# Are we doing the right thing?



## Miascot (Dec 16, 2018)

My wife and I decided to leave the UK on October 12th to spend the winter in Spain (costa del sol) and Portugal.

We intended checking out potential places to settle and have spent a week in each of the following

Frigiliana/Nerja (did the caves and beaches plus some nice drives)
Almuñécar (did the Sierra Nevada ski resort and Alhambra)
Malaga (lived like a local and saw all that the city has to offer) great place
Along to Calahonda (our timeshare)
Now in Benahavís and found heaven!

We visited Marbella last year and enjoyed it but feel much happier up here in the hills above SAN Pedro. Lovely views of the distant sea and easy reach to Marbella and Puerto Banus but easy to leave the madness behind.

We haven’t even reached Portugal yet but feel we have found what we want here and were looking at long term rentals only to find one next door which is perfect. I was on this site looking for tips and suddenly realised we didn’t do anything prior to leaving the UK! We thought being European citizens meant we could travel anywhere in the EU as we pleased but maybe not!

Were we meant to tell the UK immigration of our intention?
Do we need to register for an NEI here?

Do we really need to pay tax on our worldwide income if we are here for more than 183 days in the year?

Not keen on jumping through hoops and perhaps ignorance is bliss?

We can continue our trip to Portugal if popping out the country for a week or a month helps us?

Please be gentle, I am a newby!

Thanks in advance for all the help

Ken


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## Alcalaina (Aug 6, 2010)

Hi, welcome!

You don't have to advise the UK that you are moving, but after living in Spain for more than three months you are required to register as a resident from another EU country. This involves proving you have enough incime to support yourselves, and also private health insurance. You won't be able to use your EHIC for health cover, as this is for short-term visitors only. However if one or both of you is receiving a UK state pension, you can get free health cover under the S1 scheme (again, see FAQs).

When you register, you will be given a card or a certificate bearing your NIE (a tax ID number for foreigners). See the FAQs section for more information.

If you spend more than 183 days here in any calendar year, you are legally considered tax resident and have to make a declaration of your income from anywhere in the world. But that doesn't mean you'll pay tax twice on the same income.

Popping into Portugal for a week won't make any difference.

Of course, this may all change after Brexit ...


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## Lynn R (Feb 21, 2014)

If you intend to stay in Spain for longer than 90 days, you should register as foreign residents. Leaving the country (to Portugal, for example) for a short time can restart the clock on this, but after Brexit that may no longer be the case as third country citizens can only stay in Spain for 90 days in every 183 without obtaining a visa.

Registering as resident involves you providing proof of sufficient financial resources not to become a burden on the Spanish state (best to ask at the Extranjeria nearest to where you intend to settle as to what their exact requirements are as they can vary between different areas). If you are below retirement age you will also need to show proof of private health insurance (a policy with no co-payments), if either of you are in receipt of a UK state pension you can obtain an S1 form from the DWP which will entitle you to state healthcare in Spain paid for by the UK Government and this is acceptable for the purposes of registering as a resident. You will be allocated an NIE number as part of the process.

Once you have been in Spain for 183 days then yes, you have to declare all your world wide income and pay tax on it. If you have assets outside in Spain which are worth more than €50k in any one asset class (eg property, cash in bank accounts, stocks and shares, etc) you must also submit a Modelo 720 declaration of overseas assets).

You certainly don't need to tell the British immigration authorities you have left.


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## xabiaxica (Jun 23, 2009)

Miascot said:


> My wife and I decided to leave the UK on October 12th to spend the winter in Spain (costa del sol) and Portugal.
> 
> We intended checking out potential places to settle and have spent a week in each of the following
> 
> ...


:welcome:

The requirement is that if you are here 90+ days then you register as resident - you'd be issued a NIE at that time. For that you have to prove sufficient funds/income & that you have healthcare provision.

If you spend more than 183 days in a tax year in Spain (Jan 1st to Dec 31st) you are required to make a tax return. There are other 'triggers' but that's the most likely.

The way the system works, is that if for instance, you were to spend 183 days in Spain in 2018, then you would submit a tax return in May/June 2019 for 2018. So if you're just here for this winter, you wouldn't need to submit one for 2018. 

If you were here earlier this year & have clocked up a total of 183 days in 2018, then you would do a tax return.

If you decide to stay in Spain & not return to the UK, & 2019 is the first year you clock up 183+ days, then your first tax return will be in May/June 2020.


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## Miascot (Dec 16, 2018)

Thanks to all for your help

We are not retirement age but do have private healthcare and sufficient funds.

We haven’t really got a plan and were happy just going with the wind and once we decide where or what we want to do we would do as required probably through an accountant as we still have business and assets in the UK - quite a complicated life really but we did it all before when we went to Florida and got our green cards so not daunted.

I would be happy saying nothing for now but worry that our passports will trigger something on the way back and the authorities might raise questions and prevent us returning, is this likely?


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## Lynn R (Feb 21, 2014)

Miascot said:


> Thanks to all for your help
> 
> We are not retirement age but do have private healthcare and sufficient funds.
> 
> ...


I'm sure you wouldn't expect any of us to encourage you to do something which does not comply with Spanish law, and in fact it would be against the rules of the forum for us to do so.


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## Miascot (Dec 16, 2018)

Definitely wouldn’t expect anyone to break the law on my behalf, I guess I am just a bit lazy and probably naive. Ignorant might be a better description as I would never have known any of this if I hadn’t searched this site on another matter. 

You say going to Portugal would restart the clock but Alcalaina doesn’t seem to think this would work. If it did work, restarting the clock would give us the break from the 90 day limit but once we are back the clock is ticking towards the 183 days and may scupper our plan to come back next winter.


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## Lynn R (Feb 21, 2014)

Miascot said:


> Definitely wouldn’t expect anyone to break the law on my behalf, I guess I am just a bit lazy and probably naive. Ignorant might be a better description as I would never have known any of this if I hadn’t searched this site on another matter.
> 
> You say going to Portugal would restart the clock but Alcalaina doesn’t seem to think this would work. If it did work, restarting the clock would give us the break from the 90 day limit but once we are back the clock is ticking towards the 183 days and may scupper our plan to come back next winter.


Going to Portugal would restart the clock when it comes to the need to register as a resident if you stay 90 days or more, but it would not affect the fact that you would be considered tax resident if you spend 183 days or more in Spain in a year, because the 183 day rule is cumulative rather than consecutive. The two things are separate issues.

If you are concerned about taxation implications, have you looked into the Portugese Non Habitual Resident scheme which, as I understand it, could mean you pay no tax in Portugal on foreign income for a period of 10 years?


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## Miascot (Dec 16, 2018)

Lynn R said:


> Going to Portugal would restart the clock when it comes to the need to register as a resident if you stay 90 days or more, but it would not affect the fact that you would be considered tax resident if you spend 183 days or more in Spain in a year, because the 183 day rule is cumulative rather than consecutive. The two things are separate issues.
> 
> If you are concerned about taxation implications, have you looked into the Portugese Non Habitual Resident scheme which, as I understand it, could mean you pay no tax in Portugal on foreign income for a period of 10 years?


I will absorb the first part of your help over the next few days, I am a bit slow when it comes to absorbing such things; penny should drop eventually lol

NHR: That is the main reason (other than the sun) for going being honest but I thought the benefit was just relating to capital gains? Our income is from our property portfolio which I believe would still be taxed in the UK since all the properties are there. However capital gains are reset to 2015 levels meaning any gains prior to that would be wiped out. 

This could save us a fortune if we sold but if we sell, our life long passive income is gone. Hard to weigh up what to do but sussing out where we want to be is the biggest part of our woes. Life is short and we will not live in a country we don’t particularly like just because the taxation system is better. Life is for living!


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## Lynn R (Feb 21, 2014)

Miascot said:


> I will absorb the first part of your help over the next few days, I am a bit slow when it comes to absorbing such things; penny should drop eventually lol
> 
> NHR: That is the main reason (other than the sun) for going being honest but I thought the benefit was just relating to capital gains? Our income is from our property portfolio which I believe would still be taxed in the UK since all the properties are there. However capital gains are reset to 2015 levels meaning any gains prior to that would be wiped out.
> 
> This could save us a fortune if we sold but if we sell, our life long passive income is gone. Hard to weigh up what to do but sussing out where we want to be is the biggest part of our woes. Life is short and we will not live in a country we don’t particularly like just because the taxation system is better. Life is for living!


I only know what I've read about the NHR scheme, but it covers much much than capital gains.

https://www.blevinsfranks.com/news/article/non-habitual-resident-regime-NHR-Portugal-tax-advantages

I quite agree with you about not wanting to live in a country just because the taxation system is better, but on the other hand you can't really pitch your tent in a country without accepting its taxation regime because it doesn't suit your needs and hoping to claim ignorance if you fall foul of the law. Ignorance is definitely no defence as far as the Spanish Agencia Tributaria is concerned, and penalties can be severe especially for failure to declare overseas assets on the Modelo 720.


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## Miascot (Dec 16, 2018)

Lynn R said:


> I only know what I've read about the NHR scheme, but it covers much much than capital gains.
> 
> I quite agree with you about not wanting to live in a country just because the taxation system is better, but on the other hand you can't really pitch your tent in a country without accepting its taxation regime because it doesn't suit your needs and hoping to claim ignorance if you fall foul of the law. Ignorance is definitely no defence as far as the Spanish Agencia Tributaria is concerned, and penalties can be severe especially for failure to declare overseas assets on the Modelo 720.


I believe Adrian Hook is the Portuguese expert in Blevin Franks and fully intend speaking with him and others before pitching our tent. It has taken 25 years to accrue what we have so definitely won’t be making any silly mistakes.

Thanks for all the advice


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## Williams2 (Sep 15, 2013)

Miascot said:


> I will absorb the first part of your help over the next few days, I am a bit slow when it comes to absorbing such things; penny should drop eventually lol
> 
> NHR: That is the main reason (other than the sun) for going being honest but I thought the benefit was just relating to capital gains? Our income is from our property portfolio which I believe would still be taxed in the UK since all the properties are there. *However capital gains are reset to 2015 levels meaning any gains prior to that would be wiped out.*
> 
> This could save us a fortune if we sold but if we sell, our life long passive income is gone. Hard to weigh up what to do but sussing out where we want to be is the biggest part of our woes. Life is short and we will not live in a country we don’t particularly like just because the taxation system is better. Life is for living!


Well my understanding of the 2015 UK HMRC Capital Gains reset is that it was only reset for those
people who are counted as Non resident UK and resident in another country.

So I assume you fall into this category.

For example if you bought a property in the UK back in 1998 while a British citizen and a British
resident and then came to sell it after April 2015 and after you moved to Spain ( say a year or
two before & and became resident there ) then for that person any capital gain from 1998 to
whenever you sell it, say its July 2015 is disregarded for CGT Tax purposes, although the caveat
with that is the UK house has to be valued by a reputable Estate Agent, to give the value of the
property as it would be; as from the 6th April 2015 - which becomes the base month and year
for determining any capital gains on that property between say April 2015 and if
you wanted to sell it some years later instead, say in July 2018.

Quote - Since April 2015, non-UK residents have to pay CGT on gains realised 
on UK residential property. The gain taxable is restricted to any growth from the
April 2015 value.

Of course while this takes care of the UK end, there will still be the Spanish end of the business
where you are permanently resident where you also need to declare CGT.


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## Williams2 (Sep 15, 2013)

Lynn R said:


> I only know what I've read about the NHR scheme, but it covers much much than capital gains.
> 
> https://www.blevinsfranks.com/news/article/non-habitual-resident-regime-NHR-Portugal-tax-advantages
> 
> I quite agree with you about not wanting to live in a country just because the taxation system is better, but on the other hand you can't really pitch your tent in a country without accepting its taxation regime because it doesn't suit your needs and hoping to claim ignorance if you fall foul of the law. Ignorance is definitely no defence as far as the Spanish Agencia Tributaria is concerned, and penalties can be severe especially for failure to declare overseas assets on the Modelo 720.


I think I've lost count of the wannabe British Expats who want their cake and eat it,
namely those that would like to move to Spain but are horrified that they will have
to give up their UK ISA's to do it.

Of course we've all met the odd British Expat who's opt out excuse over Modelo 720 and many
other things besides, concerning non disclosure of assets in the UK is - _how are they going to
know and who's going to tell them ??_

Obviously if they are footie fans - they will be well aware of the severity of penalties dished out
by the Spanish Agencia Tributaria - ask Ronaldo.


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## Miascot (Dec 16, 2018)

Williams2 said:


> Well my understanding of the 2015 UK HMRC Capital Gains reset is that it was only reset for those
> people who are counted as Non resident UK and resident in another country.
> 
> So I assume you fall into this category.
> ...


I think Portugal is the only place other than Cyprus to head to if you have want to reduce your capital gains tax bill. Spain seems to be worse than the UK!

I guess we could do 183 days in Portugal and the rest in Spain - not a bad compromise


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## Williams2 (Sep 15, 2013)

Miascot said:


> I think Portugal is the only place other than Cyprus to head to if you have want to reduce your capital gains tax bill. Spain seems to be worse than the UK!
> 
> I guess we could do 183 days in Portugal and the rest in Spain - not a bad compromise


In which case live in Portugal and simply holiday in Spain, then you enjoy the best of both worlds.


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## Williams2 (Sep 15, 2013)

All the best on your house hunting, wherever you decide to settle.


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## small frog (Dec 22, 2018)

good luck guys  keep it legal


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