frigilianafreddy

Where you live is irrelevant to the issue of "domicile". HMRC will consider you domiciled in the UK unless you have no ties at all with the place. So even Branson who has lived in Caribbean for 6 years is considered domiciled in the UK and pays UK tax on any income generated in the Uk. His place of tax residency (in this case Necker island) levies no tax on his worldwide income.

Where you are tax resident is not up to choice. If you are in spain over 183 days you are tax resident in Spain and if on a payoll will be liable for Spanish tax on worldwide income and investments. However you remain domiciled in the UK and need to declare UK earnings and investments annually to HMRC.

If you are tax resident in Spain you can no longer buy ISAs and the income from ISAs is taxed in Spain.

If your empoler places you in Spain for over 183 days you are tax resident in Spain and can do nothing about it. You can only get around this by proving (and the onus of proof is on you ) that you have spent less than 183 days in Spain.

jago25_98

Ah thanks buddy, that's what I need. I'm probably in Spain less than 3 months in the year and have the docs from working at sea to prove it so I'll make sure I keep a record of that now, good to know. That said, I still don't feel secure because of this to buy a house or even register for an N.I.E...

Regards UK residency have a read of:
http://www.hmrc.gov.uk/international/rdr3.pdf
Which is fairly new. The only one that I fail on is that I haven't yet transferred over to another countries tax system, that's the one for catching travelling gap year workers I suppose. The other one I guess I would have to prove would be showing that my parents won't let me stay at their house somehow. Personally I've decided to stick with paying UK tax because:
- HMRC are a nightmare but there are plenty of tax systems out there so much worse
- the rate isn't that bad... yet
- the system is a lot less bureaucratic than a lot of places, you can file online
- better the devil you know
- easier to keep things constant

Regards the comment that tax regimes are not an open market. I understand the point of view but unless you're living in Belarus or North Korea I don't think the argument is water tight. Governments may try their best to be anti-competitive but at the end of the day dual taxation treaties are there to support us all and support the market which keeps governments in check. It is possible to move to Scandinavia and pay a higher rate if you feel you're going to get better value for money. Conversely, you can also move to lower tax regimes who are going out of their way to attract your finances. If it goes the way of the USA with bills for renouncing citizenship and blocks on re-entry, that historically doesn't last for long.

I think it's not just UK labourers struggling with globalisation. It's governments too. Hopefully tax systems will evolve so that people are beginning to pay for what is used rather than enforcement via redundant inflexible notions of patriotism.

Neptuno

Yes, one particular firm advertises in the ex pat press every week. You can bet your life it's not as simple as it appears, and there are costs involved;I don't think it would be suitable for Mr and Mrs average ex pat. It might be worth it for the very wealthy.

Neptuno

Give me the UK taxman every time! Voluntary tax? surely it is a legal liability?Thanks to some people like you describe in your village, people like me who do have scruples end up paying MORE tax! What happens to such people when they sell a house, or deal with IHT? Don't tell me, they don't register the death, and after 4 1/2 years the taxman can't do anything, right?

Lynn R

It's perfectly possible to obtain an NIE without registering for residency - everyone who buys a property for use as a second home would need to do so, for example. If wanting to rent a property long term (even though you wouldn't be living in it for most of the year), I'm pretty sure you need to supply one, and although some people have said they were able to open a non-resident bank account with just a passport, it's more usual for an NIE to be required as well. Same for a lot of purchases - if you want a Spanish mobile phone, for example, even a PAYG one, for use whilst you're in Spain, it has to be registered to you (anti-terrorist measure) and you have to supply your NIE.

frigilianafreddy

No. Wrong!

There is no statute of limitation on fraud.

Neptuno

So why do some people think it's an ok thing to do?

cricketman

Because they think they are clever and above the law

Only time can tell whether they are right

Lynn R

Many Spanish families (at least here in Andalucia, it may not be so in other areas) don't officially claim their inheritance, especially property, when a relative dies, so as to avoid paying the succession tax. If that happens, the family who inherit still have use of the asset, namely the house, but can never sell it. That doesn't appear to bother them, either a family member moves into the house or it remains empty. But that, as you have said, doesn't normally suit the circumstances of expat owners whose heirs would usually want to be able to sell, and in order to do that they have to pay the tax first.

The cash, of course, only has to be removed from under the mattress and shared out!

frigilianafreddy

You have no choice.

The death has to be declared and the beneficiaries (whether it is through the will or the intestate law) are then invoiced for the tax which has to be paid. And you have to pay before you can sell the property.

If you have neither the ability to pay or the ability to raise a loan the property is embargoed and all proceeds go to Hacienda.

You can decide not to inherit and in this case the property reverts to Hacienda who sell it and retain all proceeds.

The only way someone can do what you suggest is if they do not "properly" declare the death.

sam54140

is the correct current tax levels and % in Spain right now ? is there a double taxation on capital gains being income ? (that would be insane and illegal).
http://www.spainaccountants.com/rates.html

as for the euro, don't be surprised the southern States leave it one by one
within 1-3years. devaluations would take a whole year to reach bottom.(remember Argentina, in the end,lost 80%).
i guess if living in Spain it's wise to not hold too many euros in a Spanish bank but rather various currencies in a non Spanish bank.

me me

A bit tricky to do that.

Some Polish people tried that in a UK airport:

http://www.jaunted.com/story/2010/4/...EasyJet+Flight

It is not easy to avoid declaring a death, even if you use the service of a taxidemist, there are still some signs that the person is dead

Lynn R

I may be completely wrong but that is exactly what appears to happen in many cases - there are three houses within a stone's throw of mine which have never been lived in since the previous owner died (and I'm talking years ago, not months). All belong to local families who come along regularly and clean, maintain and check on them. I know that such things as utility bills are still in the name of the original owner, because sometimes they get put in our postbox by mistake. Surely, if ownership of the property could have been transferred because the tax had been paid, they would have preferred to sell them to realise their value? As it is, the IBI and utility standing charges still have to be paid every year.

I know all about how the system works because a close fried of ours died two and a half years ago, and his sister (his closest relative) inherited the house. He was (genuinely) not resident in Spain so she has only had to pay inheritance tax on his assets in Spain, the house and a bank account, not his UK assets as well. But she certainly had to pay the tax (which was higher than it would have been for a closer relative like a child) before the deed of inheritance could be notarised.

I also know someone whose wife died earlier this year, and he has not had to pay any inheritance tax, presumably because their assets were jointly owned, and therefore his wife's share which passed to him would have been less than €175,000, and his own personal wealth under the €402,000 limit.

jackytoo

I know in theory that inheritance tax must be paid before sale but there are discrepancies. We bought a house in Spain from a Dutch woman. Her Husband had died a few years previously. There was an embargo on the house for the tax amount which we with-held. I felt sorry for her she only received about a third of the sale price.

My cousins and myself inherited a Spanish house from an Aunt. This was after the crash began. None of us was willing to put up the large amount required for tax. It was all worked out as a package by the Lawyer and we received our pittance

I stand corrected but I think you are also not allowed to borrow the tax required amount from a bank to pay. So, how do they expect people to raise these large amounts to pay it without a sale

Fred James

Yes those rates are correct.

Capital gains in the same year as purchase are considered to be income otherwise they are taxed as a capital gain.