stephenk933

Hello

I am looking to move to Spain this year. I currently have a UK based Ltd company that employs both me and my wife.

Has anyone done anything similar and how did they find the best way?

From research on this site it seems
a) could possibly be a 'non fiscal resident of spain'
b) Leave the company in the UK and pay UK taxes that would be liable, NI, PAYE and company tax in the UK. I could then declare this on an annual basis to the Spanish tax authorities and pay any differences owed, any idea what this is likely to be?
c) Leave the company in the UK but pay myself in Spain under Spanish tax rules
d) Move the Ltd company to Spain

Any help much appreciated

Thanks

Steve

EuroTrash

IMHO, C and D are compatible with your statement "I am looking to move to Spain" but A and B aren't.

A and B seem to boil down to essentially the same thing. In the case of A, if you are not fiscal residents of Spain, ie you remain fiscal residents of the UK, then in what sense have you moved to Spain? If you mean you intend to come here on regular holidays then fair enough, nothing changes, but that's not what people usually mean by "moving".

Likewise B, the only way this would work if you both return to the UK to carry out all or most of your business activity, so again, in what sense have you moved to Spain if you just pop over at weekends?

If your company is based in the UK you would pay company tax there, but you pay your personal tax in the country where your bum is when you do the work, so if you do the work in Spain you pay income tax in Spain. If you neither live nor work in the UK then except in certain specific situations you are not eligible to belong to the NHS/UK soc sec system, therefore you can't pay NICs, you need to pay ss in Spain.

missile

You have not given us sufficient info to comment. What is the business activity? This may limit what options are available to you.

stephenk933

Hi

some further info, I run a company that supplies specialist services to the Pharmaceutical and Medical device industry. This entails working in a number of countries in the EU

I got the 'non fiscal resident' from reading other posts on this forum

I prefer option C with leaving the Ltd company based in the UK but pay myself and wife a wage in Spain. Has anyone tried this?

If I pay income tax in Spain does anyone know the tax rate and would I still require private health insurance to apply for residency?

Thanks

Steve

snikpoh

To be considered as non-fiscal resident in Spain, your wife and your family as well as you MUST reside for most of the time in the UK. Your main home MUST be in UK

To pay yourself a wage in Spain, you would have to be self-employed and then bill the UK company like a consultant/contractor. This would incur SS payments in Spain as well as tax (of course). However, on the up side, you get state health care for 'free'. If you are self-employed here, then your whole family benefits. If your wife is also self-employed, then you have two lots of SS payments to make - not clever.

EuroTrash

For the sake of it, would setting up a Spanish company not be potentially a safer bet? Just in case Brexit doesn't include a deal for UK companies to continue providing services into the EU tarif-free...

Smithy73

This makes a lot of sense... but for the purpose of answering you current question - until Brexit actually happens..

b) Leave the company in the UK and pay UK taxes that would be liable, NI, PAYE and company tax in the UK. I could then declare this on an annual basis to the Spanish tax authorities and pay any differences owed, any idea what this is likely to be?

Is the best answer - because until you have moved here and both got on with your Spanish residency - you are not Spanish tax residents and there is no point worry about this to much.

You need to decide where you want to move to in Spain. Buy or Rent here and apply for Spanish residency. You need to show an income into a Spanish bank account and have private Spanish health insurance for starters... Because of Brexit, it's a good idea if you can get this done, this year!

Once you have done this... it is likely that you won't become tax residents until 2019 anyhow.

As UK Ltd company owners you can be company directors, take a salary and dividends and pay UK tax, even though you don't reside there, although you may find just taking dividends for the payment, less complicated.. but speak to your UK accountant.

Of course things may change with Brexit, but until we know what these changes are.....

So the way things currently stand, those people in your situation either pay the difference in tax for the salaries and dividends (or as company directors just take dividends - less tax efficient in the UK but easier if you are living in Spain) as tax on world wide income or one of you needs to go Autonomo.

The Autonomo route will be the most useful. You use it as a vehicle to pay the tax difference and by paying into the Autonomo system, because you are married, you are both eligible for Spanish healthcare for the one payment..

When you have sorted your move here, find yourself a good Gestor that has a little experience with the above... but for the first few months, you will need to get your residency applications sorted.



> any idea what this is likely to be? No idea, as we don't know your financial situation - but generally more tax is paid in Spain... the trade off, is quality of life here is better.

We were in your position 2 years ago and coming here has been the best move ever

simonbear

Interesting to see you say this - I am in the same position as the OP. In the UK, we pay ourselves small salaries and take the rest as dividends. In Spain, I was thinking we might pay ourselves salaries only, given that that would reduce our Corporation Tax liability in the UK. Wouldn't paying yourself dividends only have the opposite effect?

Smithy73

The Spanish view dividends this way as straight income and tax it in the same way as salary
Also the Dividends allowance (tax free amount) was reduced in April 2018
It´s complicated and more so depending on how much you plan to take from the company in salary.
You will need to confirm with a good UK accountant.
As far as I am aware even if you are a tax resident abroad you will still have to pay UK income tax on salary taken from a UK company.
You then have to declare the salary and any tax already paid, you won´t have to pay tax on it twice, i.e. in the UK and then in Spain.

Perhaps the most cost effective way (and i have no idea of your line of work etc) would be to take a small salary each (you mention we) - £700 a month each means you pay no income tax or NI on this earning. If one of you were to register as self-employed here in Spain - it’s called Autonomo - would you be able to bill your UK company for service? The social security payment of €290 (sliding scale up to this after 18months) provides healthcare for both of you (assuming marriage etc), a Spanish pension after 15years and a little unemployment benefit. The beauty of this is it´s tax deductible on your Spanish income!

simonbear

Thanks Smithy. I probably should have given a bit more info but didn't want to hijack the thread. Thanks for the the info.

I've only been reading up for the past couple of nights - terrible timing for us to be making the move with Brexit and we've got 2 cats so we're waiting to see what happens re: pet passports, fun! Anyway - software company with four employees, including myself and my wife. When we move, there will be 2 employees in the UK and 2 in Spain (us). We're looking to rent first for a year and go from there.

I think I have a bit more reading to do!

chaz99

I believe that the other issue is that the Spanish authorities may deem the company, although registered in the UK, to be resident in Spain, and hence you would need to follow option (D). However, from what I have investigated setting up a company in Spain is bureaucratic and expensive so best avoided if possible. Plus I assume that any contracts made by the company would need to be in Spanish law (rather than English law).

I'm still trying to work out myself (as a Spanish resident), how to set up a UK ltd company and avoid it being declared as resident in Spain. The business that I am operating in an online business that has all its customers in the UK, with suppliers in various countries, but none in Spain.

I have read various options in how to avoid the company being declared as resident in Spain such as:
a) holding the board meetings in the UK
b) having another directory who is a UK resident
c) having another person who is UK resident being the sole director (e.g. one of my parents) while I remain being the only shareholder

If anyone has some up to date advice on this I would be most grateful.