Hi,
We are hopefully going to move to Spain next year. We will sell our house but will not have enough to buy a property in Spain. We will rent long term and hopefully get jobs when we come over. We have enough savings to see us through for at least a year if we cannot get jobs.
The advice I am asking for is about capital that we will have from the sale of the house, whether I will be taxed on it in Spain, to keep it in an English bank, transfering it to Spain etc. I am not sure of the best thing to do. We want our move to be permanant but do not want to make mistakes with the money we have. Thank you for any advice. My apologies if it has already been covered on this site.

It has been covered before Kaylee, but its a complicated subject. Simply put, if you come to live in Spain then your assets and income are subject to the Spanish tax regime. You will pay wealth tax on your worldwide assets of 0.5% (but there are allowances, and from what you say I don't think you would pay) and you will pay income tax at varying percentages, but again there are allowances and you can also deduct figures for your children.

Money you deposit in a Spanish bank account will be counted as income (yes I know thats ridiculous) and will be calculated on the average over the tax year. If you are a low income earner then it is likely you will not pay any tax at all.

You must also take into consideration you will only be covered temporarily by Spanish State Health Cover, and after about 2 years if you are not contributing to the Spanish system you will need to take out Private Health Cover.

Finally, if you are coming to Spain with the thought of "hopefully" getting a job, think carefully. For a non spanish speaker with no initial contacts it is not necessarily an easy task to get a job

For me I found the best solution was to keep all my capital in a UK high interest internet account (ING or similar). The rates of interest available here in Spain are pants generally! If necessary you can transfer funds to your regular UK high street bank account when you need to withdraw your daily living expenses which you can do from a Spanish cash point. You can open a Spanish bank account with a smallish sum of money to be used for paying your rent, utility bills etc. Definitely wise to give yourself a year's savings to live off until you find work.

Also you can open a sunpay account to transfer smaller amounts

http://www.sun-pay.com/

Hi Mitzyboy,

A key point here must be that UK (April to April) and Spain (Jan to Jan) operate different Tax Years and that UK will take an interest in your tax affairs for at least one year after you have departed.

Is it not the interest on the Spanish bank account that is subject to tax as income?

If there is doubt about the longevity of the move due to difficulty with language and employment has kaylee considered becoming a landlord and renting her UK house for a year until she is established then selling and settleing permanently in Spain?

Regards,

John.

Most people moving to Spain will face an element of double taxation in their first year. As you say, the tax years are different, but the UK tax regime expect to see you abroad for 12 months before they consider you no longer a UK tax resident. The Spanish of course consider you one after 6 months. You can claim back the tax from the UK by completing the relevant forms and getting them stamped in Spain when you pay your tax there.

Re the bank account, your average balance for the tax year will count towards wealth tax, and the interest will be counted as income

Many thanks for the replies. We are moving to a place where there are lots of ex-pats, it is a familiar place for us to make a start but do intend to move a little more inland when we do get established. We have just started learning Spanish. Our kids are grown up and won't be coming with us , but do want to come for long holidays .
I keep reading stuff on the net and in books about bank accounts and taxation etc and it does sound complicated so thanks Mitzyboy and Hillybilly for simplyfying it for me
Thanks John & Kath for the suggestion, but we do need to have the capital from the sale of the house behind us for us to move.
Thanks again, any information that you feel may be of help is gratefully recieved.

There are very good rates of interest for sterling transferred to a Spanish bank if you look around. I got 10%.

Who on earth pays 10%?

I notice from reading other messages that there are no isa`s , but are there ANY tax free investments offered by banks in Spain , or do you have to have large amounts of cash to invest ? ?,
John.

I don't believe there are, and tbh the interest rates I've seen are hopeless .... I'd also be interested to know who's offering 10% as mentioned above

BBVA were but not now, I think I happened to be there at just the right time, but you had to commit to a fixed length in the account.

Spend a little time here and you'll find that is a very common question. The only problem is the grass is always greener on the other side of the fence. I read some where that as many birts leave Spain as immigrate every year. Being broke and lonely is not fun. From my own informal survey most people posting to this board are retirees or close to it. If you have a regular income Spain can be a wonderful place to live. But moving here without a job or language skills is a recipe for failure.

But I don't want to rain on your parade (postings tend to come across stronger than in person). If you want to move to Spain and make a living I'd suggest considering teaching English in Madrid. The money is good and currently its a teachers market. I'm not sure about the rest of Spain but I know there is huge demand for teachers right at the moment.

Selling the house and having money to draw on will make the transition to here much easier, with the 2 of you teaching full time you can earn in the order of 3000 to 4000 per month (18 euros an hour * 25 hours a week each), a kings salary by Spanish standards. Also having money means that you can be a bit picky on your students and classes and take time off when you feel like it. As well it allows you bandwidth to build your own client base.

While Madrid isn't the first choice for most people on this board it has, judging by the sheer number of Madrid boards, there are alot of people who have fallen in love with Madrid and would never live anywhere else. (we make the move tomorrow)

You may want to consider spending 10 euros and read the ebook "moving to spain", the author did exactly as you wish, sold the place and moved lock stock and barrel to Spain it made for very interesting reading.

http://www.moving-to-spain.info/

regardless good luck.

Cheers for your advice tim. Best of luck with your move, hope all goes well