codex70

I know there are a lot of questions about the 183 day rule, but I've searched and not really found the answer to my question.

We're looking to move to Mallorca later in the year once our property here is sold and we've bought something smaller in the UK to rent out and give us something to keep a foothold in the UK.

The issue I'm concerned about is that I get paid most of my income as a dividend being a company director. I know the tax arrangements in Spain are different to the UK, so this probably isn't the most efficient way of being paid in the future. The question I have is when does the 183 day taxation rule run from as the UK tax year runs from April and the Spanish one from January.

If I move out after July would I be deemed to have spent more than 183 days in the UK this tax year and pay UK tax for any income before we leave? Do we then start with the Spanish tax in January? Does it just switch when we move, so we pay tax in the UK on earnings up till we leave, then tax in Spain for income from then on?

If anyone knows the answer, or could recommend a good Spanish accountant who understands the UK and Spanish tax systems then I'd love to know. We would be happy to pay for the service, because I know that if we get it wrong it could end up being a very expensive mistake. Also we'd need a good Spanish accountant once we've moved to keep our tax affairs in order!

snikpoh

The '183 day rule' is a maximum of 183 days (not necessarily contiguous) in any calendar year - which is also the Spanish tax year.

Perhaps you could update your profile to show where you are - then someone can, perhaps, recommend and accountant in your area.

Fred James

If you leave the UK in July you won't become tax resident in Spain until the end of June 2014 but that will make you tax resident for the whole of 2014.

However, the UK allows split tax years so you would cease to be UK tax resident the day after you left. This means that you have a period of about 6 months when you are not tax resident anywhere and you may be able to get a tax rebate from the UK for the 2013/2014 tax year.

It's pretty complicated but all you need to know about UK tax residency is here:-

http://www.hmrc.gov.uk/cnr/hmrc6.pdf


There is information about how dividends are taxed under the tax treaty here:-

http://www.hmrc.gov.uk/taxtreaties/i...ain-uk-dtc.pdf

codex70

Fred, thank you I think your answer makes things a lot clearer at least. I'm going to have to get proper advice, but it looks like we'd be better off leaving in the latter part of the year.

As for the links you provided I took a quick look, and I recognised most of the words, but combined together the way they were, they made no sense to me whatsoever I'll get the wife to look over them, she does all the company admin and book keeping anyway.

susieru

Hi, i am new to this site. Does anyone know the rules for retired non tax payers living in spain 9 months of the year & uk 3 months of the year. Home owners in th uk.Can uk assets be touched?

Fred James

If you live in Spain for 9 months you are tax resident in Spain and must pay Spanish tax on all your worldwide income.

As a tax resident you must declare any assets held outside Spain by the end of April or risk being fined an amount greater than the value of the asset.

It has been well discussed in this thread on the forum..

http://britishexpats.com/forum/showthread.php?t=784875

susieru

Thanks Fred, as yet we are resident in UK! as did not know of this ruling! we have stayed in Spain since last October & intend returning to uk in June. then to return to Spain in October again. We have no income in the Uk other than pensions,Is the 183 days a continuous one or will itbe any 183 in a 12 month period.

Rosemary

As Concierge for the Spanish section of BE I would like to say hello and welcome.

BE is a very large expat website, so if you have problems finding your way around we have concierges who will try to direct you. The moderators for the Spanish forums are Mitzyboy and Fred James, moderators are there to ensure that the site runs smoothly within the rules of BE. Problems and complaints should always be addressed to a moderador who will look into the matter and deal with it efficiently and fairly. Our members who post in the Spain Forums are friendly and helpful with a wealth of knowledge of the issues of living in Spain. At the top of the page you will find a quirkily named thread called Free Beer which is full of important and useful information. Hope you enjoy your time participating in the forums.

Please let me know if you need any further help.

Rosemary

Fred James

It is 183 days in one calendar year.

If you return to the UK in June there is no problem but another month in Spain this year will make you tax resident.

The pensions, unless they are UK government pensions, will be taxed in Spain.

Jontee

I will add my query to this thread as it is the opposing query to the opening post.

I am moving back permanently to UK later this year and I am also confused as the tax years are different Spain/UK. I currently pay tax in Spain. If I move back to UK in July (after 183 days) I assume I pay all my taxes for 2013 to Spain on return made in May 2014.

But if I move earlier, say mid June, do I make my tax declaration for 2013 in the UK? Or will it only count in UK from 5th April?

If I am less than 183 days in 2013 how do I make the declaration to Spain on the sale of my property in 2013 if I am taxed in the UK?

Is it beneficial to ensure I spend more than183 days in Spain so that this is covered?

If I spend 183 days and pay tax 2013 in Spain, am I taxed in UK from January 2014, or from April?

Is there a beneficial time to make the move to get the best out of the tax system. On returning to UK I will not be working, just in receipt of pensions.

Sorry for all the questions, but each time I think I get my head round it I start thinking of other scenarios and simply end up totally confused.

Fred James

I'm not surprised - it is very complicated and you may well end up being taxed in both countries but that will get sorted out.

You mention the sale of your property - is it CGT that you are concerned about? If so you need to be tax resident when you sell it to be able to claim the exemptions that apply to tax residents.

As for the other questions I suggest you read the HMRC guidance that I posted earlier

http://www.hmrc.gov.uk/cnr/hmrc6.pdf

Just remember that if you spend more than 183 days in Spain you are tax resident for the entire tax year but you may be deemed tax resident in the UK after only 90 days. However the UK allow split years and only tax you for the time you were actually resident.

Rosemary

I thought that you had to buy another property here in Spain within a set timescale in order to claim any exemptions on the CGT. Is this wrong, can you clarify for me?

Rosemary

Fred James

Yes you do, within 2 years.

According to Blevins Franks that could be in another EU country so long as it is your new home.

If you are over 65 then there is no tax to pay, assuming you are tax resident and that it has been your home for three years.

Rosemary

Thank you. I asked because things such as this change so regularly and I do not keep abreast of things in the same way that Graham did. Neither of us knew that the new house could be anywhere within the EU, we thought that it had to be another house in Spain. Your last sentence is good to know as I had forgotten that I have had a birthday and that this is my present situation so the CGT no longer affects me.

Rosemary

Rosemary

Jontee

Thanks for the responses. I am not concerned about CGT as I have been a resident here for 10 years and will be reinvesting into another house within the allowed 2 years (in UK).

I thought I had heard that whether tax is involved or not, it was necessary to show a house sale on the Spanish tax return? If this is so then if I return to UK before the 183 days, do I need to still make some kind of return in Spain for 2013 just to show the sale, or is it completely irrelevant if no CGT is involved?

I have tried reading the HMRC information, but that confuses me even more as they state 183 days in the Tax Year, not calendar year!! So I could be in Spain until August ( so need to do a Spanish tax return for 2013) and then from August - begining April 2014 is more than 183 days so I would also need to be taxed in UK. If I have to do a tax return for 2013 in Spain, would HMRC just tax me for the time from January 2014?

I know if I do end up being taxed twice that I could claim it back, but with only being on pensions I really cannot afford errors, so want to avoid this happening if at all possible.

Also, is there a beneficial time to make the move when maybe I gain some tax free time?