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Old Aug 8th 2017, 10:46 am   #1
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Default Newbie - Tax and things

Hi all,

completely new on this forum so apologies in advance if you have seen this type of post before.

Hoping to move to Spain/Tenerife in around 2 years time, Brexit allowing, and was rather concerned about tax.

I'd like to keep my house in the UK so as I don't burn my bridges if things don't work out.

Do I have to pay a tax on my UK house and also on any savings I may have to the Spanish Govt if I become a permanent resident?
How much is it roughly?

If I stay for less than 183 days what tax liabilities do I pay in Spain and when?

Thanks in advance.
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Old Aug 8th 2017, 12:29 pm   #2
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Default Re: Newbie - Tax and things

Hi and a warm welcome to the Spanish forum on BE. Myself and Fred James are the moderators for the Spanish forums whilst BEVS moderates Europe. Moderators are there to ensure that the site runs smoothly within the rules of BE. This is so that members gain the information that they are looking for and find their experiences on the forums to be friendly and worthwhile.

Problems and complaints should always be addressed to a moderator who will look into the matter and deal with it efficiently and fairly. Our members who post in the Spain Forums are usually friendly and helpful with a wealth of knowledge about the issues of living in Spain. I hope that you enjoy your time participating in the forums.

Please let me know if you need any further help.

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Old Aug 8th 2017, 6:31 pm   #3
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Default Re: Newbie - Tax and things

Quote:
Originally Posted by hg3 View Post
Hi all,

completely new on this forum so apologies in advance if you have seen this type of post before.

Hoping to move to Spain/Tenerife in around 2 years time, Brexit allowing, and was rather concerned about tax.

I'd like to keep my house in the UK so as I don't burn my bridges if things don't work out.

Do I have to pay a tax on my UK house and also on any savings I may have to the Spanish Govt if I become a permanent resident?
How much is it roughly?

If I stay for less than 183 days what tax liabilities do I pay in Spain and when?

Thanks in advance.
The Spanish tax man will automatically assume you are renting your house out even if it's locked up and mothballed. You will pay tax on the rental income the tax man thinks you might be getting.

You don't pay tax on savings although you will have to declare the value of your house and worldwide income and savings on the Modelo 720.

You will need to fill in and submit the Double taxation form to HMRC to pay taxes in Spain if you become permanent residents.
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Old Aug 8th 2017, 6:44 pm   #4
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Default Re: Newbie - Tax and things

Very many thanks Tebo53. Appreciate your time and reply.
That makes more sense.

Nothing is simple, just have to do the figures and see if it is doable.

The tax allowances and having to pay tax on my Civil Service Pension doesn't sit well but these are the things you have to weigh up.

Btw, I had the heating on today!!
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Old Aug 8th 2017, 6:46 pm   #5
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Default Re: Newbie - Tax and things

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Originally Posted by hg3 View Post
Very many thanks Tebo53. Appreciate your time and reply.
That makes more sense.

Nothing is simple, just have to do the figures and see if it is doable.

The tax allowances and having to pay tax on my Civil Service Pension doesn't sit well but these are the things you have to weigh up.

Btw, I had the heating on today!!
No probs. Ah...its 30c and I'm just off out to have a beer
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Old Aug 8th 2017, 6:54 pm   #6
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Default Re: Newbie - Tax and things

Quote:
Originally Posted by hg3 View Post
Very many thanks Tebo53. Appreciate your time and reply.
That makes more sense.

Nothing is simple, just have to do the figures and see if it is doable.

The tax allowances and having to pay tax on my Civil Service Pension doesn't sit well but these are the things you have to weigh up.

Btw, I had the heating on today!!
Usually, the Civil Service Pension will stay taxed in the UK, with a UK allowance on it, even if you are Spanish tax resident. You will have to declare it to Spain as it is a factor as regards any Spanish tax allowance, but its taxed in the UK,and nothing will change from how it runs now, as regards income from it. Have a trawl around the forum using the search facility, you can't break anything!
It just got cool enough at 32 degrees,so off out to walk the dogs, THEN having a beer. Its hell here.....

Last edited by lurchio; Aug 8th 2017 at 6:57 pm.
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Old Aug 8th 2017, 6:57 pm   #7
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Default Re: Newbie - Tax and things

You don't pay spanish tax on a UK government pension. Its an eu agreement. Civil service pensions are paid by the uk gov and are not taxed (again) in spain. All other income, including the rental of your uk home, interest in uk accounts and ISAs will be taxed if you live over 183 days in spain. And you will have to complete a UK tax return and a spanish tax return. Under that, no Spanish tax.

Spanish tax is far more onerous than UK tax. Tax free allowance is nowhere near £11,500pa. It is AWFUL unless you have a tribe of young kids.

Stay outside Spain for 183 days. Or just risk it like most ex pats do as there is virtually no chance of detection if you rent - and forget the UK obsession with owning a home - you might as well rent.
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Old Aug 8th 2017, 7:25 pm   #8
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Default Re: Newbie - Tax and things

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Spanish tax is far more onerous than UK tax. Tax free allowance is nowhere near £11,500pa. It is AWFUL unless you have a tribe of young kids.
Really? If you are over 65 and just have the UK state pension (on top of your UK govt pension) the tax allowance is €12400 which at the current exchange rate is 11270GBP.

That doesn't sound AWFUL to me.
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Old Aug 8th 2017, 9:26 pm   #9
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Default Re: Newbie - Tax and things

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The Spanish tax man will automatically assume you are renting your house out even if it's locked up and mothballed. You will pay tax on the rental income the tax man thinks you might be getting.
.
I thought the system was self declaration? How can they assume you are renting and pay what they think you are due? If it's not rented no income? What if say you are letting a son or daughter live in it rent free.
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Old Aug 8th 2017, 9:30 pm   #10
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Default Re: Newbie - Tax and things

Non residents pay imputed income tax on a notional value of the property based on the catastral value.

It has always been that way. If you actually let the property you pay income tax on the actual rental.

If you don’t declare it, it will be charged when you sell it. There is no way of avoiding it.
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Old Aug 8th 2017, 9:48 pm   #11
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Default Re: Newbie - Tax and things

I was aware of that but the post I referred to read like the income tax paid on UK property not rented out not non resident tax. That was what I was querying.
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Old Aug 9th 2017, 12:03 am   #12
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Default Re: Newbie - Tax and things

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I was aware of that but the post I referred to read like the income tax paid on UK property not rented out not non resident tax. That was what I was querying.
That's what I've always understood Bob. The Spanish tax office assume you are renting out your home in the UK and tax you on the "assumed" income.
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Old Aug 9th 2017, 12:16 am   #13
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Default Re: Newbie - Tax and things

That's worrying as planned on letting our daughter live in ours rent free.
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Old Aug 9th 2017, 7:44 am   #14
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Default Re: Newbie - Tax and things

Sorry Bob, I didn't pick up that you were referring to UK property.

It is treated exactly the same as if it was in Spain, but the calculation is different as there is no Catastral value. You pay 1.1% 0f 50% of the original cost of the property.

So it rather depends on how long you have owned it.

Info about it here

Los inmuebles situados en el extranjero también deben declararse en la Renta 2012
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Old Aug 9th 2017, 9:11 am   #15
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Default Re: Newbie - Tax and things

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Originally Posted by Fred James View Post
Sorry Bob, I didn't pick up that you were referring to UK property.

It is treated exactly the same as if it was in Spain, but the calculation is different as there is no Catastral value. You pay 1.1% 0f 50% of the original cost of the property.

So it rather depends on how long you have owned it.

Info about it here

Los inmuebles situados en el extranjero también deben declararse en la Renta 2012
Cheers Fred again I more or less knew that but not fully so thanks for that info. My worry was it seemed tebor was referring to income tax on rental whether rented or not rather than the non resident tax. Clear now .
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