amideislas

Fine, but it's doubtful any Brit with long-term residency will be "kicked out". Key term: "long-term residency". Fred suggests the 5 year trigger. That might be it.

Brexit isn't likely to be concluded in the next 5 years, so if you're going to move, best to do it NOW. Or find some way to get citizenship in an EU member state.

FranE

What the OP seems to be asking is - is it possible to be officially resident so as to lead to permanent residency, without at the same time being tax resident, ie paying Spanish taxes including income tax. Perhaps OP will correct me if I'm wrong. But if that's right, I'd be interested to know that too.

bobd22

Yes that is what I am hoping but not sure

bobd22

Thinking about isn't that much the same as in the UK's proposal re this so called settled status? If people were legally in UK they were going to allow them to stay to meet the time limit so long as EU acted reciprocaly? To be honest it is an absolute ridiculous state of affairs for us that have bought legally planning to move full time but for various reasons are unable to pre Brexit.

Fred James

That is going to be very difficult because if you want permanent right of residence, you must have lived in Spain permanently for 5 years. In this context, permanently means for at least 6 months in the year. At the same time, to avoid tax residency you must spend less than 6 months in Spain.

You could find it very difficult to comply with both criteria.

Assuming you do get round it it will be even more difficult to retain permanent residency as you can only spend a maximum of 2 years out of Spain.

Also, the 183 day rule is not the only criteria. If it is decided that your center of economic and personal interests is in Spain rather than elsewhere, then you can be deemed tax resident even though you do not spend 6 months in Spain. It really depends on what you are doing during the other 6 months. Living is a home in the UK would be considered differently to going off on holiday for the other 6 months without any permanent base in the UK.

bobd22

To be honest I don't think that would be too difficult for me to comply with. My only income for the time before I would move full time to Spain 18 months would be crown pensions so taxed UK anyway. Once I moved full time on reaching state pension age I would of course become tax resident as would then have state pension. That is why I wish to make myself resident but not my wife, a. Cost of two lots of private health cover and b. She still works so tax situation could be an issue / worry. Only issues really I have is obviously the S1 issue that no one knows answer to re will we that aren't using it pre Brexit get it and will my wife be able to get residency to join me after Brexit. It really is very worrying as I could spend money on this plan health care etc and still be s scuppered as there just are not answers to these important issues.

bobd22

Also if I take residency next visit Oct. Totting up days in Spain to 31 Dec I would not be liable for tax this year anyway. I suppose I could make myself tax resident next year i.e. submit tax form but would no doubt pay nothing or very little tax on crown pension. It's a quandary what to do for the best without making life too difficult and wasting more money.

Fred James

If you did that your first declaration would not be due until June 2019.

bobd22

Thanks Fred that would be after Brexit if as planned but that is earliest anyway so seems like the best or only option.

bobd22

Just one query Fred declaration would be June 2019 but would show me as fiscal resident from Jan 2018? At what point would I need to inform DWP?

CHRISJK

Yes that's exactly what we are hoping to do. We cant spend any more than 3 or 4 months in Spain per year at the moment, but in around three years time we would like to become "permanent" Residents. We were thinking that if we Rented a villa in the meantime and spent more than 90 Days a year there, we would be looked on favorably when Brexit arrives ( Regarding free Healthcare etc ).

lurchio

Bob, Not trying to make things worse, but like me you would have a Govt Pension. I had to submit a Double taxation treaty form to both the UK and Madrid to 'set up' the left hand knowing what the right was doing during the previous year to my first declaration in the June, althought that declaration covered the same 'previous year' if you get my drift. The paperwork ensures that although you have to DECLARE the Gov Pension to Spain, it is TAXED in the UK, and you will be given a UK tax allowance against it. (Which works out better actually!) This is necessary because although not taxed in Spain, the Gov Pension burns into your SPANISH tax allowance when you declare any other income that IS taxable in Spain, like the old age pension. Swings and roundabouts, but the paperwork has to go in and get cleared well before the Spanish tax return goes in the following June. If you can be resident, but not tax resident until all the ducks are lined up, you can avoid all that.
Once you start the DTT process for the Gov pension, at the end you will be given a Certificate of Spanish tax residency, which again may not suit.
Bloody awkward, eh?

bobd22

Thanks for that info Lurchio I had a feeling something like that would be the case. I am not too worried if that is what I have to do to show I have been resident pre Brexit. As I would be paying for private health cover them on one hand worst I would lose is NHS in UK and use the private one in Spain. I could live there and come back for long holidays I suppose. Of course I would be happier getting residency but staying non tax resident. Problem is if that gets queried as Fred says you have to be in Spain at least 6 months per year, I do nearly that now. I am presuming thought that they say at least 6 months meaning dropping into the 183 day tax residency rule? I wonder if having the over 3 month residency + signing on the Paxton may work? Given it will be under 15 months till I make the full time move. It is very complicated and difficult to formulate the best plan, of course it may all be for nothing if they pull the S1 for likes of me and you. The permetations that go through my head seem endless. It seems that those currently resident and using the S1 are ok but those like yourself may not end up with free health care at state retirement age which dependent on finances may or may not be an issue, then there are those like myself bought property planning the move post Brexit who are nowhere on either UK government or EU's negotiating radar.

lurchio

I know, its a total bummer. I should have added that the DTT forms ask how long you have spent in Spain for the previous two years (I think) and how long for the projected next year. Anything over 183 will generate the fiscal residency cert. Have a look at them online.Quite how all this is checked, I don't know, but I kept all my flight bookings etc in readiness. Interestingly, they DID ask for my Endesa bills for the previous 2 years. I used a Gestor recommended by ex colleagues by the way.

bobd22

Thanks again good information very useful. No issue re previous years or electricity bills as you can see clearly from my Endesa bills on the graph part when I have and haven't been in Spain which has always been under 183 days. Mind I go back and forth so frequent now that I can never really remember my actual dates. But will be able to go back through flight and ferry bookings.