# residency and tax help



## m.george (Mar 28, 2013)

Hi

My husband, myself and our children live in Spain. We have no address in the UK anymore. My husband works in the UK 2 weeks on 2 weeks off, (time off is in Spain). We have signed on the padron and have nie numbers and the kids go to school here in Spain. My husband currently pays tax to the UK as he has been told that is the correct procedure by HMRC.

2 questions please: 

1. We need to apply for residency. My husband's income is paid into a Spanish bank account and we have S1 forms for healthcare. Is this enough?

2. Do you think it is correct that my husband pays into the UK system when we live in Spain? HMRC seem quite sure! 

Thanks in advance for your help.


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## thrax (Nov 13, 2008)

For tax purposes it all depends on how long he stays here in Spain. That is what HMRC will be thinking. However, if you are here permanently and he is supporting you and your family then it is my understanding that he is tax resident in Spain. You need to seek the advice of a good accountant. They are not all good however...


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## StewartL (Sep 5, 2013)

HMRC's position in my opinion is correct. Your husband is working in the UK and being paid by a UK company and therefore is subject to UK Income tax.

The rules of the double taxation treaty between the UK and Spain are in place to ensure that you do not pay double tax on the same Income.

In addition there are rules for Spanish tax residents who work in third counties (excluding tax havens) and pay the appropriate tax in the third country to exempt a certain amount of the income 60,100 euros (2010)
http://www.financespain.com/images/Expatriates_Financial_Guide_Spain.pdf

As with all tax matters I strongly agree with Thrax that you should seek independent tax advise from a qualified and good accountant in Spain or with strong knowledge of the Spanish tax rules and legislation.


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## snikpoh (Nov 19, 2007)

StewartL said:


> HMRC's position in my opinion is correct. Your husband is working in the UK and being paid by a UK company and therefore is subject to UK Income tax.
> 
> The rules of the double taxation treaty between the UK and Spain are in place to ensure that you do not pay double tax on the same Income.
> 
> ...



Whilst I agree with you, in the main, I think the OP has at least to submit a tax return in Spain.

Because his 'centre of economic interest' (his family) is in Spain, he is classed as tax resident in Spain.

Any tax paid in UK will then be offset on his Spanish tax return so that he won't have to pay tax twice on the same income.


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## nikkisizer (Aug 20, 2011)

Hello m.george,

Based on the information provided you have been advised correctly by HMRC as your husband would be classed as UK resident for tax purposes.


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## zenkarma (Feb 15, 2013)

m.george said:


> 2. Do you think it is correct that my husband pays into the UK system when we live in Spain? HMRC seem quite sure!


Your husband will have to fill out tax returns in both countries as he will be considered a fiscal tax resident in Spain as well as a paying UK tax on his UK earnings. Due to the dual taxation treaty (DTT) between the UK and Spain any tax paid in the HMRC can be offset against any Spanish tax liability. In practice it may have to be claimed back.

Even though the DDT ensures the same tax isn't paid twice, quite frequently there will be addition tax to pay to the Spanish Hacienda due to the differences in taxable allowances—these tend to be lower in Spain than the UK.

As with all things financial—it's always best to seek professional advice.


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