Residency tax estimate. - Page 2

Hi Peter pan.. 

Many thanks for informative response and advice. Yes.. I definitely will be spending between 90 and 182 days here, and am going through the TIE process to ensure I my stay is legal...

I do plan to pay a tax accountfor to compete an informal tax assessment.. well before the 183 day deadline.. to help me decide if I will become a fiscal resident. 

As Kelvin90 pointed out, my 183 day deadline is early January 2021,..so my retrospective tax return for Jan to Dec 2021,  does not have to sunbitted until early 2022. My self assessment tax returns in UK are retrospective but cover financial year.. Whereas, here it is the Callander year. 

Thank you

As per PeterPan's comment ...

If you gain a TIE, and then spend >6 months outside of Spain, your TIE is invalidated.

After end 2020, there is no such thing as non-fiscal Residency. If you gain a TIE, you pay Tax in Spain.

If you leave Spain for >6 months, your TIE is invalidated.

So .... go into it with your eyes open.

Hi Kelvin1960

Many thanks for your informative response and advice.. 

Yes.. I am doing my best to obtain the relevant legal / financial / anecdotal information to carry out a basic cost / benefit analysis... 

Ultimately, as with most people, my final  decision will be driven by the costs... so the accountants assessment in the future is invaluable.. 

As per my first post, I calculate I would be paying approx €10k on my €37k  gross income ( minus €5k)..which is considerably more than I pay via UK tax system.😱

The accountant will conform or tell me otherwise.. 

Many thanks again for response.. 

Hi Knc60,

I've responded to your PM, but thought it worth adding on this thread that if your local government pension is classified as a Crown pension, you cannot take yourself out of the UK tax system, even if you become fiscally resident in Spain.  Your Crown pension has to be taxed in the UK (with the benefit of the UK's higher tax allowances) and tax paid there can be offset against any tax liability you have in Spain.

The one thing that none of us can be sure of is whether, post Brexit, there will be any bilateral agreements between the UK and Spain that change the tax landscape for Brits living here (like the one between Cameron and Rajoy in 2015, which allowed the Spanish tax authorities to include Crown pensions on the Modelo 720 Declaration of Assets, resulting in higher tax bands being applied to the remainder of income, even though the pension itself couldn't be taxed in Spain).  Perhaps an international tax specialist could advise whether there's anything on the horizon?

Of course, once UK citizens become Third Country Nationals from 1 January 2021, tha applicable basic rate of tax raises from 19% (for EU citizens) to 24%.

Kind regards, 

Kim

Hi.. 

Thought it might be useful to provide this forum with a quick update. 

I have just spent 1 hour with an accountant here in Benidorm.. Working through my financial details to assess how much tax I would pay in Spain v UK, should I become a permanent resident. 

The good news is that I would actually pay slightly less tax in Spain...My rental profit would be taxed here at 15%.. Whereas in the UK its 20%..

As such, I have decided to progress with my TIE application and will become a permanent resident 😎

Paying for said tax appraisal was money well spent and I can now begin to plan longer term...

I would recommend any other members in a similar situation to do the same.. 

Thank you for all of your comments and advice 👍

Welcome !