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Live in Spain, work in UK, some clarification please!

Live in Spain, work in UK, some clarification please!

Old Apr 8th 2017, 11:59 am
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Default Live in Spain, work in UK, some clarification please!

I know the forum is full of threads like this, and I honestly have tried (and am still trying) to do the research, but I'd love it if you guys could just clarify some facts.......please!

Scenario would be:
  • dual Irish/British citizen
  • wants to have permanent home in Spain, renting not buying
  • not of pension age
  • would be working 3-4 days a week in London, commuting by air
  • no fixed home in the UK

From what we have found, as he'd be spending over 183 days a year in Spain, he would need to get
  • a NIE
  • a Spanish bank account
  • medical insurance, as a Spanish resident not paying into the Spanish welfare system
  • and would be taxed in Spain on his UK income, but no longer be taxed on it in the UK as he would be a non-resident in the UK.

Are we on the right track here or are we making glaring errors en route?! All comments and help very gratefully received.
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Old Apr 8th 2017, 3:25 pm
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Default Re: Live in Spain, work in UK, some clarification please!

All income earned in the UK will be taxed in the UK irrespective of tax residency. However, any tax paid can be offset against tax paid in Spain on the same income. The one major exception to that is pension income (so long as it is not a UK government pension), but even then you have to get HMRC to have it paid gross.
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Old Apr 8th 2017, 5:17 pm
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Default Re: Live in Spain, work in UK, some clarification please!

Originally Posted by Fred James View Post
All income earned in the UK will be taxed in the UK irrespective of tax residency. However, any tax paid can be offset against tax paid in Spain on the same income. The one major exception to that is pension income (so long as it is not a UK government pension), but even then you have to get HMRC to have it paid gross.
So (bear with me, my financial brain is not good!) one gets paid in the UK, tax/NI as normal, then one does a tax return in Spain declaring worldwide income and tax already paid, and the Spanish may take a bit more tax on top of what one already paid in the UK?

Thanks!
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Old Apr 8th 2017, 5:45 pm
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Default Re: Live in Spain, work in UK, some clarification please!

That's correct.
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Old Apr 8th 2017, 5:48 pm
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Default Re: Live in Spain, work in UK, some clarification please!

Originally Posted by Fred James View Post
That's correct.
Cheers Fred, much appreciated
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Old Apr 8th 2017, 6:54 pm
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Default Re: Live in Spain, work in UK, some clarification please!

Originally Posted by Pollyana View Post
Scenario would be:
  • wants to have permanent home in Spain, renting not buying

From what we have found, as he'd be spending over 183 days a year in Spain....
Just to add to what Fred has said, your friend would be considered tax resident in Spain even if he were to spend less than 183 days in the country. This is because his permanent home would be in Spain.
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Old Apr 8th 2017, 7:45 pm
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Default Re: Live in Spain, work in UK, some clarification please!

Originally Posted by teejaydee View Post
Just to add to what Fred has said, your friend would be considered tax resident in Spain even if he were to spend less than 183 days in the country. This is because his permanent home would be in Spain.
We did think that, but thanks for confirming it He'd definitely only have one 'proper' residence and that would be the Spanish one.
I'm glad we are thinking on the right lines, seems I have absorbed more than I realised from idly reading Spanish forum threads over the years!
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Old Apr 10th 2017, 11:23 am
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Default Re: Live in Spain, work in UK, some clarification please!

What work will you be doing in UK?


Will you be self employed or employed?


Having no fixed in UK abode may cause you problems


Many options but would suggest you speak to HMRC inland revenue in the first place and decide if you want to be resident in Spain or a none fiscal resident in Spain.
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Old Apr 10th 2017, 12:15 pm
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Default Re: Live in Spain, work in UK, some clarification please!

Originally Posted by Tadd1966 View Post
What work will you be doing in UK?


Will you be self employed or employed?


Having no fixed in UK abode may cause you problems


Many options but would suggest you speak to HMRC inland revenue in the first place and decide if you want to be resident in Spain or a none fiscal resident in Spain.
Workwise he is sorted. Staying in the same job he is in now, which is about 12 days a month, could be all in a row which woud make the travelling easier!
When in the UK he will be staying with friends in their spare room - he will be out most of the time doing long shifts. Its an address he can use as a UK contact if needed, but his aim is for the permanent base to be in Spain.
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Old Apr 10th 2017, 2:37 pm
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Default Re: Live in Spain, work in UK, some clarification please!

Will he be employed?


If so his employer will need to be clear on his residency for PAYE, NI and tax etc.
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Old Apr 10th 2017, 3:17 pm
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Default Re: Live in Spain, work in UK, some clarification please!

Originally Posted by Tadd1966 View Post
Will he be employed?


If so his employer will need to be clear on his residency for PAYE, NI and tax etc.
Yes, continuing in the same role he has now. And yes his employers are supportive and will be well aware of the tax situation once we have him sorted.

Where you mentioned before about being a 'none fiscal resident ' - we thought that as his home would be in Spain and he would spend most f his time there, that would make him a resident and liable to Spanish tax rules etc. We thought that he would only be a none fiscal resident if his home was elsewhere and he just spent some time, in Spain, or owned property there. He's planning on it being home.He just will have to leave occasionally to earn some money!!
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Old Apr 10th 2017, 3:54 pm
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Default Re: Live in Spain, work in UK, some clarification please!

Pollyana


There are a number of options and the 183 rule is not as black and white as some say there are other considerations and tests.


If he is Spanish resident and being employed by a UK company the UK employer may have to pay Spanish employer NI contributions etc. and he will have to pay Spanish NI and tax which will give him and his dependants healthcare in Spain


Do they have the facility to do this?


The alternative is remain a UK resident (use his friends address) and become a non fiscal resident of Spain (his dependants would qualify for health care under S1 but not him). Paying NI and taxes in UK not in Spain.


Other issues - driving licence, bank accounts, UK car (needs to be a UK resident to get car insurance from most insurance companies) in UK, etc


He can become a dual resident which would force a tax return to be done in UK and Spain and paying any differences due to Spain - no NI payment and no healthcare in Spain as he will be covered by NHS in UK only EHIC card and an annual travel insurance will help S1 will still apply for dependants


Strongly suggest he speaks to the HMRC inland revenue and they will advise the best way forward, then speak to an accountant\lawyer or the Spanish tax offcie in Spain to double check


For the S1 talk to DWP in Newcastle
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Old Apr 10th 2017, 5:30 pm
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Default Re: Live in Spain, work in UK, some clarification please!

Originally Posted by Tadd1966 View Post
Pollyana


There are a number of options and the 183 rule is not as black and white as some say there are other considerations and tests.


If he is Spanish resident and being employed by a UK company the UK employer may have to pay Spanish employer NI contributions etc. and he will have to pay Spanish NI and tax which will give him and his dependants healthcare in Spain


Do they have the facility to do this?


The alternative is remain a UK resident (use his friends address) and become a non fiscal resident of Spain (his dependants would qualify for health care under S1 but not him). Paying NI and taxes in UK not in Spain.


Other issues - driving licence, bank accounts, UK car (needs to be a UK resident to get car insurance from most insurance companies) in UK, etc


He can become a dual resident which would force a tax return to be done in UK and Spain and paying any differences due to Spain - no NI payment and no healthcare in Spain as he will be covered by NHS in UK only EHIC card and an annual travel insurance will help S1 will still apply for dependants


Strongly suggest he speaks to the HMRC inland revenue and they will advise the best way forward, then speak to an accountant\lawyer or the Spanish tax offcie in Spain to double check


For the S1 talk to DWP in Newcastle
That's how I understand it.

It's not as simple as just to say "any income earned in UK must be taxed there". Whilst this may be true, what about SS/NI payments? What about the fact that he's permanently resident elsewhere?


By-the-way, as he isn't resident in UK, how can he get an EHIC or is this based on where tax and NI are paid?
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Old Apr 10th 2017, 6:25 pm
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Default Re: Live in Spain, work in UK, some clarification please!

Originally Posted by snikpoh View Post
That's how I understand it.

It's not as simple as just to say "any income earned in UK must be taxed there". Whilst this may be true, what about SS/NI payments? What about the fact that he's permanently resident elsewhere?


By-the-way, as he isn't resident in UK, how can he get an EHIC or is this based on where tax and NI are paid?
The EHIC is the responsibility of the country where he pays Social Security / NI
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Old Apr 11th 2017, 11:14 am
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Default Re: Live in Spain, work in UK, some clarification please!

Originally Posted by Tadd1966 View Post
Pollyana


There are a number of options and the 183 rule is not as black and white as some say there are other considerations and tests.


If he is Spanish resident and being employed by a UK company the UK employer may have to pay Spanish employer NI contributions etc. and he will have to pay Spanish NI and tax which will give him and his dependants healthcare in Spain


Do they have the facility to do this?


The alternative is remain a UK resident (use his friends address) and become a non fiscal resident of Spain (his dependants would qualify for health care under S1 but not him). Paying NI and taxes in UK not in Spain.


Other issues - driving licence, bank accounts, UK car (needs to be a UK resident to get car insurance from most insurance companies) in UK, etc


He can become a dual resident which would force a tax return to be done in UK and Spain and paying any differences due to Spain - no NI payment and no healthcare in Spain as he will be covered by NHS in UK only EHIC card and an annual travel insurance will help S1 will still apply for dependants


Strongly suggest he speaks to the HMRC inland revenue and they will advise the best way forward, then speak to an accountant\lawyer or the Spanish tax offcie in Spain to double check


For the S1 talk to DWP in Newcastle
Sounds like being a non fiscal resident could be the way to go. I'd read some previous threads on commuting from Spain but they didn't mention that option.
No dependents, no car, no driving licence so at least it gets easy cos we can ignore all those! He would literally be renting a room/apartment somewhere with easy access to an airport and would be arriving with a couple of suitcases! Thats just the way he lives, wish i could do the same but I have a more practical head,which is why its me sorting out al these complexities!

Thanks heaps guys, you are being really helpful
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