# Car Dilemma



## Couple10 (May 1, 2016)

Hello,

My family and myself are moving over to Spain mid August (all going to plan) to do a 6 month rental to see how we get on initially. Im currently in a dilemma about the car situation.

1) Do I buy a cheap one over there for us to use and see how we get on. 
2) Take mine or my fiancee's car over there incase we do not settle and end up coming back home. I understand it wouldn't be as easy as that as the headlights need changed/altered and the paperwork involved. 
3) Is there an option to get a long term car rental available in Spain or any other type of deal like that?

Im just looking to what others have done when first moving out there?

Any suggestions appreciated. 

Regards
John


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## snikpoh (Nov 19, 2007)

I'm probably wrong for saying this but .....



I would simply come over for no more than 6 months on UK plates. You will need to make sure your insurance is OK for that long and you will have to put stickers on your lights (to make sure the beam goes in the correct direction etc.).

Any longer than 6 months and I think you have to go the legal route (which you should really do anyway) and convert your car to Spanish plates.

Please note that after 6 months, you are obliged to complete a tax return in Spain - that is, you are considered tax resident and so should pay tax on your world-wide income!


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## Couple10 (May 1, 2016)

Thanks for the reply. Thats what a few friends at home have been saying. Come over with the car for the 6 months and see how it goes. Then take it from there 

I thought the UK has an agreement with Spain if you pay tax in one country you don't in another?


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## xabiaxica (Jun 23, 2009)

Couple10 said:


> Thanks for the reply. Thats what a few friends at home have been saying. Come over with the car for the 6 months and see how it goes. Then take it from there
> 
> I thought the UK has an agreement with Spain if you pay tax in one country you don't in another?


Well yes - but you have to make a tax declaration in your country of residence. If there is a dual tax agreement, it does mean that you don't pay the same tax twice.

However, where tax allowances are different, you can find that you will pay extra tax here


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## snikpoh (Nov 19, 2007)

Couple10 said:


> Thanks for the reply. Thats what a few friends at home have been saying. Come over with the car for the 6 months and see how it goes. Then take it from there
> 
> I thought the UK has an agreement with Spain if you pay tax in one country you don't in another?


The double taxation agreement (DTA) between the UK and Spain does indeed state that you won't pay tax twice on the same income.

However, as a resident of Spain, you are obliged to complete a Spanish tax return. On that return you must declare ALL world-wide income and then you can offset any tax paid elsewhere.

So far so good .... However, if you are resident here, then you should be paying tax here and not in UK - fullstop! So, if you are employed in UK, then you have a problem.

You will also have to make an asset declaration for any assets exceeding 50k euros held outside Spain (property, pension, savings, stocks and shares etc.)


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## Couple10 (May 1, 2016)

Thanks for this, Ive not gave this the consideration it deserves as I thought it was going to be fine with the DTA in place. 

I work abroad 6 months of the year but paid in the UK, my tax affairs are done through deloitte (through my work) Is this going to cause a problem? 

When seeking advice into my situation regarding the tax would I be best doing it in Spain or back in the UK?


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## davexf (Jan 26, 2009)

Hola 

The simple answer is to stay for less than 182 days; that way you will avoid a multitude of problems. Timing can be a key i seem to recollect - something to do with the tax year starting on 1st January 

Davexf


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## xabiaxica (Jun 23, 2009)

davexf said:


> Hola
> 
> The simple answer is to stay for less than 182 days; that way you will avoid a multitude of problems. Timing can be a key i seem to recollect - something to do with the tax year starting on 1st January
> 
> Davexf


True

If the OP comes in August & stays less than 182 days, then he needn't be concerned about tax in Spain

However, if he stays, he will be tax resident from Jan 1st 2017 & will have to submit his first tax return in May/June 2018


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## Jesnat (Mar 5, 2016)

We drove over in our UK car in March with similar plan to yours - see if we liked it and then go from there. There are lots of ads in our local paper, the Costa Blanca News, offering to buy /trade in UK cars. I guess you won't get the best price over here but you have to offset that against the cost of driving it back home and finding a private buyer and then getting back again. Of course we have decided to stay and we traded in our UK car for a modestly priced new one with a main dealer. Couple of tips, if you do come over in your UK car make sure it has good aircon and let your insurance company know what you are doing.


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## Couple10 (May 1, 2016)

Ok I am going to need to look into this further with some tax help. Am I best getting my tax affairs looked into by a Spanish or UK company?


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## Couple10 (May 1, 2016)

Thanks for that Jesnat, my fiancée has an older car so I think we might just use this one to see how we go for the 6 months and then take it from there if we are staying or not. Glad to hear you have decided to stay.


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## snikpoh (Nov 19, 2007)

You can use either a Spanish or UK tax adviser - just make sure that they're good. Delloite are to be recommended.


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## Couple10 (May 1, 2016)

Deloitte do my tax just now through my work. Ill see how we get on when we get over first before I start getting involved in the tax incase we don't like it and its not needed. Add it onto my many lists to do.


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## Couple10 (May 1, 2016)

I'm looking into the possibility to transport our car over instead of doing the drive over. If we did this would we have to register the car? I really don't want to have to do that initially as like I've mentioned before incase we don't settle and end up back in the UK. 
What type of paperwork would we require and does anyone know a rough cost and any good company's they could recommend?
Any info much appreciated as always.


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## Rabbitcat (Aug 31, 2014)

xabiachica said:


> True
> 
> If the OP comes in August & stays less than 182 days, then he needn't be concerned about tax in Spain
> 
> However, if he stays, he will be tax resident from Jan 1st 2017 & will have to submit his first tax return in May/June 2018


Surely if he only arrives in August he's bound to be in Spain less than 183 days as the tax year ends 31/12


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## snikpoh (Nov 19, 2007)

Rabbitcat said:


> Surely if he only arrives in August he's bound to be in Spain less than 183 days as the tax year ends 31/12


Yes, you're both correct.

What @Xabiachica is saying is that if they end up staying in Spain, then they will be tax resident from 1st January 2017 as Spain don't do partial years - its from 1st Jan to 31st Dec. Assuming, of course, they spend more than 183 days in Spain during 2017


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## Couple10 (May 1, 2016)

snikpoh said:


> Yes, you're both correct.
> 
> What @Xabiachica is saying is that if they end up staying in Spain, then they will be tax resident from 1st January 2017 as Spain don't do partial years - its from 1st Jan to 31st Dec. Assuming, of course, they spend more than 183 days in Spain during 2017


I wont spent as much as that in Spain next year as I work 6 months of the year but my fiancée and my son will so that will make me liable anyway I guess.


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## Rabbitcat (Aug 31, 2014)

snikpoh said:


> Yes, you're both correct.
> 
> What @Xabiachica is saying is that if they end up staying in Spain, then they will be tax resident from 1st January 2017 as Spain don't do partial years - its from 1st Jan to 31st Dec. Assuming, of course, they spend more than 183 days in Spain during 2017


My mistake. I thought he wasn't going until August. Bottom line is if you don't arrive in Spain until after 17/7 you won't be tax liable was what I meant


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## xabiaxica (Jun 23, 2009)

Rabbitcat said:


> Surely if he only arrives in August he's bound to be in Spain less than 183 days as the tax year ends 31/12


yeah... that's what I said - if he goes back to the UK after deciding that it isn't for him

however if he stays beyond that & decides to move here he will be tax resident for tax year 2017


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## xabiaxica (Jun 23, 2009)

Couple10 said:


> I'm looking into the possibility to transport our car over instead of doing the drive over. If we did this would we have to register the car? I really don't want to have to do that initially as like I've mentioned before incase we don't settle and end up back in the UK.
> What type of paperwork would we require and does anyone know a rough cost and any good company's they could recommend?
> Any info much appreciated as always.


It doesn't matter how the car gets here.....


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## Rabbitcat (Aug 31, 2014)

xabiachica said:


> yeah... that's what I said - if he goes back to the UK after deciding that it isn't for him
> 
> however if he stays beyond that & decides to move here he will be tax resident for tax year 2017



Lol

I know what you mean - sort of- but if he arrives in August and stays beyond 31/12 he's still not liable unless he stays 183 days the following year. I am not thinking well today at all!!!


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## snikpoh (Nov 19, 2007)

Rabbitcat said:


> Lol
> 
> I know what you mean - sort of- but if he arrives in August and stays beyond 31/12 he's still not liable unless he stays 183 days the following year. I am not thinking well today at all!!!


Correct, that's how I understand it.

They must spend more than 183 days IN A CALENDAR (tax) YEAR to be considered tax resident. 

OR have your centre of interest in Spain and in this case, as your family will be here, then you are immediately tax resident (even this year potentially)!


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## Rabbitcat (Aug 31, 2014)

I think that last one can be a bit watery.

My understanding is ( unless perhaps you have set up a business or significant investment etc) the 183 days in a year is the critical one


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## Couple10 (May 1, 2016)

My family will be there full time near enough as from middle of August. I will only ever be there maximum just less than 6 months due to travel time to and from work etc. 

Ive not set up any business or significant investment, Just paid for my overseas work into a UK bank account. Would that still mean I would be tax resident?


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## Couple10 (May 1, 2016)

Just to add... When we come over we are planning on getting the NIE, register of foreigners and signing on the padron to allow my son to be able to go school.


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## xabiaxica (Jun 23, 2009)

Couple10 said:


> My family will be there full time near enough as from middle of August. I will only ever be there maximum just less than 6 months due to travel time to and from work etc.
> 
> Ive not set up any business or significant investment, Just paid for my overseas work into a UK bank account. Would that still mean I would be tax resident?





Couple10 said:


> Just to add... When we come over we are planning on getting the NIE, register of foreigners and signing on the padron to allow my son to be able to go school.


As far as Spain is concerned, if you are financially supporting your family which is living here, then you are tax resident - regardless of how much or how little time you personally spend here. Unless you can prove to their satisfaction that you are tax resident elsewhere

When you are tax resident you are taxed on your worldwide income 

AM I A TAX / FISCAL RESIDENT? | Learn-Aprender


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