bobd22

Snap and that's only of course if the lid closes fully or it is left , nice pictures by the way

Fred James

No it is not a new rule but it is certainly not one that most people are aware of. I wasn't aware of it until I was looking closely at the asset declaration law and looked at the wealth tax laws.

I am now 100% certain that it applies based on information I have read from a totally reliable source.

It is usually not a huge amount of money unless you have recently bought an expensive UK property but it is significant and they could ask for you to pay the last four years taxes plus any fines for non declaration.

Unfortunately it is very easy for Hacienda to cross reference your property as declared on the asset declaration with your previous tax returns.

Whether they are bright enough to do this remains to be seen.

There are three choices.

Declare the last four years and pay the tax and fines.

Just declare the imputed income for last year and hope that that is enough.

Do nothing and hope you don't get a tax demand in future.

Personally I would take the second option.

bobd22

Cheers Fred not a problem at the minute for me as living in UK and paying non residents tax in Spain I feel it will stay that way for some time now until I see the wood from the trees as to what is happening.

bobd22

Fred don't know if you will know the answer to this one but if next year I should move to Spain full time and become resident but my wife stays in the UK due to work and obviously occupies our property in the UK visiting me as and when until she retires. How would that affect the status of both properties and payment of this non resident tax? Strange one I know but it is one of our considerations as I am now retired.

Fred James

Assuming you own the property in the UK jointly then if you were tax resident you would have to pay tax on half the value.

However the tax rules say that if you are tax resident in Spain then your wife, although not meeting the 183 day rule, would also be deemed tax resident in Spain.

bobd22

Cheers Fred gets more and more bizarre

Fred James

If you think that is bizarre you should check out the UK tax residency rules!

bobd22

I have no doubt Fred

bobd22

Looks like holiday home it is then

bobd22

Just re the point about as I would be tax resident my wife would also be although not there and working in UK. Given that why can I not turn the tables around and as my wife is in the UK in our property, also I as Government pensioner I must pay my tax to UK? Surely if it works one way it must work the other or am I missing something?

Fred James

It is very complicated to establish exactly in which country you are resident in the circumstances you describe.

If you spend more than 183 days in Spain and less than 90 in the UK you will almost certainly be classed as resident in Spain. It is your wife's tax residency that is at issue as she is clearly UK tax resident, but also could be deemed Spanish resident under the spouse rules.

However when someone is dual resident then it has to be sorted out as you cannot actually be tax resident in both countries. That would be determined by establishing where her centre of personal and economic interests were the strongest and that would be decided by the two tax authorities making an agreed decision on it.

Your income and hers will be taxed in the UK irrespective of tax residency as it arises in the UK.

There is provision in the tax treaty for some UK generated income to be taxed only in the country of residence but that only applies to pensions, interest and royalties. Government pensions are specifically excepted from this arrangement but also under the agreement cannot be taxed in Spain under the usual "worldwide income" rule.

bobd22

Cheers again Fred for the comprehensive answer to be honest the 90 days in UK may well fit in my plans until the wife retires. I am trying to explore my options. Thanks again.