# Tax Laws - Help



## Stuart M (Oct 3, 2014)

Good Morning Everybody
Thanks for your advice re questions of a move to Spain.
But can I ask for an "Idiots guide to Spanish Tax Law"

If I have my savings in England and pay tax in that Country I gather that I have to declare to the Spanish Government anything I have over £50,000 euros.

But if I do, do I have to pay tax again to Spain even though it has been taxed in the UK, also if I have to become a Spanish resident, but not Spanish National, does this not leave me open to the Spanish Government taking some of my savings if the economy worsens, like what happened in Greece.

If my savings do not accrue interest in the UK, do I still have to declare them or are they exempt as I am not getting anything extra on them.

It is all so confusing, but I do not want to run the risk of penalties etc, but from what I gather many persons, especially like me who would rent not own, do not do this declaration anyway.

Any advice from those of you that know by living in Spain now would be most helpful to ease my confused mind.


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## Pesky Wesky (May 10, 2009)

Unfortunately these questions are difficult to answer because of the complexity and individuality of each case. Look here for information from the experts
Spanish Tax Agency website in English
Tax Agency - Home
Institute of Chartered Accountants of England and Wales - Spain 
Spain | Tax by country | Tax | Library | ICAEW


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## Lynn R (Feb 21, 2014)

Stuart, it is quite simple. If you move to Spain, once you have spent 183 days here in a Spanish tax year (1 January - 31 December) then you become tax resident in Spain. Being Spanish national or not has nothing to do with it, that applies to anyone of any nationality who comes to live here. All Spanish tax residents have to make an annual declaration of all their worldwide income to the tax authorities (well, there a few exceptions but they wouldn't apply to your situation). If they have overseas assets amounting to more than €50,000 in any one asset class (which could be a house, money in the bank, shares, etc) then they must also declare details of those each year.

Making that overseas assets declaration does not mean that you pay any extra tax on the income you receive from those assets because you should declare that income and pay tax on it anyway (and does anybody really keep more than €50,000 in an account they don't get any interest at all on? Even if it's in Premium Bonds any winnings have to be declared and taxed in Spain). The people who tell you the Spanish Government would steal some of your money if you submit these returns are just scaremongering, IMO.

We all know that there are people who have moved here and don't register as residents, go back to the UK and use the NHS for their healthcare needs (which they should not do), don't submit Spanish tax returns or pay tax here although they're happy to use the facilities Spanish taxpayers fund, don't declare their overseas assets, don't rematriculate their UK plated cars, etc. etc. They all run the risk of incurring penalties if they are found out, and I am sure nobody on this forum would encourage you to become one of them.

It is quite possible that if you moved here you would have to pay more tax than if you stayed in the UK. You should speak to a Spanish tax advisor as Pesky Wesky said to find out exactly what you would need to pay on your income. But remember this - you wanted to move to Spain because you believe you can have a good life here on a limited income. You can't have the good things about a country unless you're prepared to take the not so good along with them. Not unless you're into cheating the system.


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## Lynn R (Feb 21, 2014)

By the way, the requirement to declare overseas assets is by no means unique to Spain. Residents in America, Australia, France, Italy, Germany to name but a few all have similar rules, some of them with lower limits and harsher penalties for non-declaration than Spain has.


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## Stuart M (Oct 3, 2014)

*tax*

Many thanks to my private message, if you could forward me the details you mentioned I would be most grateful so that I can make my own enquiries


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## el pescador (Mar 14, 2013)

Talking of declaration.
Anyone know the process?


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## Pesky Wesky (May 10, 2009)

el pescador said:


> Talking of declaration.
> Anyone know the process?


Look at the links, it's all there


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## el pescador (Mar 14, 2013)

Whilst on my research i stumbled across this gem.

Agencia Tributaria - En el caso siguiente, en el que una entidad residente tiene tres cuentas bancarias en el extranjero,...regunta, ¿existe obligación de declarar?

Would someone care to explain this?
Also what i was really after was the "average" figure and what date of the month you use in the last 3 months for the accounts?
Also do we use the exchange rate to convert to euros?(presume a yes)


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## Stuart M (Oct 3, 2014)

Thanks for that, must admit it complicates things even further as one one hand they state you must declare all assets over 50,000, but that looks as though it says you do not have to declare all the sums if they in accounts under 50,0000, so if you had total assets of 100, 000, you should declare 50,000, but if of that 100,000 - 50,000 was in one account and the remainder in 3 seperate ones of lets say, 20,000, 20,000 and 10,000 then they should not be declared - unless of course I am reading it wrong


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## snikpoh (Nov 19, 2007)

Stuart M said:


> Thanks for that, must admit it complicates things even further as one one hand they state you must declare all assets over 50,000, but that looks as though it says you do not have to declare all the sums if they in accounts under 50,0000, so if you had total assets of 100, 000, you should declare 50,000, but if of that 100,000 - 50,000 was in one account and the remainder in 3 seperate ones of lets say, 20,000, 20,000 and 10,000 then they should not be declared - unless of course I am reading it wrong


Yep, you're reading it wrong.

The rules are that you must declare ALL accounts where the total of funds exceeds 50k. So, if you have 10 accounts with 5k in each, then they all need declaring.

Equally for each of the other asset classes - for example, if you have two houses, one worth 30k and one 25k (if only in UK) then they both need declaring as well.

Hoping this is now clearer.


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## Stuart M (Oct 3, 2014)

Thanks to you all who have replied. must admit I am 100% sure to do every thing legally, apart from fine wise but for my own peace of mind knowing that I can settle without "getting a knock at the door". I will have to look at an accountant for advice on my assets and more so inb that do I have to make a declaration every year if they do not increase and also that I gather my Police pension does not have to be declared


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## extranjero (Nov 16, 2012)

Yes, your police pension must be declared though will continue to be taxed in the UK. It will be taken into account when your tax base is worked out in Spain.
Your assets declaration need only be made again if any asset increases by 20 k or more, or if a new account , investment etc is opened or closed, property acquired/sold etc.


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## Stuart M (Oct 3, 2014)

Thanks for your advice snikpoh, but again if you read that link that el pescador put on then it does rather muddy things


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## extranjero (Nov 16, 2012)

Stuart M
Why not go to the Blevin Franks website, they are the most well known financial advisors in Spain.
You can also download a free tax guide, which is regarded as the "Bible" of tax info.
If you still have any questions after reading it. You can contact them
In Spain there is so much conflicting advice on the complicated Spanish tax system, you need to go to the experts.
If you choose a local tax advisor, check that they are familiar with both UK and Spanish tax systems, as some are ignorant of how they interrelate.
Acting on wrong advice means that you, not the tax advisor, will be blamed if your tax returns are wrong.


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## Stuart M (Oct 3, 2014)

Hi extranjero, your advice is greatly appreciated and I will follow up on what you indicated with regards to the website, but like most of them unless you are an accountant then most of it is double dutch to me, but then again that is why you go to an accountant for advice.
Police stuff no problem, I can help you out till the cows come home, but "Numbers" I am afraid I am totally blind


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## Stuart M (Oct 3, 2014)

*Tax - Part 2*

Good Morning
Thanks to all of you that offered advice on my previous question about Taxation.
I have followed up most but this item still baffles me. I also have one other request for advice as well which are shown below.

Question - If I file a first Tax declaration of all my asset's over 50,000 euros, do I have to file one every year after if my asset's do not go up at all and may go down.
I will not be working but will have a personal pension, Civil Service, so has to be taxed in the UK.

Advice - I know I will need an Accountant for the first Tax return, but worry as some are not as shall we say above board as others and get you to declare things you do not need to just to drum up business for themselves. I will be living in the Benalmadena Area, so does anybody use an accountant that they can recommend and also where they are located.


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## larryzx (Jul 2, 2014)

Stuart M said:


> Question - If I file a first Tax declaration of all my asset's over 50,000 euros, do I have to file one every year after if my asset's do not go up at all and may go down.
> I will not be working but will have a personal pension, Civil Service, so has to be taxed in the UK.
> 
> Advice - I know I will need an Accountant for the first Tax return, but worry as some are not as shall we say above board as others and get you to declare things you do not need to just to drum up business for themselves. I will be living in the Benalmadena Area, so does anybody use an accountant that they can recommend and also where they are located.


The 50,000 is on asset outside Spain. They are divided into 3 groups, so if any group amounts in total to 50,000 them you must make a declaration. If then amounts declared increase or decrease by 20,000, or you open or close an account (even by transferring 'the same' funds) then the following year you must declare again.

I am surprised that you imply that accountant/gestors are less tha honest 'drum up business' even if many are not 100% competent. 

PS Whilst your Crown Pension is taxed in UK, all other income worldwide (except rental income) including OAP is taxed in Spain and must be declared.

PPS if you google 'spain from 720' you will find masses of info


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## snikpoh (Nov 19, 2007)

larryzx said:


> PPS if you google 'spain from 720' you will find masses of info


Probably even more *relevant* info if you google 'Spain *form *720'


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## larryzx (Jul 2, 2014)

Well spotted, although Spain form 720 gets searched anyway of one googles 'Spain from 720'.


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## Stuart M (Oct 3, 2014)

larryzx said:


> The 50,000 is on asset outside Spain. They are divided into 3 groups, so if any group amounts in total to 50,000 them you must make a declaration. If then amounts declared increase or decrease by 20,000, or you open or close an account (even by transferring 'the same' funds) then the following year you must declare again.
> 
> I am surprised that you imply that accountant/gestors are less tha honest 'drum up business' even if many are not 100% competent.
> 
> ...


I think you misunderstood what I meant, I know people who live in the Benalmadena and have had bad experiences with an English based accountancy company whp kept charging them for writing letters when there was no need to write them in the first place.


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## larryzx (Jul 2, 2014)

Stuart M said:


> I think you misunderstood what I meant, I know people who live in the Benalmadena and have had bad experiences with an English based accountancy company whp kept charging them for writing letters when there was no need to write them in the first place.


That is what the 'legal profession do' everywhere in the world.

For the declaration you need just ask what a gestpr (you don't need an accountant) will charge and shop around.


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## Stuart M (Oct 3, 2014)

larryzx said:


> That is what the 'legal profession do' everywhere in the world.
> 
> For the declaration you need just ask what a gestpr (you don't need an accountant) will charge and shop around.


Thanks, but would a gestpr be able to tell me if I am better off being taxed in the UK or Spain? that is why I was looking at an Accountant


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## Pesky Wesky (May 10, 2009)

Stuart M said:


> Thanks, but would a gestpr be able to tell me if I am better off being taxed in the UK or Spain? that is why I was looking at an Accountant


Gestor.
Larry seems to have typo problems today


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## Stuart M (Oct 3, 2014)

Pesky Wesky said:


> Gestor.
> Larry seems to have typo problems today


Gathered that when I googled gestpr


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## Lynn R (Feb 21, 2014)

extranjero said:


> Stuart M
> Why not go to the Blevin Franks website, they are the most well known financial advisors in Spain.
> You can also download a free tax guide, which is regarded as the "Bible" of tax info.
> If you still have any questions after reading it. You can contact them
> ...


Stuart, I think you should consider this suggestion from Extranjero earlier in the thread, to get some financial advice from a firm such as the one she mentions who are experienced in dealing with both the UK and Spanish tax regimes. You would have to pay for the advice, and although I don't know how much that would be I believe it doesn't come cheap. But asking for a consultation and how much the charge would be would cost nothing, and you might feel it worth the money to fully understand the implications of your proposed move to Spain.


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## kurt85 (May 7, 2013)

Lynn R said:


> Stuart, I think you should consider this suggestion from Extranjero earlier in the thread, to get some financial advice from a firm such as the one she mentions who are experienced in dealing with both the UK and Spanish tax regimes. You would have to pay for the advice, and although I don't know how much that would be I believe it doesn't come cheap. But asking for a consultation and how much the charge would be would cost nothing, and you might feel it worth the money to fully understand the implications of your proposed move to Spain.


As I work for one of these companies, you will find you can get the advice for free, an introductory meeting, where they will give you the advice as, if you want to take up one of the products there is a commision at that point but they will look at your situation and give you the advice 

All the best,

Kurt


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## larryzx (Jul 2, 2014)

Stuart M said:


> Thanks, but would a gestor be able to tell me if I am better off being taxed in the UK or Spain? that is why I was looking at an Accountant


Of course you cannot choose where to be taxed, although you can choose to adjust the time you spend in a country and whether to changed your 'centre of activities'' from one country to another and thus avoid becoming tax resident where you choose not to.

A gestor would of course be able to advise you on where you are tax resident.


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## Stuart M (Oct 3, 2014)

kurt85 said:


> As I work for one of these companies, you will find you can get the advice for free, an introductory meeting, where they will give you the advice as, if you want to take up one of the products there is a commision at that point but they will look at your situation and give you the advice
> 
> All the best,
> 
> Kurt


Thanks Kurt85 - which company do you work for, they may have an office in the Benalmadena area?


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## kurt85 (May 7, 2013)

Stuart M said:


> Thanks Kurt85 - which company do you work for, they may have an office in the Benalmadena area?


I cant say on here, due to forum rules, think I can PM you, however dont want to get in trouble with the forum, Its very useful  

Our closest office would be at the Miramar Parque in Fuengirola.

Kind Regards,

Kurt


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## Stuart M (Oct 3, 2014)

kurt85 said:


> I cant say on here, due to forum rules, think I can PM you, however dont want to get in trouble with the forum, Its very useful
> 
> Our closest office would be at the Miramar Parque in Fuengirola.
> 
> ...


Many thanks Kurt, I will look into it


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## pnwheels (Mar 3, 2013)

larryzx said:


> PS Whilst your Crown Pension is taxed in UK, all other income worldwide (except rental income) including OAP is taxed in Spain and must be declared.


I thought you had to declare ALL income.....is rental income really exempt?


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## extranjero (Nov 16, 2012)

pnwheels said:


> I thought you had to declare ALL income.....is rental income really exempt?


I thought so too. Surely all income from wherever has to be declared; if tax has already been paid on it in UK it is offset against tax in Spain?
Larryzx, please explain!


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## larryzx (Jul 2, 2014)

pnwheels said:


> I thought you had to declare ALL income.....is rental income really exempt?


See quote below. But note, I understand, you still have to declare the rent in Spain and maybe pay a top-up amount. I have never been in that situation so I do not have personal experience.

HM Revenue & Customs: Tax on UK income or capital gains for non-UK residents

_Rental income from property in the UK

If you're not resident but still receive rental income from the UK, you will pay UK tax on that income.

This type of income is dealt with by HMRC Non-resident Landlord Scheme. The scheme requires either your tenant or your letting agent to deduct basic rate tax from the rental income they pay to you if your usual home is outside the UK. You may need to complete a tax return to tell HMRC about the rental income and the tax already paid. You can make an application to receive rental income with no tax deducted when the rental income is paid to you but you will still be liable for the tax due . Find out more in the guide below._


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