Rosemary

Your family will be living here, therefore your main residence will be in Spain so you will be tax resident here even if you plan not to be physically here much of the time. There are a lot of people whose families live in Spain whilst they work away so it is worth doing a search on the forum to gain clarity.

Rosemary

cricketman

They will really need to speak Spanish and Valenciano then

Many international schools really are not part of Spanish society, so you get no links to sports clubs, events or anything

The two posters here say that they want to move to Valencia so their family experiences Valencian culture, but then want to have English speaking neighbours and an English speaking school

If you do that then you will just be living a Briitsh life in the sun. It will be very difficult for your children to make non-English speaking friends and frankly, you won't be experiencing much "culture" anyway

Horlics

Regarding tax.

Somewhere is going to count as your domicile and that is where you will pay tax. A few years ago the UK authorities introduced the 'centre of life' test to apply to those who were spending a lot of time roaming around several countries. What this means is that if you spend time in more than one country without either/any being visited much more than others, it is where your family lives that counts.

In the case of paulmg and this:

1. UK tax, i work out of Europe for over half the year, and by spending less than 90 days in the Uk I would not have to pay full UK tax.

To avoid UK tax in these circumstances you would have to prove that your are a resident elsewhere, i.e. that you are domiciled in a country other than the UK. That usually means showing a long-term uninterrupted home rental agreement for another country. Even if you spend fewer than 90 days in the UK, if those 90 are made up of 2 days every weekend to visit your wife and kids, then the UK will consider you domiciled there and will tax you.

As a UK citizen there are two ways to avoid tax altogether:

1. Give up work
2. Move to and live in a country that doesn't apply tax to earnings.

In the case of 2, there isn't one of those in Europe.

cricketman

Yes good point

If your family live full time in Spain then most likely that hacienda would rule that you would need to declare all your income in Spain, whether you personally were there or not

After all, it is family income which they are living off

Horlics

Hi Davie,

I'm in Xabia right now.

As I said, there are those who think the 9 year old is just young enough to make a go of a Spanish state school but it’s borderline, you’re probably doing the right thing by choosing an International school for that one. The other, at 3 years old, would do better in the long run in the state system. She would learn both Valenciano and Castellano (Spanish) and would mix with local kids, which would also be your route for getting to know local people and the culture and customs. I think it would make an enormous difference to how you as a family live your lives.

Xabia has 3 areas, Arenal, the Port and the Pueblo (old town). It’s on the coast yet does not suffer massive overbuilding and high-rise development like other places have. It has some great amenities all packed fairly close together, e.g. the municipal sports centre is a 1 minute walk from the beach. The Arenal is quiet in winter and has a tourist feel to it. The Port and Pueblo both have a quite Spanish feel to them. It’s still possible to find places where menus are in Spanish and where not all people speak English. That said, there are a lot of Brits and other nationalities here. According to the latest town hall report that are over 6,000 Brits in a population of about 33,000. Xabia actually feels more Spanish during the holidays when the people from Madrid and Valencia swell the numbers to 130,000. This week, for example, it feels like a very Spanish resort, because it’s full of people from Madrid.

Will you be selling a home in the UK and throwing yourselves at this, or keeping an exit route open? There are different approaches based on your plans, with a view to minimising tax burdens.

Davie fae the broch

Thanks again for the helpful advice.
The plan was to rent out my home in the UK, that way as you say it keeps an exit route open. I plan to head over in August maybe September for a holiday which would take in the town and nearby areas and look at property and prices ( rental ) The idea would be to possibly rent for a year to give us time to really settle in and if we were sure that this is where we would want to stay then we would look to buy a house there.

I would definitely put my son to an international school as this would be unfair to throw him to a new environment, new people and not be able to communicate at first.

I have a global contract which I get paid from Houston so there would be no tax to be paid in the UK, however if I am out of Spain more than 183 days does this not qualify me for tax exemption??.

There seems to be quite a difference in the rental prices. Any areas of the town I should avoid?

Thanks
Davie

cricketman

Not if your family are living full time in Spain

Horlics

On the UK house. It's OK keeping it as an exit route, but be aware that once you and your family live in Spain, the Spanish tax people will regard your Spanish home as your main residence and will apply capital gains tax on the sale of any other properties. So, if you sell your UK house for more than you bought it for, at some point in the future, you'll lose a chunk of that difference in tax.

I'm a bit confused about your current tax arrangements. I worked for a US company in a global role that had me in and out of the UK many times a year, but I was paid through a UK subsidiary. The company offered to pay me wherever I wanted to be paid but the UK tax people made it clear I would still be taxed in the UK because that's where my centre of life was (my family lived there and everywhere I stayed regardless of how long was always in temporary accommodation).

Are you currently paid in US dollars in a US bank account and then transferring that money into the UK. Have you at any time filled out the form P85?

As for rental prices, you'll find properties with expat appeal are always a bit higher, e.g. those with a pool, located next to the sea, and so on. I really don't like Arenal much, it has the look of a place that'll be nice when it's finished and it's a bit run down in places. And, it's dead in winter.

I would recommend the port or the old town if you want to be close to shops and facilities, like the open air football complex and the municipal sports centre. If you don't mind driving to places every time you want something then there are plenty of nice villas (chalets as the Spanish here call them) up on Balcon del Mar, but again, quiet out of season.

I'm not mentioning any of the inland places because you said you wanted to be near the coast, but let me know if you'd consider nearby towns. Benissa, Teulada, Benitachell, Gata, Jesus Pobre are all close by.

There are some nice chalets along the CV-735 which is the Carretera de Jesus Pobre running out the back of Javea and skirting to bottom of Montgo.

Oh, and south facing, every time. Important in winter.

Feel free to PM me with questions about any specific places you see.

davidinspain

You'll also be liable for yearly tax on your UK property and any savings.....sadly

Davie fae the broch

Thanks again Horlics, as for my pay... I get paid in USD direct into my bank account which converts the figure into pounds. I am dealing with an accountant at the moment and it looks like i will be paying full tax for the previous tax year. I am based in Cameroon on a 4/4 rotation. I have a colleague who lives just north of Benidorm who is of dutch nationality and he pays 0 tax which was why I mentioned this and he also has family who live there permanently.

I will check out those places you suggested and thanks for that. Any rental agent companies you would recommend?, I guess this is not so important as I am not buying however I do not want to be ripped off with the rental fees.

May i ask where you live yourself and how you find life in Spain? Are you glad you made the move?

I must admit i am really excited at the prospect of moving there, my wife has taken a bit of convincing but ive warned her i am taking the kids and leaving her at home and she is beginning to come round to the idea.....

Thanks
Davie

snikpoh

Paying 0 tax and being tax resident are really two different things.

You WILL be tax resident as discussed but you may have zero tax to pay if you've already paid tax elsewhere. You WILL need to submit a tax return which I'm sure is what your Dutch friend does. (If he doesn't, then he's breaking the law)

Horlics

If you are 4 weeks (?) on and then 4 off, and then you go back to the UK which is also where your family lives, then the UK is going to regard the UK as your home. Also, and this is a very important point, if you ever want to leave the UK, as in claim that you live elsewhere and intend to pay tax elsewhere, then you have to fill in a form, number P85. It's a good step to take because the tax office will stop chasing you for tax returns and will confirm that what you're intending to do does in fact make you exempt.

I had a quick look at the regulations (for 2013/14 - the latest I could find) for Cameroon and it's left me a bit confused. It says that Cameroon will tax you on earnings made there regardless of where you are from or live. In other words, they want their chunk and don't let you simply off-shore all your earnings. That's usually OK because countries have tax treaties which mean they recognise that you have been taxed once and don't tax you again.

The trouble is, as far as I can see, there isn't a such a treaty between Cameroon and either the UK or Spain. What this means is that the UK could, if they wanted, tax you a second time, this time on what's left of your income after Cameroon have had their bit.

That might be what your accountant is telling you, i.e. that you are going to be taxed on the money that was delivered to your account from Cameroon, even though according to documents I read, Cameroon will have taxed you already. Do you know if what your company puts into your bank account has already been taxed in Cameroon?

I didn't expect to find that there is no treaty between Cameroon and Spain because I thought your colleague in Spain (the dutch guy) was being taxed 0 in Spain because they were taking into account that he'd already been taxed in Cameroon. But, without a treaty in place, they need not grant him that concession although it appears that's what they are doing. If, of course, he's being above board about all this.

Rental companies. Check out Eurojavea and Hamiltons. Eurojavea are good and have a good website.

I live in Xabia in the port. Well, I haven't made the move full time yet but I spend just about every day I am allowed up to the residency limit. I do own my own home here.

Although not here full time, I do know a lot about the place. I have some locals for friends so I get a lot of what I know about how the place works from them.

As for how is life, I love it here. I have been to all corners of Spain and a lot of what's between them over the past decade or more so I feel comfortable here now. I like the Spanish people and I like the way of life, which is more sociable and community-minded than where I lived in the UK. And of course a major factor, the weather. I spend more time outdoors than I did in the UK and I am generally more active here. Life in the UK involves too much time locking ourselves in small boxes away from the elements and every social occasion seems to involve downing beers. It's different here.

If your wife is even slightly reluctant then Xabia and places like it are best for you, in that there are English speaking people here. I would have been happy inland with a large parcela of land in a more remote community, but that's because I can speak enough Spanish to socialise. My wife wouldn't have been happy in such a place because she has only just started learning.

That said, to really enjoy this place and fit in, you need to speak Spanish. If you're not already learning, why not! :-)

davidinspain

I always find these types of threads quite amusing.People want to enjoy their lives in a country,but pay nothing (or as little as possible to it's upkeep).In the case that for some reason you'd need to call the police,you'd want them to attend,but the rest of us pay for your privileged.You'll need to face the fact that as an employee you'll have to pay.Now the day you own your own multi-national,bank with HSBC in Switzerland,pay your donation to the political party of your choice and Bingo job done!

Horlics

Dave,

The guy's trying to work out what tax he needs to pay and where he is going to have to pay it. There's nothing wrong with that.

davidinspain

" I have a colleague who lives just north of Benidorm who is of dutch nationality and he pays 0 tax which was why I mentioned this and he also has family who live there permanently"
"I have a global contract which I get paid from Houston so there would be no tax to be paid in the UK, however if I am out of Spain more than 183 days does this not qualify me for tax exemption??."