Clarification needed on Tax

Posted: Sun May 16, 2021 5:51pm

3 replies203 views3 members subscribed

weewuman

Posts: 8

1 helpful points

Location: Pego

Joined: 10 Apr 2021

Hi there,

I purchased a property in Spain a couple of years ago and hopefully I will be able to come over this year and use it. The intention was that I would initially spend about six months in Spain and six months in UK and hopefully move permanently to Spain in a year or two.

The 90 days in 180 day rule isn't ideal for myself (or a great deal of other people). So this mean that if I wanted to stay longer than 90 days within a 180 day period, I would need to gain a non-lucrative visa. I'm a teacher and want to come over to Spain whenever I have holidays, however they don't fit in with the rules. I meet all of the financial requirements and I am happy to arrange private health cover.

Can someone please clarify if the double taxation agreement between Spain and the UK still applies. If I continue to work in the UK and pay tax in the UK can this be offset against the amount of tax due in Spain on the same amount, as my understanding is that once you gain Spanish residency you are taxed on your worldwide income.

Some clarification would be greatly appreciated. Many thanks.

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Posted: Sun May 16, 2021 8:44pm

Kimmy11

Legendary helpful member

Posts: 6870

12563 helpful points

Location: Formentera Del Segura

Joined: 8 Aug 2017

Posted: Sun May 16, 2021 8:44pm

Hi weewuman,

Yes, the Dual Taxation Agreement does still exist between the UK and Spain.

You're not the first person to hope that the NLV gets around the Schengen "90 days in 180 rolling days" rule, but I'm afraid it doesn't. When you become resident in Spain, you cannot leave for 183 days (6 months and 1 day) or more without voiding your residency (in each of the first 5 years), and when you spend 183 days or more in Spain, you become tax resident here. If your work commitments allow you to spend more time in Spain than the UK, you could comply with the NLV and the subsequent 2 yearly permits, but you would have to declare your worldwide assets and income derived from them in Spain, and pay the tax due in Spain.

Kind regards,

Kim