When to apply for residency

Thankyou. A very comprehensive and helpful reply. We will investigate further about the tax implications. 

Jane x

Do you have any information on medical insurance companies? Would they need to be Spanish?

How sure are you with the €900 per month?

I thought there was something to do with the amount of savings you had as well?

Prior to this month, it was either regular income or a capital balance.

Whether that either/or choice is still applicable, we don't know as nobody has posted feedback from applications. 

The crux is that you can prove sufficient finances to sustain you, so it would be sensible that either/or still applies.

The value of a capital asset is, in law, acceptable as proving sufficiency of finances. The big problem is that the police don't seem to accept that, and only accept money that is readily available.

In your own best interests, even if you're not living here at present, I suggest you apply for residency before the end of the year. That will presumably mean you taking out private health insurance before you actually move, but that might be better than not being able to move at all because you can't meet the financial requirements for a long-term visa after the end of the year.

Thanks again Jim.

I'm trying to get out as soon as possible as I want to apply for my residency before this year is out. I feel like I'm rushing but its got to be done. I'm going to use somebody to get this sorted and do the legwork while I'm toing and froing.

I seem to remember some recommendations on here for someone who does it so I will have another search.

The time is right!

Thanks.....I will have a look.

You need Spanish tax advice.

If you gain Spanish Residency between now and June 2021, you will be liable for income tax in Spain for Jan-Dec 2021 (more on that later).

As you plan to retire in March 2021 ... 2 things

(1) Your income for Jan-Dec 2021 will include 3 months of salary (not just pension). Assuming that you are NOT a UK Government employee, and are tax-liable in Spain, you will pay substantially more tax in Spain for Jan-Dec 21 than in the UK.

(2) If your retirement comes with a golden goodbye of some sort - e.g. a tax free lump sum from your pension - that lump sum MAY NOT be tax free in Spain.

You will not reconcile your taxes until 2022. You will submit Modelo 720 to declare your worldwide assets in Feb 2022. You will submit a tax return (for all sources of income) for Jan-Dec 2021 in June 2022. You will pay around 2/3 of your taxes at end June, with the 1/3 balance in November.

BUT, you will continue paying UK tax PAYE until after this. You claim back your UK tax AFTER you have paid your tax in Spain. 

There is a significant cash flow issue to be managed.

You need to fully understand this to avoid a nasty surprise in June 2022. 

If, at some point, you decide to sell your UK house, there may be Capital Gains Tax implications.

All good reasons to get tax advice.

Thankyou for this advice. A lot of what you have said applies to us. I wonder if we should leave applying for residency for a year, as we will both be getting lump sums from NHS pensions in March, and working til then, and then, possibly renting out our home in the UK. 

Indeed we will seek tax advice! 

Thanks