Be happy

Ok I’d appreciate a little help to check I’m reading the residency info correctly as with deadline ticking we are still up and down deciding what to do for the best for our future / retirement ... 🙏

So we have an apartment in Spain and have had it for 4 years. We love Spain, we love the sun. We have put in the non residency tax return each year and had planned to retire to Spain at some point.

Im trying to weigh up benefits of becoming resident and I really don’t think we are ‘wealthy’ enough to make the move due to higher tax.

I know it’s best to get tax advice but can someone tell me if I’m reading this right / wrong. Currently we are both working but can both retire now and have pensions and savings. (OH reaches state pension age June 2025 I’m a long way off that 😁)

So say we put in for residency before Dec 31st and residency is granted say January 31st .... but we cannot get out to Spain for a year or so because of COVID due to quarantine rules (my adult son (he won’t be moving with us, just visiting) has ongoing operations so this is a challenge for us but he is the one who is desperate for us to go full time as much as we do as he likes idea of recuperating in the sun at leisure 😎🤣)

Do we put in tax returns going forward as residents even though we’ve not actually started living in Spain?

I’m reading it that we do and I totally understand that if we didn’t need to then you are kind of getting two bites of the cherry with one foot in each country and choosing when you do and do not want to be Spanish resident but if it wasn’t for Covid restrictions we wouldn’t even be thinking about this.

Our second issue is paying more tax due to Spanish taxation and on this situation we need to get tax advice. Is there a clear concise explanation of Spanish taxation rules that I can be pointed towards ?

If we retire in Spain we were going to buy a larger property to make sure family could visit comfortably so if we do not move lock stock and barrel we would just keep a smaller property here in UK and stay non resident and divide our time between Spain and UK sticking within the 3 month rule.

tia

Rosemary

You only register for residency if you are actually resident in Spain.

Rosemary

Be happy

sorry Rosemary I do appreciate that and the plan was that we would be there right now and going thru the process with intent of staying. Are you saying that as we are in UK and cannot go over to Spain to stay for a long period right now that we are not allowed to apply for residency ?

we had thought of going over for a couple of weeks to start process next month.

Joppa

OK, you can get residency by getting to Spain by the end of the year and applying. But in 2021, if you don't live in Spain for at least 6 months, your residency will be cancelled.

Be happy

cheers Joppa that makes sense and that info was not jumping out at me 👍

Joppa

There are certain exceptions to the 6-month rule for residency, but reluctance to travel because of UK's Covid restrictions isn't one of them. Exceptions include need for medical care for serious condition (like you need an op in UK and a period of recuperation), job training, higher education etc.

snikpoh

REALLY? Why not have the op in Spain - that can't be valid surely?

Be happy

cheers Joppa. We would not fit into those exceptions but appreciate info 👍

Chipmonk

If you are not really at retirement age and therefore would rely on another income presumably generated from UK then you will need some tax advice. Differences in tax system can hugely disadvantage you if you have spent most of your life planning retirement based on UK system and then move to Spain.

missile

You have not clearly stated why you want residency?
Do you intend to live in Spain for more than 6 months in 2021?
Act in haste is never a good plan.

Be happy

yeah we can afford to retire on pensions without continuing with additional income ... it’s the taxation differences im weighing up . The sun is obviously the pull. Is it worth that extra tax ;-)

Be happy

yes sorry apologies, we had UK house up for sale just before lockdown and OH planned to put retirement date in on house sale.
obvs like thousands of others our plans have had to change considerably.
yes the plan was / is to be in Spain 2021 and stay over 6 months.
as I said this was all before Covid and quarantine. I probably know my answer even without tax implications. I can’t risk being stuck in Spain in quarantine rules no matter how much I love Spain and love the sun. We don’t know what is ahead and I’d be tortured if I couldn’t see my son without having to think about quarantine rules.
the rules are the rules and I appreciate I’m lucky that I have choices.
thanks for everyone’s answers. I think we will be downsizing in Scotland and when restrictions change we will split time between Spain and Scotland 👍👍

Moses2013

I think that is wise and who knows what will happen. Obviously we have no Brexit in Ireland (Republic) and don't have to worry about deadlines but I still wouldn't force a move now. Main thing is your health and worst case you just spend a few months in Spain. At least you have something to look forward to and Scotland is not a bad place to be. We also cancelled our trip to Spain next week.

missile

I would suggest you are very wise. Do not burn your bridges too soon. If you can afford it, I would suggest you keep a house in UK.
I have several friends who sold in UK and now feel trapped as they can no longer afford to move back "home"

atlasthemonk

is this a Spanish rule or a Schengen rule, post Brexit ?