay to go home if necessary. (Not sure if this is usual or to do with me technically not becoming resident.)
> 
> As I say, I am not 100% on what is technically being done but by getting financial advice at least if it all goes wrong I have someone to sue!!!


As Snikpoh has already intimated you don't have a choice where you pay your national insurance. The only circumstances where you can work abroad and continue to pay national insurance in the UK is if you have been posted abroad by your company for upto 2 years or you carry out a large proportion of your work in the UK.

The procedure is that your company applies to the Inland Revenue and if they agree that you should be paying NI in the the UK, will issue you with an A1 form, which gives you exemption in Spain.

With regard to rental income, as far as the Inland Revenue are concerned if the property is jointly owned then you are unable to declare the income in one name only, unless it is owned as tenants in common. Even then it will be taxed as 50/50 unless you make a specific declaration.


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## Evilbungle (Jul 8, 2016)

This is why I have an accountant! Moving is stressful enough with out havig to become an international legal expert as well.


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## xabiaxica (Jun 23, 2009)

Evilbungle said:


> This is why I have an accountant! Moving is stressful enough with out havig to become an international legal expert as well.


make sure it's an accountant who understands both British & Spanish tax rules....


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## Evilbungle (Jul 8, 2016)

xabiachica said:


> make sure it's an accountant who understands both British & Spanish tax rules....


Luckily the company I am using (Grant Thornton) have UK and Spanish Accountants. So I get support in both countries. I also have an International Move Agency who have UK and Spanish reps and I have two Lawyers one in the UK and one in Spain. All of this is on top of the HR department in the UK and local HR in the office where I am actually working in Barcelona. - And I am still finding it hard going to get my head around, No idea how people do it without all the support (I am also not paying for any of it as otherwise I doubt I could afford it!)


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## snikpoh (Nov 19, 2007)

Evilbungle said:


> Luckily the company I am using (Grant Thornton) have UK and Spanish Accountants. So I get support in both countries. I also have an International Move Agency who have UK and Spanish reps and I have two Lawyers one in the UK and one in Spain. All of this is on top of the HR department in the UK and local HR in the office where I am actually working in Barcelona. - And I am still finding it hard going to get my head around, No idea how people do it without all the support (I am also not paying for any of it as otherwise I doubt I could afford it!)


Surely the simplest approach is to have the office in Barcelona employ you. You would then pay tax and SS here - dead simple.


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## Evilbungle (Jul 8, 2016)

snikpoh said:


> Surely the simplest approach is to have the office in Barcelona employ you. You would then pay tax and SS here - dead simple.


It is a different company so that isn't an option.

Anyway, As I say it isn't an issue for me as I am (mostly) protected by my company so have people taking care of most of the things - and I very much doubt I would do it if I was on my own as it is still giving me sleepless nights just co-ordinating the experts.

Just trying to help the OP with whatever my non-professional experience is worth.


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