EMR

Having a property in Spain may still require you to complete a Spanish tax return.
You can obtain ( I have one ) a certificate of tax residence from HMRC which confirms my UK tax status, It does not however mean that I am exempt from local taxes ( in Portugal ).
However I get a credit in the UK for tax paid elsewhere.
Remember in the UK you still have to declare your worldwide earnings from any scource and pay UK tax if none has been paid.

CapnBilly

It certainly is a cery complicated situation, its no wonder the experts don't agree. I'm sure you've worked your way through the new SRT, and you may be resident under the new rules. However, IMHO, going to ITaly or Portugal may complicate your situation, depending upon how many days you spend in Spain. Normally, when you are tax resident in a country, they will only release you when you can prove you are tax resident in another country.

If I was in your position, i would definitely spend at least 183 days in at least one country next year, so there can be doubt that you are tax resident there e.g UK. The very last thing you want to do, is be considered tax resident in both countries, and it decided by the ties test , because as i see it, you'll stumble over the nationality test. In future years, it would be different, as your are then tax resident in the UK, until proven otherwise.

Just my sixpennorth, for what its worth.

me me

Thanks CapnBilly, I see what you mean about the nationality , but I must add that my OH moved to England as a 7 year old, and spent a good chunk of his adult life there. In fact he has lived longer in the UK than in Spain

We met and were married in the UK, both passed our driving tests in the UK, our children were born in the UK, and we have followed the UK surname pattern of only having 1 surname for the whole family.

So although the OH is Spanish, it is not as if he is giving up all he knows to move to a country he knows nothing about, he also is planning to take up residence in a country that he regards as his real home.

The country where both sets of our parents moved to years ago, so as you can see we are hybrids that could put forward a good case for returning to the UK, and that Hacienda could not really argue with.

CapnBilly

That won't stop them though. I would just try and make sure I close off all the potential weaknesses.

A few years ago i moved back to the UK for tax reasons. I took advice, and in the year i moved back i filed my return for the previous year, and then submitted a modelo 030 to deregister. My application was stamped with no problem, but i had to provide a " Certificate of Fiscal Residence" from the UK for my wife, even though, at the time, she had no income at all. I got this from the UK, and they signed her off. We then submitted a form 210 for our property in good time.

I'm very glad I did now, as if we are asked about our 720, we can prove the income was received when we were non-resident. The alternative was not to submit the modelo 030, in which case we would then potentially have to go through a painful process of proving we were non-resident.

me me

Thanks again, you are right, I would not want them to still have their teeth into us, and us end us with a big chunk bitten out of our backsides.

EMR

One other thing to consider is that if you become UK tax resident and are UK nationals then your global assets will come under the UK IHT rules.
There is another classification UK tax resident but not domicile which effectively means your overseas assets are subject to local taxation.
This is a classification some use where their assets are in low tax countries.
Foreign nationals who are UK tax resident are deemed to be UK domicile if they have been in the UK for 20 years.

Neptuno

If you get a modelo 030, on returning to the UK, are you then non tax resident from that point, up to Dec 31st, so the next year the tax return for the year before will be from Jan 1st -date of obtaining modelo?
You write about being asked about your 720-many banks do not keep records after 6 years-how far back would the Hacienda enquire about your money?

CapnBilly

As you know Spain doesn't have split year treatment, you're either resident or not resident for a year, so I paid our 2009 tax at the end of June, and then submitted the modelo 030 for 2010, and for my wife I had to provide a Certificate of fiscal residence for 2010/11. So were non resident for 2010. I also had (and still have) flight records for when I was away etc. I made very sure I spent well under 183 days in Spain that year.

As far as Hacienda are concerned, well, I guess it depends on how long you have been a resident, and what information they can glean from the form. So for example, if you were a tax resident in 2010, and you reported an account with say £100,000, they could ask you where the money came from, particularly if you hadn't previously been declaring any bank interest.

To be honest I have no idea if they will do that, I am only guessing, based on what I would do, if I was in charge of this project.I have previously posted that I would write an algorithmn to identify returns (720 and 100) that don't stack up, and then review them manually. IRRC, ley 1558/2012 abolished the statute of limitations as far as these returns were concerned, so the worlds your lobster

The point I was making was that I went back to be specifically non-resident that year, and followed the procedure I outlined, to make absolutely sure I was non -resident in that year. As I said before, I like to cover off any weaknesses. At the time the 720 was just as embryonic idea somewhere. As we now know about it, this is the same process I would follow if I went back again, as I think it did what it says on the tin, and I'm glad now I did it that way

guirijohn

I think the best you can do is file your modelo 030 confirming your UK address, file returns as a UK tax resident and ask for a certificate of UK tax residence.

Spain can do quite well out of you as a non resident, I doubt if the tax office will have any interest in debating your residence status. It is cutting staff, morale is low and they have enough to do.

me me

Being under UK IHT does not bother us, as it is a lot more generous than the Spanish equivalent.

Fred James

The allowances and exemptions are higher but the tax rate is also higher, and unlike Spain there are no lower rate bands.

It is the total estate that is taxed in the UK so leaving it to multiple beneficiaries doesn't help whereas in Spain it can reduce it significantly.

The main difference between UK and Spanish IHT is that surviving spouses are treated very favorably in the UK and not in Spain.

me me

And I intend to out live my husband.

Neptuno

What does it say for the tax system in Spain that you felt you had to return to UK to avoid tax.Obviously you are not in agreement with those who think paying CGT is the penalty you pay for the "benefit" of living in Spain. Surely, having to de register for tax, residency, health care, etc and then having to re register on return was a nightmare?
HBG said there is no shortage of people wanting to move here-that's probably because they have no idea how the tax system in Spain will affect their savings, pension pots, etc, or if they do know they're willing to take the risk and not pay their taxes in Spain anyway.Any one who is bereaved in Murcia must surely feel that paying a huge lump of their inherited assets to the taxman in IHT is not a penalty they want to pay.Murcia has abolished the regional allowance, leaving only the measly state allowance to offset the value of the assets.With Andalucia having an allowance of 175,000 euros, thats enough to make anyone sick!

CapnBilly

Well, I don't think anyone likes paying tax, and I often post about the difference between tax avoidance and tax evasion. Personally, I would never practice the latter. As we have said many times before on this forum, everyone has choices. When I moved here, I knew that I would have to return to the UK in the circumstances I outlined, so I planned for it, and did it when the timing suited us. Perfectly legimate, and planned, so was it a nightmare, no not really, was it worth it, absolutely. Would I do it again, yes, if the circumstances, i.e the amount of tax due, warranted it.

Fortunately, I know a reasonable amount about tax, so I knew it was coming, before we moved here. Thats where I think these forums are great, and I always try and share my experiences, so people can benefit from the knowledge. I wasn't a member when we moved, in fact, I think they still in the early days.

me me

How nice to hear it is well for you, lets hope you don´t get too much criticism from a certain type of poster, because there is not right or wrong answers only answers to fit the cases involved.

Each of us have our own situation to consider, and if we can save/gain X thousands of euros by amending our residence status, then why not.

We don´t have children in school, we don´t have jobs that we could not afford to give up, so in our case it is best for us, my OH does not like the idea of having his uk bank accounts, and his private pension plans open to scrutiny by hacienda.