# I need some advise please



## jojo (Sep 20, 2007)

I received a phone call yesterday from my bank, the Sol bank. They wanted my NIE number as apparently the police had told them to get it from me. Fair enough, so I went in today and gave it to them. They said that I was banking with them as a "non resident" and as I have an NIE number I should be classed as a "resident". So according to Sol bank I am now officially a resident and my savings will be taxed as such . However, my husband was furious and started to have a "go" in ther bank, claiming that an NIE number doesnt make me a resident, I'm taxed on earnings in the UK (I do his paperwork from Spain, but am paid in the UK). I ushered him out cos I didnt want a scene and dont understand it all anyway.

Does anyone understand any of this? Am I better off being classed as a resident or non-resident, I do have a small sterling deposit account with the sol bank? Does an NIE number make me a resident?? and why are the police involved?

Jo


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## SunnySpain (Jul 30, 2008)

jojo said:


> I received a phone call yesterday from my bank, the Sol bank. They said that I was banking with them as a "non resident" and as I have an NIE number I should be classed as a "resident". So according to Sol bank I am now officially a resident and my savings will be taxed as such . However, my husband was furious and started to have a "go" in ther bank, claiming that an NIE number doesnt make me a resident, I'm taxed on earnings in the UK (I do his paperwork from Spain, but am paid in the UK).
> 
> Does anyone understand any of this? Am I better off being classed as a resident or non-resident, I do have a small sterling deposit account with the sol bank? Does an NIE number make me a resident?? and why are the police involved?
> 
> Jo



Hi Jo,

By obtaining an NIE you have officially become a resident of Spain (thats my understanding of it anyway), which means your savings will be taxed in Spain
and depending on your position in the company your earnings could be taxed in Spain and not the UK.

Essentially by opening a bank account in Spain they can assess your information and the police almost certainly got involved as the government wants that all residents (Spanish or other) pay into the system.

I hope thats helps, regards, Dave


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## chris(madrid) (Mar 23, 2008)

Jo - my understanding is that YOU by living here 6 months (or less if it is your intent to do so) - ARE A RESIDENT. 

The NIE is a fiscally valid Spanish ID . Thus you may not have a non residents account. The fact your children are at school (state school too) here re-enforces that. You are therefore TAX liable as an individual. End of story in terms of administration. 

(I've just asked - And by having the NIE you are legally a resident unless in a special EU register)

Your hubby may not be officially resident yet - though if he has a NIE - he is.!

There is what is called a EUROPEAN SAVINGS DIRECTORATE (I think that's the name) - basically you (as a brit) open an account here and they check cross check with the UK. This means that the IRS here may already know ALL your personal UK account details.

I had this issue with a UK bank account BUT because it had been open before a date (iirc 2004) it is exempted from the NEED for the BANK to declare and my need to declare it to them. This will activate in the UK the minute you declare the account mailing address to be Spain. But you still need to in Tax declarations (legally).

I'd find an IFA fast! - Your tax returns will be fun - You'll have to declare now as the bank will submit residential returns to hacienda. You should not pay double taxation.


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## SunnySpain (Jul 30, 2008)

As an after thought, does anyone know if Savings are taxed at a "higher rate" in Spain or in the UK ?


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## jojo (Sep 20, 2007)

SunnySpain said:


> As an after thought, does anyone know if Savings are taxed at a "higher rate" in Spain or in the UK ?


The girl in the bank mentioned 18% tax on savings. 

A friend has told me that if I wish to be concidered a"non resident" then i have to go to the police station and register that! Personally, I want to be a Spanish resident and have no objections to anything, its just my husband is banging on about how it is illegal for me to be taxed in both countries and he doesnt want me to be a resident of spain - My view is simplistic and driving him mad (yes there is a row brewing in the Heeley household!!!) As far as I'm concerned, I live in Spain, my kids go to sschool in Spain and I have no intention of going back to the UK - I RESIDE IN SPAIN! surely that makes me a Spanish resident!!?? My husband doesnt really like Spain

Apparently this is all down to a tightening up of the law which was brought in in 2007???

Jo


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## chris(madrid) (Mar 23, 2008)

jojo said:


> my husband is banging on about how it is illegal for me to be taxed in both countries


You can be taxed in two places within the EU - but not DOUBLE. As a SPANISH RESIDENT you cannot escape. If you change to non-resident - my feeling is that your life will get VERY awkward as they have you identified. Certainly the schooling thing will get hard. I'd go as far as to suggest you may find it expedient to leave.

What is paid in the UK can be deducted here - You need to provide TAX receipts. I show UK receipts and they are deducted here. If the UK rate is higher - you wont get it back - If the Uk rate is less you'll have to pay the difference.


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## chris(madrid) (Mar 23, 2008)

jojo said:


> The girl in the bank mentioned 18% tax on savings.


FIND AN IFA Jo - really. Here or the UK as long as they are conversant with both sets of laws. You've been caught and you need a PROFESSIONAL now. It's not really forum fodder, this one.

The savings I bought with me from Germany/UK were NOT retaxed here and they were declared as funds transferred due to change of residence. Patrimonio is not taxed as of this fiscal year - Interest earned IS income and IS taxable. You salary in the UK is taxable here despite being paid in the UK because my understanding is taht YOU are resident in Spain.

The loopholes are closing VERY VERY FAST. Newbies have little chance of escape.

One point - The Spanish tax year is a calendar year. You will be asked to declare earnings etc to end Dec 2008 - Not the UK tax year end.

If you leave - I'll bet they ask for a forwarding address and will come after the tax for the period you were resident.


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## Stravinsky (Aug 12, 2007)

Have you ever done a tax return here JoJo.

You may have seen me in the past suggesting people to do one before, even if it is a NIL return as it was for me. It appears they are more likely to leave you alone if you are doing so rather than if they identify later that you are living here and not declaring.

Theres so much confusion about the tax systems. For one thing Chris is right, you cant be double taxed because there is an agreement. But you might end up having to pay tax and then reclaim it. I know some people who are paying tax on some income in Spain and some in the UK. I know those that are paying all in the UK (but theoretically the Spanish could still come after you for that tax if you are a resident) and some that pay all in Spain ....... and of course those that dont pay at all.

Your hubby is wrong, theres nothing illegal about it. What is slowly happening is that the Spanish tax authorities are beginning in some way to get on top of things. If you have been paying tax in the UK then the theory of it might be that you should pay the difference between the UK rate and the Spanish rate here. Whether that means paying the whole lot here and then re claiming what you paid in the UK, or whether they just take the balance, or whether they find out at all ..... I'm not quite sure.


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## chris(madrid) (Mar 23, 2008)

Stravinsky said:


> Whether that means paying the whole lot here and then re claiming what you paid in the UK, or whether they just take the balance, or whether they find out at all ..... I'm not quite sure.


If you show tax was paid on income in the UK - They will take this into account when you declare tax here and it will be debited from the final Spanish sum payable. Otherwise they'll want it all. 

THEY DO FIND OUT

IFA.


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## EmmaLouUK (Aug 4, 2008)

oh boy >.< doesn't sound too good! After reading this I am a tad unsure of where I stand now as I will need an NIE to work in Spain but of course I will be brining a small amount of money to cover me for 4 months intially, obviouasly I am looking into banks to put that money in as I don't want it laying around my apartment, I have a bank account in the UK with Barclays which I have considered staying with until I saw the insane price to bank with them in Spain! If anyone can put the whole banking thing into prospective for me and put it into spanish banking for dummies terms lol.

Hope things work out for you jojo!

Emma


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## jojo (Sep 20, 2007)

I'd better get an IFA, cos I dont want any hassel. The only reason I'm earning in the UK is partly cos I actually do look after my husbands book for his UK business and partly as a bit of a fiddle there I think cos I dont seem to get any wages, although I apaarently pay tax there!!? That said, OH does give me house-keeping here. As for my savings, well there isnt that much, but most of it is in a sol bank sterling account.

I just want a quiet life in Spain. I dont wnat to "rip anyone off" nor do I want to be "ripped off"

Any reccomendations of a IFA??

Jo


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## chris(madrid) (Mar 23, 2008)

Emma - If the funds are transferred into your new account from a UK account IN YOUR NAME there should be NO ISSUE AT ALL. 

There'd be no attempt from you to hide the fact it's your money and you've moved it. And I'll guess you're not thinking of moving HUGE sums.

I find Barclays in the UK have ALWAYS known how to send funds without it being incorrectly assessed here. I think it was "Transfer of personal funds due to change of residence" - but it's been a long time. I'd start asking them as they do have a Spanish Arm. 

If later your mum or somebody send you more cash as a help - you CAN receive "assistance from family" - But there are (I don't know them) limits on how much and how often. - without it being taxed as income.


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## EmmaLouUK (Aug 4, 2008)

chris(madrid) said:


> Emma - If the funds are transferred into your new account from a UK account IN YOUR NAME there should be NO ISSUE AT ALL.
> 
> There'd be no attempt from you to hide the fact it's your money and you've moved it. And I'll guess you're not thinking of moving HUGE sums.
> 
> ...


Great thanks Chris, I will look into staying with Barclays hopefully i can persuade my mum and dad to sort out the monthly charge for holding an account there with them.

Will update ya when i know a bit more

Emma


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## Stravinsky (Aug 12, 2007)

jojo said:


> I'd better get an IFA, cos I dont want any hassel. The only reason I'm earning in the UK is partly cos I actually do look after my husbands book for his UK business and partly as a bit of a fiddle there I think cos I dont seem to get any wages, although I apaarently pay tax there!!? That said, OH does give me house-keeping here. As for my savings, well there isnt that much, but most of it is in a sol bank sterling account.
> 
> I just want a quiet life in Spain. I dont wnat to "rip anyone off" nor do I want to be "ripped off"
> 
> ...


Dont forget Jo, you have allowances here in Spain. I'm guessing you dont pull a huge salary down in the UK. A retired couple for instance can earn up to about €13k in Spain without tax.

Have a look at this
Notes on Spanish income tax. Spain income tax. Income tax returns Spain. Spanish income tax returns. Income tax Spain.


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## jojo (Sep 20, 2007)

Stravinsky said:


> Dont forget Jo, you have allowances here in Spain. I'm guessing you dont pull a huge salary down in the UK. A retired couple for instance can earn up to about €13k in Spain without tax.
> 
> Have a look at this
> Notes on Spanish income tax. Spain income tax. Income tax returns Spain. Spanish income tax returns. Income tax Spain.



OH has just told me that the "huge" salary I get in the UK is below the tax threshold there ([email protected] employer you see!!!), so maybe its not worth worrying about

Anyway, I'm proud of my new official status as a resident of Spain!

However, one thing I do need to worry about is health cover etc. Thats something I'm ashamed to say I've done nothing about. I assume we're covered by the E106 for emergencies, although my one and only trip to a doctor I went privately and paid 40 euros. 

Jo


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## jojo (Sep 20, 2007)

........ by the way, thanks for all your help and advise, its been a real help. Its nice to be able to chat these things over

jo


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## chris(madrid) (Mar 23, 2008)

jojo said:


> However, one thing I do need to worry about is health cover etc. Thats something I'm ashamed to say I've done nothing about. I assume we're covered by the E106 for emergencies, although my one and only trip to a doctor I went privately and paid 40 euros.


The problem MAY BE that you'll need to register as SELF EMPLOYED to get Spanish cover. You don't have a Spanish employer. And you'll need to contribute SOMEHOW.

As a resident you need cover here and you're earning. Self Employed means 235ish Euros a month. This gives you AND YOUR CHILDREN State health cover. 

Ask the DHSS HERE - take a translator (friend) as explaining is going to be a chore. I'd like to help but I don't know anybody "inside" any more.


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## jojo (Sep 20, 2007)

chris(madrid) said:


> The problem MAY BE that you'll need to register as SELF EMPLOYED to get Spanish cover. You don't have a Spanish employer. And you'll need to contribute SOMEHOW.
> 
> As a resident you need cover here and you're earning. Self Employed means 235ish Euros a month. This gives you AND YOUR CHILDREN State health cover.
> 
> Ask the DHSS HERE - take a translator (friend) as explaining is going to be a chore. I'd like to help but I don't know anybody "inside" any more.


Thanks Chris, I'm on the case!!

Jo


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## Stravinsky (Aug 12, 2007)

jojo said:


> OH has just told me that the "huge" salary I get in the UK is below the tax threshold there ([email protected] employer you see!!!), so maybe its not worth worrying about
> 
> Anyway, I'm proud of my new official status as a resident of Spain!
> 
> ...



No Jo, your E106 is a temporary thing for up to two years. You use it to gain a temporary medical card, but after that you're on your own.
Paying the Spanish NI is going to knock a hole in your wages.


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## LA_Rick (Oct 20, 2008)

*Whoa......Tax on Savings???*



jojo said:


> The girl in the bank mentioned 18% tax on savings.
> 
> A friend has told me that if I wish to be concidered a"non resident" then i have to go to the police station and register that! Personally, I want to be a Spanish resident and have no objections to anything, its just my husband is banging on about how it is illegal for me to be taxed in both countries and he doesnt want me to be a resident of spain - My view is simplistic and driving him mad (yes there is a row brewing in the Heeley household!!!) As far as I'm concerned, I live in Spain, my kids go to sschool in Spain and I have no intention of going back to the UK - I RESIDE IN SPAIN! surely that makes me a Spanish resident!!?? My husband doesnt really like Spain
> 
> ...



I'm just a dumb American but are you saying that they tax you on the amount a money you have in your savings account OR it's 18% tax on the Interest paid during the year??? 

And what's this abou the IRS....is that what they call the Tax Service in the UK because we call them the IRS here in the U.S.?


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## Stravinsky (Aug 12, 2007)

LA_Rick said:


> I'm just a dumb American but are you saying that they tax you on the amount a money you have in your savings account OR it's 18% tax on the Interest paid during the year???
> 
> And what's this abou the IRS....is that what they call the Tax Service in the UK because we call them the IRS here in the U.S.?



Its a tax on your income not your savings ... although up to this year there was wealth tax which WAS a tax on your savings but that is supposed to be gone for next years tax year (the government promised!)

In the UK its HM Revenue & Customs
Here .... its the Bogeyman


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## chris(madrid) (Mar 23, 2008)

Stravinsky said:


> there was wealth tax which WAS a tax on your savings but that is supposed to be gone for next years tax year (the government promised!)


It's legally defined and passed but NOT as yet signed as they are still (it is only October) still dotting "i"s and crossing "t"s - being Spain swapping a few "Ñ" in whera an "N" was. The Tax advisers were told it would happen in 2007. If it does NOT happen the PSOE are out - they know it.


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