EMR

There is no such thing as tax free status, one country or another will expect its share.
If you spend 90 days a year ( average over 3 years ) in the UK then you are automatically UK tax resident.

Fred James

It is perfectly possible but rather difficult.

As for the 90 day rule, that has been changed. You can be tax resident after only 16 days under certain circumstances and also can stay more than 90 days in some cases without being resident. Yes, 90 days for 3 years is a problem but those are not the circumstances we are talking about.

If you have a couple of hours to waste, read the link I posted. Warning - you will probably end up with a severe headache

Mitzyboy

That would be a nightmare though wouldn't it ..... 90 days (or 16) in the UK as a UK tax resident and then you spend the rest in Spain which would mean you were a Spanish tax resident ...... That would certainly give me a headache Fred

EMR

My OH is a compliance officer with HSBC and deals with the cases like this every week, expats in dubai etc.
HMRC is making it harder and harder to live out of the UK and avoid tax.

CapnBilly

I have read it a few times, and I did get a headache.

I agree its extremely complicated. You literally have to read it for every situation.

Mitzyboy

How can they do that though, if you live in Spain three quarters of the year then you pay your taxes in Spain, even if you are in the Uk for the other quarter

EMR

The target is those who try to avoid being tax resident anywhere.

CapnBilly

Quite right too

EsuriJohn

Fred you say the rules have changed. You have given a link to new HMRC pages. Has the proposal turned to fact and from what date will it be applicable in Spain if you are tax resident in Spain? Will the first return under the new rules be July 2014?

guirijohn

Interesting case in the UK that says obligatory online filing breaches human rights. Who is volunteering to tell Spain that their declaration of assets breaches EU law?

"In a ground-breaking decision, the judge held that the regulations which required online filing of VAT returns without providing exemptions for older people, those with disabilities or those living in parts of the country too remote for broadband access, were in breach of the appellants’ human rights and were unlawful under EU law."

http://www.ion.icaew.com/TaxFaculty/....bfvCzkWE.dpuf

Fred James

As far as I know it came into effect in April 2013.

It is not applicable in Spain as such apart from the situation where under the new rules you are deemed tax resident in both countries. In that case the tie breaker rules laid down in the DTT would apply to determine which country you are tax resident in.

If, as a result of the changes you were now considered tax resident in the UK for 2013/4 instead of Spain then you would not then be tax resident in Spain and would not need to submit a return for 2013 next year.

However there might be complications about the first 3 months of the year due to the differing tax years. I have no idea how they would sort that out!

frigilianafreddy

Oh come on now, boys and girls, no one actually declares they''re tax resident in spain do they? In my village i'd say its about 5% who do that.

And the other 95% (especially if they rent) aint never get get caught.

Spanish tax is entirely voluntary and thus not declared accurately by 95% of the people.

It's the UK taxman you gotta fear. He's ever so slightly better than the pen pushers at Hacienda.

Fred James

You're quite right - it is a voluntary system unless you are employed or autonomo.

Apart from those two situations it's a self declaration system which you can ignore if you wish.

However if you get caught out the fines can be pretty spectacular but there is no real evidence that Hacienda are catching anyone apart from a few high profile criminals. Let's face it they can't even be bothered to catch the obvious foreign registered cars which would generate huge amounts in taxes if they could not be bothered doing anything about it.

But, as far as this forum is concerned all we can do is tell everyone what the legal situation is - what individuals choose to do is their own affair and no doubt many will go their own way and ignore the rules - that's up to them.

jago25_98

My workplace are insisting that by flying me to Spain instead of the UK they will respond to questions of "where do I live?" with "Spain".

My concern is that because I have no bills anywhere, no car and no home, that I would be unable to prove links to the UK to maintain my domincile to the UK.

I wish to remain tax dominciled to the UK. What steps can I take to ensure to assist me should the tax man cometh? One thing for sure is that I'm not going to buy any property in Spain now and won't register for an N.I.E either. Is there anything else I can do like sign up for a UK phone bill?

Kezar

has anyone considered or have set up a UK company to try and mitigate the IHT and CGT Spanish tax rules?