Residency

Owning a property and having an NIE does not make you a resident of Spain. You are still in effect a tourist when visiting Spain. Whoever told you it makes you a resident is wrong.

I believe that you now have to apply for residency while you are in the UK. Its best to seek advice from your solicitor or Gestor. 

Steve 

Thank you, we thought he was wrong in what he told us. Ive been i touch we our solicitor so hopefully she will be able to help us. Thanks again

Thank you i will certainly contact her

If you do eventually gain a TIE there are certain commitments that need to be fulfilled throughout the year to be able to keep it. It is primarily a card to prove you are a resident of Spain and not a card that will help you to have extended holidays! so you will have to live as a full time resident as a long term commitment and you will have to pay taxes to the Spanish government and quite probably be asked to submit the Modelo 720 whereas you will have to divulge your annual income from all sources, anywhere in the world , all monies you have in all bank accounts along with ownership of property etc, etc.

Steve 

Really because we pay non residence tax in spain because we own a property  there but we're non residance. 

Just to be clear on this - as I understand it, if you rent a UK property out and receive income from that, then you are taxed on that income.

There is only non-resident tax to pay in respect of a UK property (or 2nd property anywhere in the world) if you keep that 2nd home vacant or it happens to be empty in a void between tenancies.

The problem here is that the Spanish tax man will and does assume that if you have property in the UK and your primary home is in Spain you will be gaining rent from the UK house and tax you on the assumed income.

You will be required by law to list all worldwide assets, bank accounts and annual income on the modelo 720.

Steve 

Yes but you will be a resident if you gain a TIE. 

Steve 

Yes - I agree and I think we're saying the same thing. In effect:

If you were to have opted out of the UK tax system, then you would pay tax on the rental income received from the UK property on your Spanish tax return.

or

If you were to have opted out of the UK tax system and had no rental income as you did not let the UK property out, then you would have to determine the "imputed" tax due and pay that on your Spanish tax return.

(If you've not opted out then you'd end up having to continue liaising with HMRC and also declaring that in Spain under DTR so additional complexity/work)