tortis

Hi fellow members,

We are here in Valencia just 6 months, we would like to know if you could advice us what are the advantages and disadvantages of becoming a permanent resident. Any light in this matter?????
Txs,
Tortis

Fred James

You don't have a choice in the matter. If you spend more than 183 days in Spain in one calendar your, you are deemed to be fiscally resident and then you will pay tax on your worldwide income and possibly your worldwide assets.

The income tax rates in Spain are generally higher than in the UK, but there are still some benefits to being tax resident from the point of view of capital gains and inheritance tax.

tortis

Thank you.

BigD Nerja

If you don't want to be a permanent resident just don't tell them, the Spanish do not record entry or exit details so they have no way of proving how many days you spend in the country.

Fred James

They don't have to prove that you have been in Spain if they suspect that you are evading tax. It is up to you to prove otherwise.

BigD Nerja

Fred a couple of things spring to mind;

If you are non resident how will the authorities ever suspect you?

It is not true that it is up to the individual to prove their status, if you are questioned regarding your status and you declare you are non resident or refuse to co-operate then it is up to the Spanish authorities to prove otherwise via the Spanish legal system.

We all know how inefficient the Spanish administration is so I really wouldn't worry about it.

MikeJ

Which is fine while they freeze your bank account and seize your assets until you can prove your status. Non-cooperation and lying is probably not a good strategy.

coastal

So, if i spend 183 days in Spain, i am entitled to be a resident? And can claim benefits from the Government and be legally Spanish then?

BigD Nerja

Coastal, I don't know much about Spanish benefits/welfare as I don't think I've ever met an expat who receives any. Anecdotally I believe the Spanish system to be less generous than the British one.

Regarding the freezing of assets, the Hacienda does indeed have the power to freeze assets in Spain however only for non payment of tax. It first has to prove that you are resident and have to submit a return and then that you have a liability. It has no power over assets in the UK.

Boseley

If you are an EU national and habitually resident in Spain, you must within 90 days register at the foreigners office, or other designated place, failure to do so is an offence punishable with a fine. see link below,

https://www.gov.uk/guidance/residenc...ments-in-spain

MikeJ

If you have lived in Spain for more than 183 days then you become a tax resident whether you like it or not. As a tax resident you have to declare your worldwide assets and income and pay Spanish tax on them - this includes declaring UK assets as well as income. If you cannot show that you have paid the tax already as provided under double taxation treaty then you are liable to tax. It is your obligation to prove this, not the Hacienda's to find out. They will 'deem' that you owe the tax and you have to show that you don't. At this stage the Spanish Hacienda can freeze bank accounts etc. So hiding your head in the sand may work in the short term as the Hacienda may be too busy to chase you up, but you are living outside of the law and one day it will bite you in the bum!

BigD Nerja

Mike whilst I'm not disputing most of what you say my point is this, how will the Hacienda know that you have spent 183 days in Spain in one calendar year unless you tell them?

scrubbedexpat095

This is completely wrong, the max UK state pension is approx €600 a month whereas the max Spanish state pension is approx €2500 (and is paid 14 times a year) and I'm not sure but I think the onus is on an expat to prove he's not resident rather than Hacienda proving he is

BigD Nerja

Mhf, I obviously misunderstood I thought the question was regarding state benefits such as unemployment, housing etc... I know nothing about state pensions.
Regarding the Hacienda; if we assume that you are correct and somehow they say to an individual prove you have not been in Spain for 183 days it would be simple to say that you haven't and that you travel back to the UK or any other country on a regular basis and you remain domiciled in the UK for tax purposes.

scrubbedexpat095

I asked the same question a while ago and someone (whose opinion I really respect) stated that if you do have a dispute with Hacienda then you need to keep proof of your travels in and out of Spain i.e Boarding cards etc.

Personally speaking, it is academic for me as I've been a resident for a long time.