Form SE1 Residencia - Page 2

Jim, my reference to not declaring salary income for the application for residencia was due to declaring the income to live on in the future which a salary earned while living in the UK could not be earned if residing in Spain. Surely I am correct in this? I didnt mean not declaring it for any other purpose,tax etc. I have been informed from many sources and reading postings on this forum that a property sold (including main residence in UK) would be subject to CGT in Spain for that tax year if immediately after sale residing to Spain. There have been other postings advising sell in year before to avoid CGT. Am I wrong in this fact? 

Pauline.

Pauline, I've come across a number of people with salaries earned in the UK, and that income is taxed here. For example, a friend of mine used to go back and drive HGVs, and another friend goes back and spends weeks as a home help.

The dual taxation treaty hasn't changed, and capital gains tax, as I said, is only chargeable in the country in which the property is situated. 

Ray, I would never advise or recommend anyone to do anything illegal, including acting illegal myself. I wanted to avoid the 90day stay in 180days having spent 12years working towards longer stays on retirement so researched what I could regarding residencia. What I discovered forced me to accept residencia should only be applied for when planning to reside permanently in Spain. Denise(op) stated applying now for residencia but not planning to moving over until next year, 2020 ,as you have stated previously, cant be a resident in 2 countries at same time. Therefore are you now recommending she apply for residency but not residing in Spain for another year? You've stated "go ahead with residencia then move over" but she doesnt want to move for another year? I still find a lot of confusing answers to posts . I have read posts that state a person needs to change driving licence within 90days of residence yet others state a person has upto 2 years to change their driving licence. ???  Confusing!

I would love to apply now for residencia to enable longer stays but dont want to stay past 180 days and still keep my UK residence as my main residence. Are you saying that is possible or not?

Pauline

Jim, of course you,re correct, many residents earn income out of Spain but Denise stated in one of her replies, she would not have her salary if living in Spain. I am now going to research postings which stated we could be liable in Spain for CGT. Also I spoke to Abacco who said same thing.

Ref the discussion between Kim and Ray about property income, I'll hazard a guess. 

I'd say that you, Ray, have opted out of the Inland Revenue system, and therefore definitely don't need to submit tax returns to HMRC for income which is taxable in Spain.

I'd further guess that Kim hasn't been here long enough to have submitted a resident tax return here, and therefore hasn't yet been able to get out of the Inland Revenue system.

I won't be surprised if either or both of you say I'm wrong!

I will hazard a guess and say I think Jim might be right.

I know Kim's done everything she needs to. However, until the first tax return has been done here, AEAT won't issue a certificate of fiscal residency, and it's not possible to get out of the Inland Revenue system without that. In such cases, tax paid in the UK can be offset against tax due in Spain.

There is a potential trap that people can fall into. Pay tax here, after claiming the offset of tax paid in the UK. Then you get out of the Inland Revenue system, and they give you a refund of tax paid. You then need to file a supplementary tax return here to pay tax on the income you inadvertently claimed relief on. It does happen, as a friend of mine knows to his cost. Three years down the line he got a demand from AEAT for the tax he should have paid on a supplementary return, plus interest, plus a fine.

Interesting and very helpful as I will be completing my first Spanish Tax Return soon and will certainly remember your advice on the possible need for a Supplementary Return.

 Hello Pauline what an interesting read thank you for replying. I have been thinking is it really worth it. We are unlikely to spend more than 183 days but wanted the option. We will always keep a home here and we have a small flat which gives us the rental income. No private pension just husbands state pension and jSome money from the sale of our house originally.There have been so many conflicting opinions on what to do and what we need and yes I’m convinced our solicitor is to put it mildly pretty useless.  I was getting to the stage where I couldn’t see much in the way advantages either only the long-term stay option so you reply as encourage me to think twice. If I understand correctly are you saying  that should we stay over 183 days that affects our rights to our doctors services here in England. For us this would have to be the deciding factor.  Thanks Denise 

Apology accepted Ray, thought you must have missed that fact. My reference to the 180 days was the possible visa use? after Brexit of visiting and staying in Spain for more than 90days in each 180days which would require a further 90days away before returning, nothing to do with residency. Our choice of staying resident in Uk has nothing to do with tax avoidance but as over 65,s we need plenty of time to sort out 40yrs belongings and transport to Spain, refurbish our large UK home, and wait for it to sell, while enjoying a long stay holiday to refresh us during the spring to autumn months. Once permanent (if possible, given extra requirements after brexit) I,m happy to pay all taxes responsibly.

Pauline.