# Declaring assets worth over 50,000



## Flavos (Mar 6, 2014)

Hi what happens when you declare you have a house in the UK worth say £350 ,000 and you pay tax in the UK (if you have rented it out) do you pay tax on its value in Spain as well?


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## thrax (Nov 13, 2008)

Good question. According to our accountant you should only be liable for tax on any income made from the property and then only if you are a tax resident in Spain. But I've seen so many different answers to your question. Let's see what others have to say...


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## extranjero (Nov 16, 2012)

thrax said:


> Good question. According to our accountant you should only be liable for tax on any income made from the property and then only if you are a tax resident in Spain. But I've seen so many different answers to your question. Let's see what others have to say...


As I understand it, from various sources, You are liable to declare income from rental in Spain, but if you don't rent it out you will still have to pay "imputed income" tax on it, ie, on what you would get if you did rent it out, something many out here don't realise.


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## Lynn R (Feb 21, 2014)

extranjero said:


> As I understand it, from various sources, You are liable to declare income from rental in Spain, but if you don't rent it out you will still have to pay "imputed income" tax on it, ie, on what you would get if you did rent it out, something many out here don't realise.


In the same way that anyone who owns a property in Spain but is not resident here, and does not rent the property out when they are not occupying it, has to pay imputed rental tax as part of the annual non-resident tax.


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## thrax (Nov 13, 2008)

This was the point our accountant was making, in that it is against EU laws for Spain to claim such taxes from overseas property where no income has been received. I understand there are a number of cases before the European Courts so it will be interesting to see if Spain takes any notice if the ruling goes against them. In a similar vein, if you hold accounts offshore, you are only liable to pay tax in Spain if you have received interest from the investment. If no interest is claimed you don't pay tax on the gain.


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## Flavos (Mar 6, 2014)

Is there a difference between being a resident and a tax resident? We wont be working in spain and our government pensions are in the category that they can only be taxed in the Uk, we will also be paying tax in the Uk on any rental income from our house in the Uk, will i be taxed again in Spain, despite having payed the tax in the Uk?


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## Flavos (Mar 6, 2014)

Further is their a tax treaty between Spain and the Uk so you don't get taxed twice?


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## xabiaxica (Jun 23, 2009)

Flavos said:


> Further is their a tax treaty between Spain and the Uk so you don't get taxed twice?


yes there is


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## Flavos (Mar 6, 2014)

Still a bit confused! So do you get taxed in Spain as well? Or because you pay the tax due in the Uk on a Uk asset you dont pay tax on it in Spain?


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## xabiaxica (Jun 23, 2009)

Flavos said:


> Still a bit confused! So do you get taxed in Spain as well? Or because you pay the tax due in the Uk on a Uk asset you dont pay tax on it in Spain?


yes you're confused

the dual tax agreement means that if you've paid say, income tax, in the UK but you're resident in Spain, then what you have paid in the UK would be offset against any income tax you'd have to pay Spain - because Spain taxes worldwide income 

you would also have to _declare _your assets over 50,000 (simplification there, it's a bit more complex than that & other forum members understand it more than I do ) - but that isn't tax - it's a declaration


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## Flavos (Mar 6, 2014)

Mmmmm to be fair and having read other threads on this subject, im not the only one who is confused! I guess i will have to speak to a good accountant re the subject! i was hoping there may be someone on this forum who is in a similar situation, i.e. they rent their house out in the Uk ,and pay the due tax in the Uk,but are or are not taxed in spain on the Uk property we have no other assets apart from our house, and we both pay our tax on service pensions in the Uk, any replies ideas welcome, thanks.


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## Williams2 (Sep 15, 2013)

Tell me - would the Expats who only stayed two or 3 years - become disillusioned with Spain
or homesick for Britain and decamped back to the UK - get away without declaring assets
worth over 50,000 ??
Also I've come across a few of Expats who swear blind it's not necessary to declare
assets if you have no intention of staying more than a couple of years anyway.
Perhaps on the assumption that by the time the Spanish taxman finds out - they
would have vacated their rented apartment in Spain or whatever anyway.


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## jojo (Sep 20, 2007)

Williams2 said:


> Tell me - would the Expats who only stayed two or 3 years - become disillusioned with Spain
> or homesick for Britain and decamped back to the UK - get away without declaring assets
> worth over 50,000 ??
> Also I've come across a few of Expats who swear blind it's not necessary to declare
> assets if you have no intention of staying more than a couple of years anyway.



If they're there for more than 183 days, then the should declare and if they stay in Spain for longer than 90 days then they need to become residents

Jo xxx


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## Williams2 (Sep 15, 2013)

jojo said:


> If they're there for more than 183 days, then the should declare and if they stay in Spain for longer than 90 days then they need to become residents
> 
> Jo xxx


True - but were not talking about residence - this is about the declaration of assets
to the Spanish taxman of over £50,000 back in the UK and the premise that the
Expat Resident does a bunk back to the UK without bothering to make any such
declaration and naturally becomes a UK resident again.

Question is - Can the Spanish taxman chase up this Non declaration of Assets if
he's vacated he's rented apartment in Spain and returns to England to become a
UK resident again ????


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## xabiaxica (Jun 23, 2009)

Williams2 said:


> True - but were not talking about residence - this is about the declaration of assets
> to the Spanish taxman of over £50,000 back in the UK and the premise that the
> Expat Resident does a bunk back to the UK without bothering to make any such
> declaration and naturally becomes a UK resident again.
> ...


once you'd left & become tax resident in the UK again Spain won't care - it's not a tax - so once you've gone it's irrelevant to Spain

I'd be more worried about being caught while still _*in *_Spain


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## Flavos (Mar 6, 2014)

We are moving to Spain with 2 small children 8 and 4 and have no intentions of avoiding tax etc, we are going to become residents and do things above board,we wont be staying for a few years under the radar re tax etc, we are just looking for a bit of advice from ex pats who are living in Spain and are declaring similar assets, we certainly don't want to start our new life looking over our shoulders for fear of spanish tax officials landing us with a tax bill and or becoming criminals!this subject is clearly thorny, but we would still welcome opinions from folks in a similar situation, again thanks in anticipation.


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## jojo (Sep 20, 2007)

Williams2 said:


> True - but were not talking about residence - this is about the declaration of assets
> to the Spanish taxman of over £50,000 back in the UK and the premise that the
> Expat Resident does a bunk back to the UK without bothering to make any such
> declaration and naturally becomes a UK resident again.
> ...


But without residence, you might have problems obtaining healthcare? 

Jo xxx


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## Flavos (Mar 6, 2014)

There appears to be a thread within my original thread,we are intending to apply for residencia , we are self sufficient i.e. private healthcare pensions, saving etc, we were after advice re having a property worth £350k and paying tax in the Uk on it if we rent it out,and also still having to pay tax in Spain, is anyone in a similar position? And either A. Declare it and pay tax in Spain re the rental or B don't declare it and risk getting in trouble in Spain any advice please and thanks


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## Roy C (Sep 29, 2012)

I think the simple question Flavos is asking is even though he is paying tax in the UK on his pension and rental income , then if he tells the Spanish tax office about his assets ie: house and rental in the uk will he end up paying tax to Spain as well. I could be in a similar situation and was wondering the same.


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## jimenato (Nov 21, 2009)

Roy C said:


> I think the simple question Flavos is asking is even though he is paying tax in the UK on his pension and rental income , then if he tells the Spanish tax office about his assets ie: house and rental in the uk will he end up paying tax to Spain as well. I could be in a similar situation and was wondering the same.


If the income tax payable in Spain is more than the tax paid in the UK then only the difference is payable. 

When you make the Spanish declaration you tell them how much the income (less expenses) is and how much UK tax you have already paid. They then calculate how much Spanish Tax is due (if any) and you have to pay that less the UK tax already paid.

I think...


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## mrypg9 (Apr 26, 2008)

To which tax authority does a Brit living in the UK pay tax on rental received from a property owned in Spain? To Hacienda.
If you receive rental income from a UK property whilst non- UK resident, you pay tax to HMRC.
You must declare this income to the tax authority of your country of residence but you will not be taxed. You will not be taxed on capital, solely on the income it produces.
You will be asked to declare all assets owned world- wide but this is a declaration and non- productive assets will not incur tax. It's a cross- referencing exercise.
You cannot be taxed twice on the same income but as jimenato points out you can incur tax in Spain if the difference in income exceeds the Spanish allowance.
Ignore those who infer you will face the current equivalent of the Spanish Inquisition if you, your accountant or gestor makes a mistake. I have yet to hear of anyone being burnt at the stake....


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## Flavos (Mar 6, 2014)

Thanks folks I'm starting to get the picture,................................. I think!


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## mrypg9 (Apr 26, 2008)

Flavos said:


> Thanks folks I'm starting to get the picture,................................. I think!


It's not rocket science, millions of Spaniards manage their tax affairs without any problems and although some Brits seem to think they are singled out for 'special treatment' this is not so.
We rented our house for six months after leaving the UK but sold it as we didn't want the hassle and we knew we wouldn't be returning.
We had property in Canada, rental income on which was payable to Revenue Canada or whatever thetax authority was called.
When I sold it I paid tax on the capital gain in Canada.
Most tax rules apply world- wide.


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## Flavos (Mar 6, 2014)

It may not be Rocket science, if you have done all these things but i haven't and was just asking for some opinions from people on this forum about their own experiences and some of the finer details of how it works,thanks all


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## snikpoh (Nov 19, 2007)

Flavos said:


> It may not be Rocket science, if you have done all these things but i haven't and was just asking for some opinions from people on this forum about their own experiences and some of the finer details of how it works,thanks all


I think that's the problem - if you ask for *opinions *then you will get a variety of answers!

What you need are hard facts and these have been given;

If you are here for 90 consecutive days or more, then you are resident and need to get a 'residencia'
If you are here for 183 days or more in any calendar year then you are tax resident and need to fill in a Spanish tax return irrespective of whether you already pay tax on your pension or whatever
If you own assets ANY where in the world of over €50k, then they need to be declared
If you own a property outside of Spain, then you must pay tax on the income (iputed or otherwise)
Any tax paid in any country having a double-taxation agreement (like UK) with Spain, can be offset on your Spanish tax return


Hoping this is clear - not opinions, just facts.


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## Flavos (Mar 6, 2014)

Ah yes i see the mistake i made in asking for opinions,instead of facts, good point and thanks for the list of facts it has made it crystal clear!


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## Roy C (Sep 29, 2012)

As the UK may be looking at doing away with ex pats tax allowance , would it then be possible to pay spain the tax on the rental instead of the uk so at least you would receive a tax allowance all being a smaller one. Sorry for throwing a spanner in the works but this may be relevant to the op and me.


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## Lynn R (Feb 21, 2014)

Roy C said:


> As the UK may be looking at doing away with ex pats tax allowance


All the reports I've read about this idea (which is all it is at the moment) say that it wouldn't apply to people living in other European countries, so I wouldn't worry too much about it.


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## snikpoh (Nov 19, 2007)

Also, the allowances in Spain on property are not the same as the allowances on property in UK - AFAIK


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## Flavos (Mar 6, 2014)

Thanks again folks for the replies and various points that have been made,i guess i will speak to a Uk accountant re my asset etc then hopefully armed with his dealings of our asset, i will fill in he relevant spanish declarations,together with a Gestor who will have all the facts concerning any declarations we make thanks.


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## Aron (Apr 30, 2013)

If anyone is well below the threshold, they need not to declare. However, one sobering thought, as many expats own premium bonds and you were lucky enough to win the one million pound prize, just think how much tax you will owe the following June. Even just winning £50,000, that is still a heap of tax!


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## Flavos (Mar 6, 2014)

Interesting point,i know there is a dual tax treaty,but didn't realise there is a treaty between the counties in relation to bonds i.e. The sharing of information


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## Aron (Apr 30, 2013)

Flavos said:


> Interesting point,i know there is a dual tax treaty,but didn't realise there is a treaty between the counties in relation to bonds i.e. The sharing of information


If you have the maximum, £30,000 of premium bonds, you wouldn't need to declare that, unless you had other bonds or shares. However, winnings from premium bonds are taxable in Spain. If you notify the NS&i that you live in Spain, they will ask for a tax reference which is probably your NIE


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## Flavos (Mar 6, 2014)

Thanks, there are some interesting points you raise.


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## mrypg9 (Apr 26, 2008)

Thinking about it, I'm not best pleased that I am paying several £000s a year in tax to the UK, a country I don't live in and never will and will probably set foot in once a year if that from now on, having used nearly all my accrued BA airmiles.

I'm now paying tax on what is deferred income aka pensions, income I paid tax on when I was earning in the UK...


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## zenkarma (Feb 15, 2013)

Flavos said:


> Hi what happens when you declare you have a house in the UK worth say £350 ,000 and you pay tax in the UK (if you have rented it out) do you pay tax on its value in Spain as well?


You don't pay tax on its value.

The declaration of assets is exactly that—a declaration, not a tax.

With regards to the income received from it (in terms of rental income) this is treated as earned income by the Spanish tax authorities and will be liable to taxation (if your total income exceeds the personal limits) _if_ you are a Spanish fiscal tax resident.

Due to the double taxation agreement between Spain and the UK, any tax already paid to HMRC can be offset against any tax liability to the Spanish tax authorities and vice versa.


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## Aron (Apr 30, 2013)

Flavos said:


> Interesting point,i know there is a dual tax treaty,but didn't realise there is a treaty between the counties in relation to bonds i.e. The sharing of information


The dual taxation treaty between Spain and the UK commenced in 1975. If you have to pay tax for whatever reason in the UK, that will be offset when you do your tax return in Spain. If you have any tax free savings in the UK, premium bonds, ISA's etc, then you must pay tax on that in Spain, and yes, it will be part of the tax directive.


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## Flavos (Mar 6, 2014)

The original question i asked has thrown up a multitude of issues and i have had a learned lesson in opinions and fact! So is it the case that if our accountant deals with out asset i.e. Our house and also if we had any premium bonds that pay out, with a bit of skilled work (all legal) we have nothing to worry about in the declaration of assets form, sound good to me, and as of 3 August my family can live the dream!


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## Aron (Apr 30, 2013)

Flavos said:


> The original question i asked has thrown up a multitude of issues and i have had a learned lesson in opinions and fact! So is it the case that if our accountant deals with out asset i.e. Our house and also if we had any premium bonds that pay out, with a bit of skilled work (all legal) we have nothing to worry about in the declaration of assets form, sound good to me, and as of 3 August my family can live the dream!


I hope you enjoy your time in Spain


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## el pescador (Mar 14, 2013)

Has anyone done their own return?

Whats the rental accommodation allowance all about?


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## Flavos (Mar 6, 2014)

Thanks Aron.


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## JoseRubio (Apr 27, 2014)

Hi,
The obligation to declare assest abroad is for Spanish Tax Residents. Being this the case, you are obliged to declare your worldwide assets which include your incomes for renting your property abroad, at the time to do your RENTA (tax return) in Spain. 

Not being UK tax resident, you should not be taxed for your income there. 
If for any reason you are taxed anyway (some times this happens) the Double Taxation Agreement is there to prevent a tax-payer to pay in two countries for the same income.

When you do your RENTA you can report the tax paid in other EU Country for that income and this amount will be deducted from the tax due here ( if there was any ).


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## extranjero (Nov 16, 2012)

JoseRubio said:


> Hi,
> The obligation to declare assest abroad is for Spanish Tax Residents. Being this the case, you are obliged to declare your worldwide assets which include your incomes for renting your property abroad, at the time to do your RENTA (tax return) in Spain.
> 
> Not being UK tax resident, you should not be taxed for your income there.
> ...


I think you have written this in a confusing way
When you are not UK tax resident you SHOULD be taxed for your income from there!
The obligation to declare assets abroad is for ALL residents in Spain, Spanish or not. If they are here more than 183 days, then they are tax residents who, apply to the UK to be exempt from taxes on their UK income(except government pensions)
Your post does not make this clear.


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## JoseRubio (Apr 27, 2014)

Hi all,
I have rephrased my previous answer because, as Extranjero pointed to, led to confusion. 
I hope it is better now.
The obligation to declare assest abroad is for Tax Residents of Spain, though it does not necessarily involve the payment of any tax.
However, if you are getting some income from your property there, as tax resident of Spain, you are obliged to declare your worldwide incomes which include your incomes for renting your property abroad, at the time to do your RENTA (tax return) in Spain. 

Not being UK tax resident, you should not pay the tax for your rental income *to *UK but *to*Spain.
At least, theoretically. Having said this: Spain does make non-resident from UK to pay tax for their rental incomes of properties in Spain *to* Spain.!?
Anyway,If for any reason you pay any tax in UK (some times this happens because the Payer is obliged to deduct your tax, for example, when the government pays a pension ) the Double Taxation Agreement is there to prevent a tax-payer to pay in two countries for the same income.

When you file your (resident) tax return in Spain you just have to let them know that tax has been already paid in other EU Country for that income and this amount will be deducted from the tax due here ( if there was any ).

What about now? Clearer?


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## Kimnsim (Jan 15, 2014)

Lots of interesting information in this thread. Do you get a personal allowance in Spain similar to the U.K? If so if its higher than the U.K. level then if you pay your taxes in U.K. under the double taxation agreement you're unlikely to incurr any liability in Spain. Right?


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## snikpoh (Nov 19, 2007)

Kimnsim said:


> Lots of interesting information in this thread. Do you get a personal allowance in Spain similar to the U.K? If so if its higher than the U.K. level then if you pay your taxes in U.K. under the double taxation agreement you're unlikely to incurr any liability in Spain. Right?


IF that were the case, then you would be correct.

In general, the Spanish allowances are lower than UK ones.

Take a walk with Google and read up on Spanish taxation. (Advoco is a good place to start)


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## Flavos (Mar 6, 2014)

Can you be a resident in Spain without being a tax resident? As if you have residencia you are required to fill in a yearly tax return?


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## xabiaxica (Jun 23, 2009)

Flavos said:


> Can you be a resident in Spain without being a tax resident? As if you have residencia you are required to fill in a yearly tax return?


it's two entirely different things

you are technically resident after 90 consecutive days, and are expected to register as such

tax residency doesn't kick in until 182+ days, in a calendar year - & they don't have to be consecutive (there are other triggers, but that's the most usual)

clearly you can be a_ registered resident_ & not spend enough days in a tax year to be tax resident

to be on the safe side you should 'unregister' as resident when you leave, though most people probably don't bother - but if the Spanish tax office started asking questions the onus would be on you to prove your absence, as opposed to them having to prove your presence!


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## jimenato (Nov 21, 2009)

xabiachica said:


> it's two entirely different things
> 
> you are technically resident after 90 consecutive days, and are expected to register as such
> 
> ...


Do you mean uregister as resident or unregister as tax resident?


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## snikpoh (Nov 19, 2007)

jimenato said:


> Do you mean uregister as resident or unregister as tax resident?


... actually, I suspect it should be both (*de*register that is).


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## JoseRubio (Apr 27, 2014)

What is commonly called 'residencia' is the registration in a census of EU citizens living in Spain.
Lately they have become more strict in granting this. Now, they request having sufficient means of sustenance and health services covered by a public or private insurance, among others. 

Another different thing is being Tax Resident, that is, that you pay for your worldwide incomes in this country. having the 'residencia' card does not imply this.


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## extranjero (Nov 16, 2012)

It does if you stay over 183 days!


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## Tamara Colmenar (Apr 27, 2014)

JoseRubio said:


> Hi all,
> Not being UK tax resident, you should not pay the tax for your rental income *to *UK but *to*Spain.


As I understand it, property rental income is a specific item, taxable only in the country where the rental property is located. This applies to Spanish properties rented out while the owners are in the UK, AND to UK property when the owners live in Spain. If anything else triggers a tax return (ie being tax-resident in Spain) then the UK rental income needs to be declared, alongside the tax paid on it in the UK, and further tax is only due if other income streams bring the total income to above the Spanish tax threshold.


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## JoseRubio (Apr 27, 2014)

Tamara Colmenar said:


> As I understand it, property rental income is a specific item, taxable only in the country where the rental property is located.


That is certainly so.
Thanks for pointing it.


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## JoseRubio (Apr 27, 2014)

A bit more to the subject of residency:
It is true that having the residencia card may imply that you are here for a long time.
However,having this card is not considered proof enough of Tax Residency.( at least when being tax resident is to your advantage)

In practise, one thing is meeting the criteria and other is being acknowledged as such straight away.

For instance,The law states that you become tax resident of the country in which you have your main source of income. If you are self-employed in Spain or have a work contract as an employee, you already are tax resident. ( maybe unknowingly). 

But,once again, having a contract or a self employed registration is not considered proof enough.
Besides, agencies do not normally communicate very well and if you ask for a certificate to Hacienda for, say, not having to pay imputed tax on your residential house or enjoying a particular tax allowances in the inheritance tax or not being withhold part of the payment after selling your property, you may find out that, in their records, you are still considered non-resident.

In practise, and to be sured, you become registered as a resident when you start filing your annual tax return or, if you are not obliged to file it, submit form ( modelo) 030 to report your status. ( and you stop being resident when filing the same 'modelo' to inform them that you are leaving)

Of course, if your being resident is convenient for Hacienda, they will find proof that you have been here more that 183days!
What do you guys think?


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