Help if possible
 

Hello all, i would be forever grateful if i can get some help please. We are a family of 5 moving to the south of Spain in the next few months we have already looked at schools for the children, so hopefully they will settle there. The questions i have are i will only be in Spain around 150 days +- a year as i work in the middle east, my wife is a nurse in the UK and will be keeping up her registration by doing shift work back every 6 months or so. Im paid in GBP into a middle eastern bank and according to what i can find as long as I'm outside of Spain 180 days i can live there tax free is this correct? I will pay what i need, its just i can't find the information and was wondering if anyone is in the same situation? i will be transferring my wife money each month would that be classed as taxable income for her? Any advice would be greatly received :)

Re: Help if possible
 

Hi and a warm welcome to the Spanish forum on BE. Myself and Fred James are the moderators for the Spanish forums whilst BEVS moderates Europe. Moderators are there to ensure that the site runs smoothly within the rules of BE. This is so that members gain the information that they are looking for and find their experiences on the forums to be friendly and worthwhile.

Problems and complaints should always be addressed to a moderator who will look into the matter and deal with it efficiently and fairly. Our members who post in the Spain Forums are usually friendly and helpful with a wealth of knowledge about the issues of living in Spain. I hope that you enjoy your time participating in the forums.

Please let me know if you need any further help.

Rosemary

Re: Help if possible
 

Be careful. If your family is living in Spain permanently then the taxman can deem you as being tax resident under the rules as your centre of interest is in Spain.

If you can prove that you are actually tax resident and paying tax somewhere else, then it may be acceptable. It is unlikely that you will be challenged, but there is always that possibility, so you need to be aware of that.

Re: Help if possible
 

Thanks Fred, I don't pay any tax in the middle east and i am classed as a resident in the UAE its my wife I'm concerned about, i was thinking if the money i transfer her for bills and upkeep i should just declare that to the tax man?

Re: Help if possible
 

Remittances should not be taxable.

Re: Help if possible
 

Thanks Scot, its a hard one to try and get my head around and is one of the factors of me leaving the UK as they want me to declare and pay tax on everything i earn in UAE but they don't take into consideration my living costs in the UAE, as the uk has a 90 day taxation law I'm stuck, i don't get wage slips and my employer will only pay into a middle eastern account, the landlord of the house we are moving too has said i can pay everything direct to her each month and they will sort out the utilities for me, its more the fact i want her to have easy access to funds while I'm away, maybe cash is the answer? please don't try and think I'm running away from paying taxes that isn't the case

Re: Help if possible
 

Murphy I suggest you look at a currency card for your wife, Canton FX do one as do others. You can load it each month or with a lump sum and your wife can use it and withdraw money. These are separate from Spanish banks and are not within Spanish jurisdiction.
Regarding your wife's tax status, without wishing to resurrect another thread I suggest you take a look at the 'to do or not to do' thread further down the page. Lots of info and opinion on residency and tax!

Re: Help if possible
 

Thanks BigD ill take a look

Re: Help if possible
 

This is what the OP needs to be concerned about. The Spanish tax authorities are very likely to declare his centre of interest as being Spain, and to therefore deem him to be a tax resident. This is regardless of the number of days he spends there, how he remits money to Spain, or any other factor.

Exactly. Unfortunately for the OP he is not paying tax in the UAE, and so this is likely to give the Spanish tax authorities even more reason to ensure he pays tax in Spain.

Incidentally, for anyone in a similar position to the OP (working in a tax haven and looking to spend their off-time in a European country), Spain is a bad choice, given the "deemed tax resident" rule. Countries without this rule are far better choices.

Re: Help if possible
 

Thank you teejaydee, if I can ask another question. I don't mind paying tax at all be it in Spain or the Uk, the problem I have is I have living costs in UAE which the UK, im not sure about Spain don't seem to consider. I've only just started this job and I have had to have set up 2 bank accounts here, one where my salary goes in and one where I transfer part of my salary to the UK to cover bills, (And pay tax on this amount) as my costs would be a lot cheaper in Spain could I do the same thing? or would I have to declare everything? And are there tax specialists who could help me out? I don't own a property in the UK and would only be renting in Spain.

Re: Help if possible
 

I am 99% sure you would have to declare your entire income in Spain, as that is where your centre of economic interests lie i.e. your children are resident and go to school there

I am pretty sure you could not get any relief on your living costs in the UAE

Re: Help if possible
 

Thanks Cricketman, if that's the case where they would want me to pay tax on my full income and they wouldn't consider that I have living expenses in the UAE how would they prove it? I mean if I say figuratively transferred my wife 1000 euros each month and paid tax on that, what would make them think that i'm earning more?

Re: Help if possible
 

Also as some have previously said in other posts but if my centre of economic interests, she will still be working in the UK and paying tax and ill be outside of Spain more than 190+ days so does that then mean because of the children who will be there would i still declare all income?

Re: Help if possible
 

You can commit fraud whichever way you like, but you run the danger of being caught!

Re: Help if possible
 

However the danger of being caught in Spain is very slim indeed!

Re: Help if possible
 

Hi Murphy, I worked in Abu Dhabi for several years. People who move to the UAE must apply for residence, as you know, in order to work there. But whilst you are resident in the UAE, it does not necessarily mean you aren’t tax resident in the UK or anywhere else. I suspect the UK wants tax from you either because you aren’t outside of the UK enough days in a year or because they believe it to be the centre of your interests, which would be because your wife and kids are there.

You should have filled in a P85 at which point the UK tax people will have clarified exactly what they make of your circumstances and what that means in terms of tax payments. If your family becomes resident in Spain you will have to have the same dialogue with the Spanish authorities. It appears you want to base your wife and family in Spain, have your wife pay tax in the UK on what she earns, and pay a bit of tax in Spain on the 1000 ish a month you transfer to her. Absolutely it ain’t gonna work, my friend, and the Spanish tax man will make that clear to you.

You’ve hatched the plan of using Spain as a home albeit with wife and you both in and out to make money whilst limiting tax payments. To enjoy all the benefits of the zero tax in the UAE you have to live there, full time, with wife and family. If you don’t, your European home country (be it the UK or Spain) is going to take its slab of meat.

BTW, your employer is breaking the law if you are not being supplied with a wage slip.

And your UAE bank(s) (two accounts, I don’t know why, you’re doing nothing that can’t be done with one) will send details of your balance and amounts in and out to the UK HMRC if they ask for it.

Re: Help if possible
 

In respect of a wide range of things I would agree with you, but on this one absolutely not. The UK and Spain are as good as each other at detecting this and they're both very good.

Re: Help if possible
 

I doubt very much whether any country would take into account a persons living expenses. Tax is paid on the money earned not after allowing for what it costs for you to live there.

Rosemary

Re: Help if possible
 

Murphy as I understand it you work full time in the UAE, there is no income tax levied there and you are considered resident in the UAE. You want to make yourself non-resident in the UK by spending less than 90 days there and you want to do this by being in Spain?
My understanding is that the only way to legally avoid paying income tax is to move your entire family to the middle east where it is zero weighted and not be in the UK for more than 90 days in any tax year.
You should legally declare and pay tax on your entire world wide income in either Spain or the UK depending on where your family are or where you are when not in the UAE. (centre of economic interest/90 days).
Expenses incurred in the UAE can not be offset against either tax regime. Transfer of money between husband and wife for living expenses are not regarded as income for tax purposes.
If you want to break the law and avoid tax then things to consider; the UAE, UK and Spain are signatories of the Multilateral Competent Authority Agreement and can share details with each other if requested (as Horlics mentioned above). HMRC are pretty efficient and the UK system is designed to prevent fraud. The Spanish system not so much!

Re: Help if possible
 

I have one of those, I can use it all over the world. It's charged with cash by you in the UAE, and your wife would just go to a cash point / ATM and withdraw. Of course that means there is no income through a bank in Spain attributed to her, just in the extreme there would be questions about how your wife gets the money to live :-) Not suggesting or condoning anything, just saying :lol:

Re: Help if possible
 

If the children are sent to state schools then they do random checks on those foreigners who have children in the local school, but declare no income in Spain

Re: Help if possible
 

Ok thanks all for your comments and help, i wasn't wanting to avoid any taxes. i just wasn't sure on whats required, as i read that if i was out of the country so much i personally wouldn't be liable for tax in Spain, i don't own a house in the UK and was planning on renting one in Spain.... Maybe not now though. I would end up paying a higher % tax rate in spain than i would in the UK, Im ok as I'm in the heat for 7 months of the year, the mrs won't be too happy :( oh well back to the drawing board.

Re: Help if possible
 

If your wife and family are not out there with you, the UK or Spain are going to want a cut of your pay.

I remember one colleague resigning and heading back to the UK, only to reappear in the UAE within a month. On his arrival home he went to see a tax advisor who informed him he would owe 70k if he remained in the UK. He hadn't done enough time away with proof of a permanent residence abroad.

He admitted he should have seen the advisor sooner.

Working outside of the UK is straightforward tax-wise if you shift your whole family with you and spend at least a full tax year away. Any other scenario can be complicated and should be checked.

The UK and Spain are actually pretty generous in that they allow you to work away for several years and then return having paid nothing and yet start accessing state healthcare and benefits again.

Unlike the USA whose citizens have to pay some tax on earnings abroad or give up their citizenship.

Re: Help if possible
 

Yes, thats what I said ;):lol: