My name's Alex and this is my website all about Playa Flamenca in Spain. Register now for free to talk about Taxes in Playa Flamenca: Suma, NIE and general tax advice and much more!
Help please just purchased a property and the lawyer just dropped a bombshell about paying 25% tax on my income Is this my UK earnings that I pay tax to the UK goverment All help appreciated
Posted: Fri Dec 4, 2020 7:15pm
Helpful member
Probably need a bit more info but as a matter of basic principal if you Live in Spain you pay your tax in Spain and you should be able to have your UK salary paid gross less NI contributions.
If not then you will still have to declare your gross income which will be used when calculating your tax liability in Spain.
From that non reclaimable tax paid in UK will normally be offset so you don't pay tax twice. Those are rules embedded in the dual tax treaty between UK and Spain which is unaffected by Brexit.
Because the tax thresholds and bands, are generally lower in Spain than UK that can result in a bigger tax bill.
BTW tax calculations in Spain are multifaceted and not as simple as in UK where they are based on a well defined personal allowance and then tax based on the remainder rising in set bands o it's a bit disingenuous to say that tax in Spain is 25%.
Posted: Fri Dec 4, 2020 7:20pm
Legendary helpful member
Are you permanently resident in Spain or have you applied for Residencia (TIE)?
If you don't intend to be a permanent resident you will only pay non residents taxes and won't be in the main Spanish tax system for your income in the UK. Perhaps someone else can advise what to expect in terms of non residential tax?
Once you have become a resident of Spain after 90 days in the country, after a total of 182 days in the country you become a fiscal resident and need to file a tax return. Once you have done so you can apply to come out of HMRC. To do this you fill in a a double taxation form, and once you get your certificate from the Spanish taxman you send it along with the form to HMRC.
Steve
Posted: Fri Dec 4, 2020 7:38pm
Super helpful member
dinnerout wrote on Fri Dec 4, 2020 7:20pm:
Are you permanently resident in Spain or have you applied for Residencia (TIE)?
If you don't intend to be a permanent resident you will only pay non residents taxes and won't be in the main Spanish tax system for your income in the UK. Perhaps someone else can advise what to expect in terms of non residential tax?...
Read more...
...
Once you have become a resident of Spain after 90 days in the country, after a total of 182 days in the country you become a fiscal resident and need to file a tax return. Once you have done so you can apply to come out of HMRC. To do this you fill in a a double taxation form, and once you get your certificate from the Spanish taxman you send it along with the form to HMRC.
Steve
Dinnerout is correct.
But it takes a while. We gained Residency (TIE nowadays) in August 2018. We paid income tax in Spain for year Jan-Dec 2019 in two chunks ... June and November 2020.
We have applied to receive our UK tax for the same period refunded, but we have not received it yet. It would be easy to blame Covid, but our wait is not unusual.
So .... 4 points
- tax in Spain is higher than in the UK if you have a comfortable income
- the Spanish tax year is Jan 1 to Dec 31
- there is a financial pinch-point to plan for, when you are paying tax to both countries (the UK owes us nearly 2 years' tax)
- it can take >2 years to resolve
One possibility is that there might be a miscommunication - maybe they were referring to rental income, which I think for non residents is 24%.
Advertisement - posts continue below
Posted: Fri Dec 4, 2020 7:48pm
Helpful member
It's likely you'll have to wait until the end of the UK tax year and then some for HMRC to get around to your case and make a payment which BTW will come in the form of an HMRC cheque in the post so you'd better hope that you're not one of those facing having their UK bank accounts closed!
Posted: Fri Dec 4, 2020 7:56pm
CharlieFarmer wrote on Fri Dec 4, 2020 7:15pm:
Probably need a bit more info but as a matter of basic principal if you Live in Spain you pay your tax in Spain and you should be able to have your UK salary paid gross less NI contributions.
If not then you will still have to declare your gross income which will be used when calculating your tax liability in Spain. ...
Read more...
...
From that non reclaimable tax paid in UK will normally be offset so you don't pay tax twice. Those are rules embedded in the dual tax treaty between UK and Spain which is unaffected by Brexit.
Because the tax thresholds and bands, are generally lower in Spain than UK that can result in a bigger tax bill.
BTW tax calculations in Spain are multifaceted and not as simple as in UK where they are based on a well defined personal allowance and then tax based on the remainder rising in set bands o it's a bit disingenuous to say that tax in Spain is 25%.
Thank you for your reply very helpful
Posted: Fri Dec 4, 2020 8:00pm
dinnerout wrote on Fri Dec 4, 2020 7:20pm:
Are you permanently resident in Spain or have you applied for Residencia (TIE)?
If you don't intend to be a permanent resident you will only pay non residents taxes and won't be in the main Spanish tax system for your income in the UK. Perhaps someone else can advise what to expect in terms of non residential tax?...
Read more...
...
Once you have become a resident of Spain after 90 days in the country, after a total of 182 days in the country you become a fiscal resident and need to file a tax return. Once you have done so you can apply to come out of HMRC. To do this you fill in a a double taxation form, and once you get your certificate from the Spanish taxman you send it along with the form to HMRC.
Steve
Thank you for your reply very helpful I will not be a resident as I am still working in the UK I will just be using my property as a holiday home until I retire then try for residency which is about 3 years time I just don't understand this
Posted: Fri Dec 4, 2020 8:10pm
Legendary helpful member
Mcvmm21 wrote on Fri Dec 4, 2020 8:00pm:
Thank you for your reply very helpful I will not be a resident as I am still working in the UK I will just be using my property as a holiday home until I retire then try for residency which is about 3 years time I just don't understand this
Thanks for the clarification. I think the comment from your solicitor was either ill advised or inaccurate, or lost in translation somehow.
What you need now is some advice about the non resident tax which applies to holiday home owners. I'm not able to advise on how that's calculated but I'm sure someone will come along and do so.
Steve
Posted: Fri Dec 4, 2020 8:12pm
Kelvin1960 wrote on Fri Dec 4, 2020 7:38pm:
Dinnerout is correct.
But it takes a while. We gained Residency (TIE nowadays) in August 2018. We paid income tax in Spain for year Jan-Dec 2019 in two chunks ... June and November 2020.
Read more...
We have applied to receive our UK tax for the same period refunded, but we have not received it yet. It would be easy to blame Covid, but our wait is not unusual.
So .... 4 points
- tax in Spain is higher than in the UK if you have a comfortable income
- the Spanish tax year is Jan 1 to Dec 31
- there is a financial pinch-point to plan for, when you are paying tax to both countries (the UK owes us nearly 2 years' tax)
- it can take >2 years to resolve
Thank you for your reply very helpful
Popular topics
Properties near Playa Flamenca
Latest Taxes topics
Our sponsors
Register for free!
Login to your account
Popular posts in Playa Flamenca
