ug94bxs

Hello



I wonder if someone can help me with a tax question. I have been doing some research and found mixed signals concerning Spanish tax due on UK assets.



I intend to move to Murcia over the summer with my wife (from Murcia) and our two daughters. I intend to register as a resident as I will be staying in Murcia at least 9 months of the year and 3 months back in the UK.



I will continue to work for a UK company remotely in Spain and pay my UK taxes.



Income Tax: I have worked out I will need to pay an additional £3500 in income tax in Spain as the income tax rate is higher than in the UK.



The bit I am confused with is declaring my worldwide income to Spain. I have assets in the UK above the 50k limit in all categories and cannot understand how Spain calculates the tax due. e.g. I have the following



ISA

SIPP

P2P

Cash in Bank



For the ISA/SIPP how do they calculate the 'gain'? I am mid 30's and cannot touch the pension and I never withdraw from the ISA's. Do they just calculate the increase in value every year and then apply their income tax? As there is no tax in the UK for SIPPS/ISA at this point in my life I would have to pay the full Spanish income tax on the gains



For the P2P/cash intrest, I assume I can offset the UK tax with what's owed in Spain and pay the difference as I am doing with my PAYE income?



Thanks

EuroTrash

You may continue to work for a UK coimpany remotely in Spain but that doesn't mean you continue to pay your tax in the UK. Your company can't just keep you on the payroll and carry on deducting NICs and PAYE as if you were still UK resident.

snikpoh

OK - my input -

There is no tax to pay on assets. What you are describing is just a declaration of assets over 50k in a particular asset class. There is only tax on any income drawn from the assets. UNLESS, your overall wealth is over (about) 700k This amount varies by region.

I am unsure about offsetting any tax paid in UK once you are a Spanish tax resident - my view is that ALL the tax should be paid in Spain (other than earned income).

I am not truly clear on this so would advise speaking to an international tax specialist

spainrico

This might help

https://www.gov.uk/guidance/living-i...#money-and-tax

chrisjolly

Hacienda only want to know your worldwide assets which you declare in January. Any tax is paid from your income ie interest on savings etc, work and rental income. Its up to you to declare what you have earned. The two forms are different and done at different times of the year and dont forget that the tax year in Spain is always a year behind and goes from January to December unlike the UK where it is April.

britishbull

Whilst you will be able to keep your UK SIPP and ISA you will not be able to make any new contributions and Spain will treat them as taxable re dividends or any capital gain made, not sure if they tax you even if you don't sell the shares (ie if declared capital increases between reporting dates), though - anything is possible in Spain, they are rapacious re tax.

chopera

If the ISA/SIPP are invested in funds with dynamic portfolios, such as index trackers, it might be best to freeze them. Even if you stop paying into those funds, the funds themselves often buy and sell shares within the ISA/SIPP tax wrapper in order to track an index, etc. This could potentially bring up complications with the Spanish taxman, since the tax wrapper wouldn't be recognised by Spain.

ug94bxs

Thanks, I very confusing as I just do not understand how they calculate the tax in Spain (my wife is Spanish and I know how much they love paperwork).

Also getting alot of conflicting information that SIPPS are not taxed at all in spain but ISA's are.

bolton wanderer

I would recommend getting professional advice. The amount of tax you'll potentially pay in Spain will be probably be higher than what you pay in the UK, unless you're a pensioner with limited savings. The personal tax allowances for Spain are lower than those of the UK, ISAs are not tax free, UK pension tax free lump sums are not tax free in Spain and there is no tax free allowance for dividend or savings in Spain.

There's plenty of information/adverts available from the web and you'll need to check the source. You'll definitely need professional advice regarding your Sipp and I would trust this over any opinions from a forum, even a good one like this one. Do your research before accepting any advice and committing yourself.

A couple of examples of info' from the web which may initially help (not official sources, just examples)....Mods please delete if inappropriate
https://www.blevinsfranks.com/news/a...atriates-Spain
https://www.expertsforexpats.com/exp...in-for-expats/
https://blog.abacoadvisers.com/taxes-in-spain/

Patrick2976

Your SIPP is a pension and as such is not subject to Spanish tax on any year on year gains. Obviously you cannot access benefits until you are 55 and at that point drawdown will be taxed as income if you are still resident in Spain (and/or the rules haven't changed here by then). Your ISA would not be recognised for any tax benefits in Spain and would be taxed on any capital gains each year.