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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 16th 2017, 1:53 am
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Default Re: Trying to choose where to become a resident - UK or Spain!

Originally Posted by Lincoln45
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.
WOW, now that is worth checking on. Thanks Lincoln. Spain seems like a tax hungry country. Well ....which western country isnt but Spain seems particularly bad. I presume they have sunshine to sell and they take advantage of that. But my curiosity is what do they do with all the tax funds? I dont believe they have the social system of the UK. Can anyone share thoughts on that?
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Old Aug 16th 2017, 1:57 am
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Default Re: Trying to choose where to become a resident - UK or Spain!

Originally Posted by kdpunshon
..... But my curiosity is what do they do with all the tax funds? I dont believe they have the social system of the UK. Can anyone share thoughts on that?
Funding absurdly generous pensions for government employees seems to be a common failing of most Mediterranean countries.
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Old Aug 16th 2017, 3:24 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.
Originally Posted by Pulaski
Funding absurdly generous pensions for government employees seems to be a common failing of most Mediterranean countries.
I knew I made a mistake not getting into politics!
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Old Aug 16th 2017, 5:11 am
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Default Re: Trying to choose where to become a resident - UK or Spain!

For any but the low paid or those with vast numbers of kids Spain is a very high tax country. Savings are taxed punitively, and the personal "allowance" is a joke (£5,000 vs £11,500 i think).

Whereas in the UK you pay tax at 20% on the first £33,000 (approx) of income over the PA, in spain its 19%, then 24%, then 30%. Then you can face regional taxes. Even if you don't work you can save £2,880 into a pension in the UK and have that topped up by HMRC to £3,600. Subject to age you can then make withdrawals.

In the UK a couple can shelter £40,000 a year in ISA accounts and pay no tax on interest, dividends or CGT. If you are tax resident in Spain you pay tax on all world wide income. If you are non tax resident you still have to pay tax on any income earned in spain.

Buy a smaller place in both the uk and spain and spend 184 days in the UK. Unless you're on less than, say €12,000.

Last edited by frigilianafreddy; Aug 16th 2017 at 5:15 am.
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Old Aug 16th 2017, 5:35 am
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Default Re: Trying to choose where to become a resident - UK or Spain!

Originally Posted by frigilianafreddy
For any but the low paid or those with vast numbers of kids Spain is a very high tax country. Savings are taxed punitively, and the personal "allowance" is a joke (£5,000 vs £11,500 i think).

Whereas in the UK you pay tax at 20% on the first £33,000 (approx) of income over the PA, in spain its 19%, then 24%, then 30%. Then you can face regional taxes. Even if you don't work you can save £2,880 into a pension in the UK and have that topped up by HMRC to £3,600. Subject to age you can then make withdrawals.

In the UK a couple can shelter £40,000 a year in ISA accounts and pay no tax on interest, dividends or CGT. If you are tax resident in Spain you pay tax on all world wide income. If you are non tax resident you still have to pay tax on any income earned in spain.

Buy a smaller place in both the uk and spain and spend 184 days in the UK. Unless you're on less than, say €12,000.
THAT is exactly the conclusion i have come to. I cannot buy a place in both countries which is the unfortunate part but i have a place to live in the UK for now. Spain is incredibly tax unfriendly it appears. I will not earn income in Spain so there is no problem with that. I can become a tax resident in the UK or Canada and spend the winters in Spain. Sounds like a plan. Thanks for your comment. Very useful.
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Old Aug 16th 2017, 5:46 am
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Default Re: Trying to choose where to become a resident - UK or Spain!

That is a VERY good plan. Enjoy!
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Old Aug 16th 2017, 6:46 am
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Default Re: Trying to choose where to become a resident - UK or Spain!

Originally Posted by kdpunshon
WOW, now that is worth checking on. Thanks Lincoln. Spain seems like a tax hungry country. Well ....which western country isnt but Spain seems particularly bad. I presume they have sunshine to sell and they take advantage of that. But my curiosity is what do they do with all the tax funds? I dont believe they have the social system of the UK. Can anyone share thoughts on that?
They do in fact tax the sun, beat that!
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Old Aug 16th 2017, 7:20 am
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Default Re: Trying to choose where to become a resident - UK or Spain!

Originally Posted by EsuriJohn
They do in fact tax the sun, beat that!
There are moves to abolish this ridiculous law, but the fossil fuel miners are very powerful, with their deep pockets they support moves to tax solar energy everywhere.
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Old Aug 16th 2017, 11:51 pm
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Default Re: Trying to choose where to become a resident - UK or Spain!

Originally Posted by EsuriJohn
They do in fact tax the sun, beat that!
Yes, crazy. 320 days of sun a year and not one roof has solar panels in our street. Unbelievable stupidity.
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Old Aug 17th 2017, 12:06 am
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Default Re: Trying to choose where to become a resident - UK or Spain!

Originally Posted by EsuriJohn
They do in fact tax the sun, beat that!
I'll try and beat that. 150 days of rain and people still pay for water.
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Old Aug 17th 2017, 1:09 am
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Default Re: Trying to choose where to become a resident - UK or Spain!

Thanks to everyone who jumped into the discussion and brought some humour along with them! I have enjoyed getting to "meet" some members and hope to participate myself as I learn something that might be of use to others. Probably have a bunch more questions as i tentatively step into this new journey of mine. Best wishes to all...
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Old Aug 17th 2017, 2:18 am
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Default Re: Trying to choose where to become a resident - UK or Spain!

Originally Posted by frigilianafreddy
Yes, crazy. 320 days of sun a year and not one roof has solar panels in our street. Unbelievable stupidity.
We should be clear for the benefit of the OP. In Sept 2006 the building regs were changed to insist that any new approvals for domestic dwellings must have solar hot water panels, of course such was the volume of overhang of building and approvals not many have yet been built with solar water (I am one of the lucky ones). Solar electricity has been much more problematic first it was encouraged by the socialist government with feed in tariffs and subsidies. The incoming PP government in hock to big electricity cancelled all that and imposed tax on both domestic and commercial solar electricity generation. So few people install solar electric unless they cannot connect mains electricity.
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