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Trying to choose where to become a resident - UK or Spain!

Trying to choose where to become a resident - UK or Spain!

Old Aug 14th 2017, 11:08 pm
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Smile Trying to choose where to become a resident - UK or Spain!

Hello - I'm new to this site. I am Canadian with dual British nationality. Trying to figure out where to become a tax resident - UK or Spain. I recently sold my house in Canada and bought in Casares, maybe I am completely mad! Or maybe I was having a reckless moment but here I find myself with the keys this week and wondering whether I should stay on in the UK as a TAX resident (have friends I can stay with here) and stay as a Spanish non resident for now. I work for a Canadian company (mine) so that should not influence the situation either way.

Has anyone purchased a property in Spain and decided to stay as a non resident to avoid the higher tax rates in Spain?

I have a lot of questions about how to cope with my new life in Spain especially since I chose an area with little English. I am probably quite mad and will need some friends to help me cope.
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Old Aug 14th 2017, 11:40 pm
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Default Re: Trying to choose where to become a resident - UK or Spain!

You don't have a choice. If you spend more than 183 days in Spain in one calendar year you are deemed to be tax resident.
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Old Aug 15th 2017, 12:07 am
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Default Re: Trying to choose where to become a resident - UK or Spain!

Originally Posted by kdpunshon
Hello - I'm new to this site. I am Canadian with dual British nationality. Trying to figure out where to become a tax resident - UK or Spain. I recently sold my house in Canada and bought in Casares, maybe I am completely mad! Or maybe I was having a reckless moment but here I find myself with the keys this week and wondering whether I should stay on in the UK as a TAX resident (have friends I can stay with here) and stay as a Spanish non resident for now. I work for a Canadian company (mine) so that should not influence the situation either way.

Has anyone purchased a property in Spain and decided to stay as a non resident to avoid the higher tax rates in Spain?

I have a lot of questions about how to cope with my new life in Spain especially since I chose an area with little English. I am probably quite mad and will need some friends to help me cope.
Hi and a warm welcome to the Spanish forum on BE. Myself and Fred James are the moderators for the Spanish forums whilst BEVS moderates Europe. Moderators are there to ensure that the site runs smoothly within the rules of BE. This is so that members gain the information that they are looking for and find their experiences on the forums to be friendly and worthwhile.

Problems and complaints should always be addressed to a moderator who will look into the matter and deal with it efficiently and fairly. Our members who post in the Spain Forums are usually friendly and helpful with a wealth of knowledge about the issues of living in Spain. I hope that you enjoy your time participating in the forums.

Please let me know if you need any further help.

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Old Aug 15th 2017, 2:02 am
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Default Re: Trying to choose where to become a resident - UK or Spain!

Yes, yes I understand the residency rules. The question is whether anyone has made a comparison in terms of tax liabilities and other financial reasons. I can choose which country to be classed as a resident in and wonder if others have gone through the process and can provide their thoughts. Thank you.
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Old Aug 15th 2017, 2:57 am
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Default Re: Trying to choose where to become a resident - UK or Spain!

Question, how can you choose? You either live in a place or you don't. It's a different story if you register a business but if you are living in Spain permanently you are tax resident in Spain: Here also the rules for UK.




Work out your residence status

Whether you’re UK resident usually depends on how many days you spend in the UK in the tax year (6 April to 5 April the following year).
You’re automatically resident if either:
  • you spent 183 or more days in the UK in the tax year
  • your only home was in the UK - you must have owned, rented or lived in it for at least 91 days in total - and you spent at least 30 days there in the tax year
You’re automatically non-resident if either:
  • you spent fewer than 16 days in the UK (or 46 days if you haven’t been classed as UK resident for the 3 previous tax years)
  • you work abroad full-time (averaging at least 35 hours a week) and spent fewer than 91 days in the UK, of which no more than 30 were spent working
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Old Aug 15th 2017, 3:15 am
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Default Re: Trying to choose where to become a resident - UK or Spain!

Originally Posted by kdpunshon
Yes, yes I understand the residency rules. The question is whether anyone has made a comparison in terms of tax liabilities and other financial reasons. I can choose which country to be classed as a resident in and wonder if others have gone through the process and can provide their thoughts. Thank you.
So by choice, do you mean that you will choose to spend less than 183 days in Spain?

It's impossible to compare the two tax systems as it will depend on your personal circumstances. For example, I pay far less tax in Spain that I would in the UK but my wife pays far more.
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Old Aug 15th 2017, 3:16 am
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Default Re: Trying to choose where to become a resident - UK or Spain!

Originally Posted by Fred James
You don't have a choice. .....
Originally Posted by Moses2013
Question, how can you choose? You either live in a place or you don't. ....
By choosing where you spend your time - wealthy people often do it, and documenting days spent in different places becomes a really big deal. If you spend most of your time split fairly evenly between country A and country B, then if you spend two months each year traveling on business to several countries and another month on holiday in one or more countries, then it is quite easy to arrange your affairs so that you are taxed in either country A or country B, so long as you don't meet the mandatory residency requirement for either one.
Originally Posted by Fred James
..... For example, I pay far less tax in Spain that I would in the UK but my wife pays far more.
But I think that is exactly what he/she is asking - why you pay more in one country that the other.

Last edited by Pulaski; Aug 15th 2017 at 3:30 am.
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Old Aug 15th 2017, 3:16 am
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Default Re: Trying to choose where to become a resident - UK or Spain!

Remember that you will have to pay non-resident tax on your house in Spain.

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Old Aug 15th 2017, 3:20 am
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Default Re: Trying to choose where to become a resident - UK or Spain!

Originally Posted by Pulaski
By choosing where you spend your time - wealthy people often do it, and documenting days spent in different places become a really big deal. If you spend most of your time in either country A or country B, then if you spend two months each year traveling on business to several countries and another month on holiday in one or more countries, then it is quite easy to arrange your affairs so that you are taxed in either country A or country B, so long as you don't meet the mandatory residency requirement for either one.

But I think that is exactly what she's asking - why you pay more in one country that the other.
I know that and it's not just wealthy people. As you say, meet the requirements. If you don't meet the requirements, you can't choose.
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Old Aug 15th 2017, 3:21 am
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Default Re: Trying to choose where to become a resident - UK or Spain!

Very true, but the Spanish tax law will also deem you resident if your center of interests is in Spain, irrespective of how long you spend there. If your family lives permanently in Spain, you work abroad so don't meet the 183 day rule, you will still be deemed tax resident in Spain unless another country has a better claim on you.

The one thing that is very difficult to achieve is to be a tax nomad and not be resident anywhere.

Also one thing that many forget is that in most countries, almost all income arising in that country is taxed in that country irrespective of tax residency in that country.
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Old Aug 15th 2017, 3:28 am
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Default Re: Trying to choose where to become a resident - UK or Spain!

Originally Posted by Fred James
..... The one thing that is very difficult to achieve is to be a tax nomad and not be resident anywhere. ....
Agreed, but without family/children, or if you send your children to boarding school, it is actually fairly easy to be a tax nomad who chooses where to be tax resident - this is pretty much why/how so many wealthy people choose to "live" in Monaco. In practice, and also during races , they spend much of the year in various countries around the world, but are still tax resident in Monaco.

Last edited by Pulaski; Aug 15th 2017 at 3:38 am.
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Old Aug 15th 2017, 3:32 am
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Default Re: Trying to choose where to become a resident - UK or Spain!

I should have qualified my statement with the fact that "unless you are seriously wealthy"!!
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Old Aug 15th 2017, 4:42 am
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Default Re: Trying to choose where to become a resident - UK or Spain!

I have the same dilema at the moment. I've recently returned to make Spain my base. I have my own apartment here but I travel a lot so its very easy to be in Spain less than 183 days. I'm coming down on the side of retaining my tax residency of Australia. It would be less complicated, and there'd be less tax to pay. And I'm not a wealthy man, by any means! Living on a reasonable UK pension.
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Old Aug 15th 2017, 8:53 pm
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Default Re: Trying to choose where to become a resident - UK or Spain!

Hello all, interesting discussion and why I posted this. SteveDW - you sound like me. Definitely not wealthy but in a position to more or less choose where to be classed as a tax paying resident. I have to check with tax accountants in the UK and Spain, which I will be doing. I know I have to pay property tax on my home in Spain but given that my company is Canadian based and clients are global (not specifically anywhere). I believe, since the personal allowance is much lower in Spain, that Spain would be more expensive personal tax wise. If ONLY we could be "tax nomads" - that sounds like a perfect goal to pursue. Ha ha.. Thanks again for all the feedback.
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Old Aug 15th 2017, 9:42 pm
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Default Re: Trying to choose where to become a resident - UK or Spain!

When I was looking into moving to Spain, I came across the possibility of having to pay capital gains tax on the "profit" of the sale of my home in the UK, if I became tax resident at the wrong time.

As you have recently sold your home in Canada, something worth checking on.
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