# moving to Asturias and need help on tax situation



## rosseden (Jan 7, 2015)

Hi all, I'm Ross, im new to the board but have been reading maaany posts as I'm helping my in-laws for a while now as they are moving to Asturias in Spain with work for a few years. Its all happened quite quickly so I haven't been able to do as much research as I'd liked to have, but I'm trying to get my head round the tax system. 

As I understand it, income tax is fairly straightforward, so not too worried about that, they get taxed on earnings and if taking any uk private pension, that gets taxed as earnings the same way it would in the UK? however, the other bits have pickled my tiny mind. 

They are early 60's, both have private pensions in the UK, some are already paying out monthly, they have a house they will sell rather than leave empty as they will relocate on their return, and a couple of things to mature in the coming years. 

So, they have to declare their total worth for 'wealth tax' if this is below 1.4m euros, or is it 2m euros, which it is under both, there is no tax to pay, but they must declare all monies. I.e. an endowment, private pensions, house value, or the cash if sold, etc etc. 
If they get any tax free lumps in the UK, they would be taxable in Spain as earnings when they go it?

Is that it in a nutshell, or have I missed something? Also, any advice on the best way to find a decent accountant to do any local paperwork in that area too? 

Any help much appreciated

Ross


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## Williams2 (Sep 15, 2013)

rosseden said:


> Hi all, I'm Ross, im new to the board but have been reading maaany posts as I'm helping my in-laws for a while now as they are moving to Asturias in Spain with work for a few years. Its all happened quite quickly so I haven't been able to do as much research as I'd liked to have, but I'm trying to get my head round the tax system.
> 
> As I understand it, income tax is fairly straightforward, so not too worried about that, they get taxed on earnings and if taking any uk private pension, that gets taxed as earnings the same way it would in the UK? however, the other bits have pickled my tiny mind.
> 
> ...


First of all - tell your In-laws. Welcome to Asturias !! Believe it or not there are
British Expats here, some even working Expats - a fact which many members on
this forum 'are absolutely flabbergasted about' and think I'm forever 'pulling their
leg' :bounce:

I don't hold with giving advice, so all I can say is - In my humble opinion ( IMHO )
they should look at selling and completing the sale of their former home in
the UK before they are deemed 'tax resident in the Spain' that way they will
still be exempt from Capital gains tax in the UK and obviously don't have
to declare it in Spain.
Although have they considered the opposite first - namely renting it out for the
'rental income'

As for 'wealth tax' Pensions, Endowments, etc. Well that's a bit of minefield and
best speaking to qualified Financial advisers and accountants in the UK and Spain.
The good news is there is a double taxation treaty between Britain & Spain and
therefore you shouldn't be taxed twice for the same thing.

You will find that life in Asturias revolves around the 3 cities of Aviles, Gijon and
Oviedo. Pretty much anything that 'goes on here' pretty much revolves around
these 3 cities with Oviedo being the provincial capital of Asturias. If you live in
or close to, any of the 3 cities it takes next to no time - 30 to 45 minutes by
road to travel to any one of them.
It goes without saying that you will find the best Solicitors, Accountants, Gestors
in Oviedo, although they are represented in the other 2 cities - you will find 
less choice, than in Oviedo.
Finally - tip for the best internet access - cable TV supplier, Telecable has 
fibreoptic connections to most apartments and houses in Asturias. No doubt
good Internet access 'would be a must for your inlaws' therefore always ask
whether the house or Apartment is connected to Telecable. All 3 cities have
it but when you get 'out into the sticks' Telecable access is patchy.

Also useful - Cortes Ingles card 4 per cent cash back on petrol bought
at any Repsol or Petronor filling station, also there's a Spanish bank that gives
4 per cent cash back on direct debits for Gas, Electricity, phone & internet
( only caveat - so long as they see at least 700 Euro's a month coming into
the bank account & no banking charges )


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## rosseden (Jan 7, 2015)

That's fantastic, thanks for the reply, they're selling the house as its a remote country cottage and its, I guess you'd easy, partially modernized. It really needs some work to be rented out but they will relocate to the midlands on their return so it seems pointless spending on it for such a short space of time. 

I'm going to do my best to get the house sold before theyve been there 182 days! Fingers crossed I can, that should solve the only 'grey area' judging by the wealth tax bits I have read, it seems the threshold is 2m euros for a couple, they're well under that so hopefully no issues. Do you know any good accountants in the area? They're renting a small place in the sticks about half hour from oviedo i think, they have satellite internet fitted already, they both work in I.T. so i think theyll be using a virtual machine in the uk and streaming uk tv! They left today with a van full of possessions, hopefully for a smooth boat ride over! 

How much of an expat community is out that way, are there any get togethers or places Brits frequent? They'll be skiing a bit and plan to bring a motorbike out early summer too so any advice on either activity greatly received! 

Thanks again

Ross


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## Williams2 (Sep 15, 2013)

rosseden said:


> they both work in I.T.
> 
> Thanks again
> 
> Ross


Would that be CSC ?


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## rosseden (Jan 7, 2015)

Williams2 said:


> Would that be CSC ?


yup, it is indeed, do you know the place? or do you work there or something?


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## Williams2 (Sep 15, 2013)

rosseden said:


> yup, it is indeed, do you know the place? or do you work there or something?


In that case - Welcome to CSC Asturias. I know them - are the in-laws into Mainframe here ?


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## xabiaxica (Jun 23, 2009)

rosseden said:


> That's fantastic, thanks for the reply, they're selling the house as its a remote country cottage and its, I guess you'd easy, partially modernized. It really needs some work to be rented out but they will relocate to the midlands on their return so it seems pointless spending on it for such a short space of time.
> 
> *I'm going to do my best to get the house sold before theyve been there 182 days*! Fingers crossed I can, that should solve the only 'grey area' judging by the wealth tax bits I have read, it seems the threshold is 2m euros for a couple, they're well under that so hopefully no issues. Do you know any good accountants in the area? They're renting a small place in the sticks about half hour from oviedo i think, they have satellite internet fitted already, they both work in I.T. so i think theyll be using a virtual machine in the uk and streaming uk tv! They left today with a van full of possessions, hopefully for a smooth boat ride over!
> 
> ...


the way it works, if they are here 183 days Jan 1st to Dec 31st (the Spanish tax year) they are tax resident. If the property is sold during that same tax year - even if it's sold before they arrive in Spain - they are liable for the tax.....


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## rosseden (Jan 7, 2015)

Williams2 said:


> In that case - Welcome to CSC Asturias. I know them - are the in-laws into Mainframe here ?


i believe so, but im not totally sure, i get lost after the first few words when they talk IT! 

Judging by the CGT situation however, it may not be they stay for long! even if they sell the house in the Uk tax year and work for 183 days in Spain, they would be liable for tax in Spain, which seems insane. so im guessing the jobs they couldnt fill will go unfilled again. I cant see how thats any good for the economy, but then again, judging by the apparent mess in spain, its hardly surprising!


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## Williams2 (Sep 15, 2013)

rosseden said:


> i believe so, but im not totally sure, i get lost after the first few words when they talk IT!
> 
> Judging by the CGT situation however, it may not be they stay for long! even if they sell the house in the Uk tax year and work for 183 days in Spain, they would be liable for tax in Spain, which seems insane. so im guessing the jobs they couldnt fill will go unfilled again. I cant see how thats any good for the economy, but then again, judging by the apparent mess in spain, its hardly surprising!


Yes well if CGT is an issue and there sojourn in Spain, is likely to be a short one.
Then the other option is to hang onto their UK house ( perhaps only renting it out )
and wait until they return to working or retiring in the UK for good. Then sell the
house, once they are fully resident in the UK again, without any tax liabilities in Spain. 
Might have to wait a year a two to ensure full UK tax and residence liability
but worth it, if they can wait.
All assuming they still want to sell it - when they get back ?

Also - no I don't know or have any dealings with accountants in the area.
Finally the Picos de Europa is the best local skiing area, up in the Cantabrian
mountains, midway between Oviedo amd Santander.


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## extranjero (Nov 16, 2012)

The "couple of things to mature in the coming years "will also have to be declared here, even if they are tax free in the UK, as will any lump sums,savings interest, ISAs, inheritances, premium bond or lottery winnings etc.


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## Williams2 (Sep 15, 2013)

extranjero said:


> The "couple of things to mature in the coming years "will also have to be declared here, even if they are tax free in the UK, as will any lump sums,savings interest, ISAs, inheritances, premium bond or lottery winnings etc.


Of course - the only 'grey area' in for instance, Stocks and Shares is whether
in Spain, you can offset your gains against your losses and therefore only declare
those profits that occurred above your original investment ?


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## rosseden (Jan 7, 2015)

Williams2 said:


> Yes well if CGT is an issue and there sojourn in Spain, is likely to be a short one.
> Then the other option is to hang onto their UK house ( perhaps only renting it out )
> and wait until they return to working or retiring in the UK for good. Then sell the
> house, once they are fully resident in the UK again, without any tax liabilities in Spain.
> ...


i think i need to cost up sorting the house out to rent it, i reckon it needs about 40k spending to get into a rentable condition, i guess they would recoup on sale, but its a big lump to find and spend now, especially as they cant take it from a pension to do the work without paying CGT on the draw down. 

Seems to me the most sensible thing to do is stay for 6 months and head back, not be tax resident and sort things out over here..... i thought we got screwed on tax in the Uk, maybe we dont have it so bad after all!!


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## rosseden (Jan 7, 2015)

Williams2 said:


> Of course - the only 'grey area' in for instance, Stocks and Shares is whether
> in Spain, you can offset your gains against your losses and therefore only declare
> those profits that occurred above your original investment ?


if for example, they sold their primary residence which has £120k of 'Gain' after buying price / mortgage is considered and bought another house in cash with the 'gain' are they still liable to CGT do you know?

Cheers for all your help on this!


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## extranjero (Nov 16, 2012)

I think they would have to use the entire proceeds to buy the house, not just the profit?


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## rosseden (Jan 7, 2015)

extranjero said:


> The "couple of things to mature in the coming years "will also have to be declared here, even if they are tax free in the UK, as will any lump sums,savings interest, ISAs, inheritances, premium bond or lottery winnings etc.


theres an endowment, and pension draw downs but they can all be deferred, so i guess only the total value of the 'pot' for wealth tax purposes is of any relevance. i dont see the issue with declaring everything when the allowance is 2m euros, but it does worry me there might be a cypriot style cash grab by the government and then anyone with any savings would be screwed.

it does seem rather like there is no attraction to investing in your future, whether it be in property or in other investments when you get taxed this much on 'gain' i guess being a Uk resident definitely does have its benefits!


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## Williams2 (Sep 15, 2013)

Williams2 said:


> Finally the Picos de Europa is the best local skiing
> area, up in the Cantabrian mountains, midway between Oviedo and Santander.


Forgot to mention 'Surfs Up in Asturias' today a bright and sunny day. As the
storms that battered Scotland and northern parts of the UK have produced
some great surf, all along the Cantabrian coast line today, including Asturias. So
a great area to ski in the morning and catch those waves in the afternoon.


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## extranjero (Nov 16, 2012)

How long can you defer them, or will you be returning to the UK after a period in Spain.
You wil have to pay cgt on the aforementioned. I thought the The wealth tax limit is 700,000 euros , and a separate issue from the cgt.


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## rosseden (Jan 7, 2015)

extranjero said:


> How long can you defer them, or will you be returning to the UK after a period in Spain.
> You wil have to pay cgt on the aforementioned. I thought the The wealth tax limit is 700,000 euros , and a separate issue from the cgt.


its actually my inlaws, they are 60 & 61, are planning to relocate from Gloucestershire to Derbyshire on retirement, they were offered roles in Spain for a few years between now and then, it seemed to make sense, from a lifestyle point of view, weather etc, they like to Ski and such like, to sell the house in the Uk, rent in Spain for the few years they want to work there, then when moving back to the Uk buy in the area they plan on living. I believe the new pension rules mean you can defer a tax free draw down on a pension for as long as you want to, and the endowment, we'd need to check, but i assume there wouldnt be an issue......

So in short, its going to be 4 years maximum i guess, likely a bit less, but it will be a fixed term, not for anything longer i dont think. The wealth tax aspect was the bit which first alerted me to his issue about declaring total wealth, which is well below the 700k per person that triggers wealth tax, but the CGT aspect is the more prominent aspect to it now. I dont see any way around it at the moment other than to leave their jobs in Spain just less than 6 months in and move back to the Uk, if the company want to hold their roles open, they could sell the house in 2015, that could be an option, but it will likely cost £30k to leave the house empty for a few years, spanish wages are poor anyway, it was a lifestyle choice so 30k isnt really sensible, and its not yet rentable, so unless theres some other process or system which negates the CGT, by selling theirs and buying some other investment property, or lumping all the money into anything which has tax relief (if there is such a thing in Spain?!) im not sure i can see a way through it..... which is a shame, cos weve spent the last few months sorting out their house and moving them!


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## Pesky Wesky (May 10, 2009)

rosseden said:


> its actually my inlaws, they are 60 & 61, are planning to relocate from Gloucestershire to Derbyshire on retirement, they were offered roles in Spain for a few years between now and then, it seemed to make sense, from a lifestyle point of view, weather etc, they like to Ski and such like, to sell the house in the Uk, rent in Spain for the few years they want to work there, then when moving back to the Uk buy in the area they plan on living. I believe the new pension rules mean you can defer a tax free draw down on a pension for as long as you want to, and the endowment, we'd need to check, but i assume there wouldnt be an issue......
> 
> So in short, its going to be 4 years maximum i guess, likely a bit less, but it will be a fixed term, not for anything longer i dont think. The wealth tax aspect was the bit which first alerted me to his issue about declaring total wealth, which is well below the 700k per person that triggers wealth tax, but the CGT aspect is the more prominent aspect to it now. I dont see any way around it at the moment other than to leave their jobs in Spain just less than 6 months in and move back to the Uk, if the company want to hold their roles open, they could sell the house in 2015, that could be an option, but it will likely cost £30k to leave the house empty for a few years, spanish wages are poor anyway, it was a lifestyle choice so 30k isnt really sensible, and its not yet rentable, so unless theres some other process or system which negates the CGT, by selling theirs and buying some other investment property, or lumping all the money into anything which has tax relief (if there is such a thing in Spain?!) im not sure i can see a way through it..... which is a shame, cos weve spent the last few months sorting out their house and moving them!


Personally I'd go directly to the tax office on this one and just as you don't speak enough Spanish you can't expect the Asturian tax authorities to speak English you'd have to get a financial translator involved


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## extranjero (Nov 16, 2012)

I think your in lnlaws need to see an accountant specialising in UK and Spanish tax.
They would need to declare all their assets outside Spain, once a resident, if they each have more than 50 k euros in each of the categories of savings, investments or property.if it's a joint account ,they would still have to declare it.
This is separate from the wealth tax
The endowment would be taxed in Spain on maturity, along with inheritances, winnings, lump sums etc.
If they sell their house and are then tax resident by spending more than 183 days in Spain, they would be liable for cgt on the profit., although that can be offset by investing in a Spanish property within 2 years, something they may not want to do. If only planning to spend 4 years in Spain.
A lot to think about!


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