Does anyone have dual residency? (Spain & UK) - Page 2

Kimmy11 wrote on Sun Jan 3, 2021 10:14pm:

Hi Colin,

The difference in residency time frames detailed in the article Kelvin quoted is that 1 year + 2 x 2 year renewals refers to TCNs (Third Country Nationals, which UK citizens became on 1 January), as opposed to those of us who attained 5 years' temporary residency under the terms of the Brexit Wit...

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...hdrawal Agreement.

In order to determine whether you are fiscally resident in Spain or the UK, have you taken the residency tests in the Dual Taxation Agreement, e.g. Permanent home, Centre of vital interests and/or Habitual abode?

However, as Kelvin has already described, in order to retain your Spanish residency, you can't leave Spain for more than 6 months in each of the first 5 years of your (temporary) residency - the DTA between the UK and Spain ensures that you don't pay tax on the same income in both countries, although there are some administrative procedures to go through to put that in place.

The bottom line is that, in order to comply with the requirements to retain your Spanish residency, you will have to become fiscally resident here.

Kind regards, 

Kim

colin4457 wrote on Sun Jan 3, 2021 10:18pm:

Thanks George. The following quote is taken from the UK Government web site, "The UK has a double taxation agreement with Spain to make sure that you do not pay tax on the same income in both countries. You can ask the relevant tax authority about double taxation relief. Existing double taxation ...

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...arrangements for UK nationals living in Spain have not changed.". As I'm not working and won't start taking a pension until 2022, I have no meaningful income so tax is of little consequence at the moment.

My main concern is not to be constrained by the 183 day rule if I can help it.

Cheers,

Colin

George55 wrote on Sun Jan 3, 2021 10:34pm:

 Understood, and that should make your tax situation easier to manage.

However, it is worth noting that the UK tax regime and the Spanish tax regime do have a number of differences (such as wealth tax in ES) and you may wish to plan around that when the time comes.

colin4457 wrote on Sun Jan 3, 2021 3:35pm:

Having just completed our residencia application, which was successful, we are now awaiting an appointment to collect our TIE cards.

Although this might seem like poor timing on our part, I'm now aware that it seems to be possible to have dual residency. Has anyone on the forum looked into this and then taken it forward?...

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...

Our primary objective in getting Spanish residencia was to allow us to move freely between our Spanish & UK homes. However, whilst we have an ageing parent, we would not move permanently to Spain but would plan to spend fairly equal amounts of time in each country - which seems to equate to dual residency.

I find it difficult to find definitive information on the obligations of Spanish or UK residency. Must you spend at least 183 days/year in one of the countries? It would be much easier if one could hold dual residency.

Any thoughts or practical information would be much appreciated!

Colin

Peter R wrote on Sun Jan 10, 2021 5:32pm:

I have enquired ,via my spanish solicitor , about dual nationality and was advised that U.K./ Spanish was not possible . This was early 2020 but do not think the situation has changed . It is the Spanish side that does not allow for some reason

You could always double check with the Spanish Embassy in your present location ....

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...

If it has changed I would go for it if it does not effect my tax location .

Cheers

Peter 

colin4457 wrote on Sun Jan 10, 2021 11:13pm:

Good suggestion Peter. I have had a response from my solicitor in Spain who only advised on tax residency - and we are due to speak with a Spanish based tax advisor this coming week. I have no problem paying tax once wherever I need to - what I don't want is to lose our right to reside in Spain d...

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...ue to missing a 183 day limit.

Cheers,

Colin

George55 wrote on Wed Jan 13, 2021 6:56pm:

Just one observation - it is possible to hit the criteria regarding tax residency of two different countries albeit in most "standard" cases it would be highly unlikely to occur:

Specifically:

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The Spanish tax residence rules

You are resident for tax purposes in Spain if any of the following apply:

1) You spend more than 183 days in Spain cumulatively in a calendar year, whether or not you are formally registered. Temporary or sporadic absences are ignored for the purpose of this rule unless you can prove you are habitually resident in another country for over 183 days.

2) Your “centre of economic interests” is in Spain– i.e. the base for your economic or professional activities is in Spain. If you earn more income or have more assets here than in any other single country, Spain will be deemed the centre of economic activity,

3) Your “centre of vital interests” is in Spain – i.e. your spouse lives here and/or your dependent minor children. In this case you are presumed Spanish resident, even if you spend less than 183 days here, unless you can prove otherwise.

There is no split-year treatment in Spain; you are either resident or non-resident for the whole fiscal year.

It can be possible to fulfil the domestic tax residency rules of two different countries (i.e. Spain and UK). In that case, the double taxation agreement will set out a list of ‘tie-breaker’ rules to establish in which country the individual should be paying taxes, as it cannot be both. These look at criteria like the location of the permanent home, centre of vital interests and habitual abode. If these do not determine residence it comes down to nationality (or mutual agreement if a national of neither country).

See:

Understanding tax residence in Spain | Blevins Franks Advisers

colin4457 wrote on Sun Jan 3, 2021 6:52pm:

Thanks for your feedback.

I appreciate that residency is primarily about taxes & benefits but the UK Government clearly cater for dual residency (https://www.go...

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...v.uk/government/publications/dual-residents-hs302-self-assessment-helpsheet/hs302-dual-residents-2020). I don't have a problem paying tax in either country - I just don't want to pay it twice!

I can't find any official Spanish documentation which states I will lose my residencia if I happen not to have been in the country for less than 183 days. I did find reference to tax and 183 days on a Spanish lawyers site though (https://tejadasolicitors.com/english-lawyers-malaga/spanish-residency/#:~:text=Having%20a%20Spanish%20residency%20permit,the%20Tax%20office%20in%20Spain.). The key sentence being "In general terms, the article 9 of the IRPF Law defines, among other requirements, that tax residents in Spain will be those who stay for over 183 days a year in the national territory or whose main nucleus or base for financial activities or interests is in Spain."

If you can aim me at something which formally confirms the absolute obligation for me to be in Spain for at least 183 days or lose my residencia I would be really grateful!

Thanks again,

Colin

Sarahholland wrote on Thu Mar 11, 2021 3:27pm:

I know you don’t have a problem with income tax, I didn’t either but beware Re capital gains and inheritance tax, also be aware of not being able to will your assets to whom you want. They are other far reaching implications of being a Spanish resident other than just simple income tax. I am ...

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...under the impression that there can’t be a half way scenario, either you’re fully in Spanish system or your not, we too don’t feel we can commit to Spain as my husband has an elderly mother but also the capital gains and inheritance taxes would be astronomical 😞