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Tax liability question

Posted: Mon Mar 13, 2023 10:48am
6 replies132 views2 members subscribed
Rustyruss67

Rustyruss67

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My wife and I have just got our golden visa , we are moving over this year but are spending less than 183 days so not tax resident this year. next year my wife is due to release the last of her shares , now she has already paid the tax on these , but she is saying that she can’t spend more than 183 days as you can be tax resident in two countries at the same time. My point to her is that as she has already paid the tax it wouldn’t make any difference but she said that as the shares won’t release until the end of the uk tax year ( end  of march ) and the tax tear in Spain is Jan-dec  this wont be allowed. 
very complicated who someone csn help 

Herefordjack

Posted: Mon Mar 13, 2023 3:37pm

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Posted: Mon Mar 13, 2023 3:37pm

Your post is a little confusing. Are we talking about share options here? Are you concerned about liability to CGT if the options are exercised and then the shares sold? Please elaborate.

Rustyruss67

Posted: Mon Mar 13, 2023 6:05pm

Rustyruss67

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Posted: Mon Mar 13, 2023 6:05pm

Herefordjack wrote on Mon Mar 13, 2023 3:37pm:

Your post is a little confusing. Are we talking about share options here? Are you concerned about liability to CGT if the options are exercised and then the shares sold? Please elaborate.

Hi, thdnks for your reply , yes it’s a bit complicated, yes she has share options which she pays tax on when exercised, these will be cashed in march 2024 and as She will have stopped working in march 2023 I’m pretty sure there won’t be any tax liability’s in Spain and so having to stay a maximum of 183 days won’t be an issue , but she thinks as it falls in the Spanish tax year and it’s classed as unearned income there might be a tax implication, our uk accountant doesn’t really know as he only deals in uk tax. 

Herefordjack

Posted: Mon Mar 13, 2023 7:14pm

Herefordjack

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Posted: Mon Mar 13, 2023 7:14pm

Rustyruss67 wrote on Mon Mar 13, 2023 6:05pm:

Hi, thdnks for your reply , yes it’s a bit complicated, yes she has share options which she pays tax on when exercised, these will be cashed in march 2024 and as She will have stopped working in march 2023 I’m pretty sure there won’t be any tax liability’s in Spain and so having to stay a...

... maximum of 183 days won’t be an issue , but she thinks as it falls in the Spanish tax year and it’s classed as unearned income there might be a tax implication, our uk accountant doesn’t really know as he only deals in uk tax. 

In my opinion, for what it's worth, this will be classed as a capital gain in 2024 and will have to be declared as such on your wife's tax return for 2024 (which will be submitted between April and June 2025). Earned or unearned income is not relevant, ALL income from whatever international source has to be declared on your income tax return. 

I don't know your wife's financial circumstances, she might not even reach the tax payment threshold if she's not working. Also, if you've paid tax on this gain already in the UK, there will be a place to record this on the return and it will be offset against Spanish tax. But don't make the mistake of not submitting a return, all tax residents have to do so in the first year to get registered on the system 

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Rustyruss67

Posted: Tue Mar 14, 2023 6:52pm

Rustyruss67

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Posted: Tue Mar 14, 2023 6:52pm

Herefordjack wrote on Mon Mar 13, 2023 7:14pm:

In my opinion, for what it's worth, this will be classed as a capital gain in 2024 and will have to be declared as such on your wife's tax return for 2024 (which will be submitted between April and June 2025). Earned or unearned income is not relevant, ALL income from whatever international sourc...

...e has to be declared on your income tax return. 

I don't know your wife's financial circumstances, she might not even reach the tax payment threshold if she's not working. Also, if you've paid tax on this gain already in the UK, there will be a place to record this on the return and it will be offset against Spanish tax. But don't make the mistake of not submitting a return, all tax residents have to do so in the first year to get registered on the system 

That makes sense , thdnks so much for replying we will look into it a bit more , but Spanish tax is certainly a minef

John123456

Posted: Tue Mar 14, 2023 7:18pm

John123456

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Posted: Tue Mar 14, 2023 7:18pm

You might be interested in the following links  about the double taxation agreement between Spain and the UK:

https://www.boe.es/buscar/act.php?id=BOE-A-2014-5171

https://www.boe.es/buscar/doc.php?id=BOE-A-1976-23347

jack1959

Posted: Wed Mar 15, 2023 1:54pm

jack1959

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Posted: Wed Mar 15, 2023 1:54pm

seek professionals EXPAY

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