linda Coyle

Thanks fred, what would we do without you?!!

Brano77

A point of clarification on the personal allowances in Spain.

If a married couple resident in Spain opt for a joint return they as I understand it have two personal allowances applied. Does this mean that if for example the wife has only a small income below the single personal allowance the husband's taxable income will be reduced by the amount of unused allowance the wife is entitled to?

Mitzyboy

Yes there is child allowance in Spain
With thanks to DWP:

You can claim child benefit from the UK as a British resident in Spain. However, as with every other benefit you have to meet the eligibility criteria. In terms of child benefit, you have to be either paying class I or II contributions in the UK or be in receipt of certain benefits. If you meet this, you can normally get the benefit.

Please bear in mind however that this is a general statement about eligibility for child benefit. Each case, as with every other benefit, can be affected by individual circumstances.

It follows, that if the husband is living and working in the UK and the family are living in Spain, they can apply for the E109, also form HMRC, to cover the family for healthcare in Spain. They will have to register it with the INSS.

You can download claim forms for both child benefit and the E109 from the HMRC web site.

Fred James

It's not that simple.

Married couples no longer both get the personal allowance. Instead the second declarer only get a "family" allowance. The personal allowance is 5151 and the family allowance is 3468. Also these allowances are calculated against the lowest rate of tax - it no longer goes against the highest rate.

Also a single taxpayer gets an additional "earned income" allowance of between 4080 and 2652 depending on income. If you declare jointly you only get this allowance once.

When the tax is calculated the program automatically calculates both joint and separate options and you take the cheapest option - you don't need to work out the best option in advance and you can change it every year if circumstances change.

Brano77

Many thanks Fred - you really are a wealth of information and at a very reasonable price!! I'm off to see an English speaking Abogados/Asesores in A Coruna next week to sort out our Wills and Tax and feel well equipeed to ensure I receive good advice.

foxterrier

Yes, thank you so much, advice is very useful!!!
Very much appreciated

Katya

Fred

You are a wealth of knowledge on the subject of Tax !!!! I have been today to try and get some advise on our tax situation. I am resident and my other half is not as yet resident. He works offshore in the north sea for 2-3 weeks and then is home in spain for 2-3 weeks at a time. So at the moment he is paying UK tax, NI - so myself and the children have perm sip cards and i am also in reciept of the normal child benefit.

So based on the above we were given advise that it would be easier if hubby became resident and at the tiime of Spanish taxes were due to be paid / submitted that we can use his P60 to prove he has already paid UK tax.

However.... He has been offered a posting to angola - based on 1 month in angola and 1 month leave in spain. So he will pay taxes on his income in angola. However, my question today was what would his tax liability be here in spain - and again nothing was clear cut. We were advised again we could ether use the bank acount fiscal report at the year end and also prove that he paid angolian tax - however angolian tax is very low and no-one was quite sure if the spanish authorities might look for some tax. But should they look for some tax - then we were advised that we dont have to produce all payslips - just perhaps every 2nd or 3rd one - ie advising he worked less than he did - but that just seems a bit corrupt?? But then i guess alot of things are here???

Katya

Fred James

Katya – you’re now getting complicated!

The situation is pretty clear – you are either tax resident or you are not and there is no choice involved.

The basic rules is that if you spend more than 183 days in Spain in one calendar year you ARE tax resident. In addition to this, according to the rules, absences from Spain during this period are still counted into the total. Also, having a tax resident spouse will usually mean that you are considered tax resident.

That said, clearly your OH is in a bona fide “on off” work situation and there may be special rules to allow for this – I am sure there are Spanish oil rig workers in the same situation. I have no personal experience of this so I can't offer any specific information.


If he is deemed to be tax resident in Spain, then it’s not as simple as showing a P60 to prove you have paid UK tax – you still have to pay Spanish tax and just deduct the UK tax that has been paid.


When he is working in the UK there won’t be a huge difference in the tax due between Spain and UK tax but in Angola, with low taxes his liability for extra tax in Spain will be much higher.

I think if you try and sort this out with the Spanish taxman in advance you are going to raise all sorts of problems. It might be better to keep quiet about the situation (but keep some money in reserve in case it goes pear shaped in future). Also make absolutely sure that he does not spend more than the 183 days in Spain (if it gets nasty it is up to him to prove he wasn’t in Spain – not the other way round).

If you were forced into declaring in Spain, then withholding a few payslips could be difficult unless he was paid in cash – otherwise the taxman has access to bank accounts and if you do end up at the wrong end of a tax investigation it will not be a happy time! The Spanish Inquisition springs to mind.

That said, most people in Spain only declare what they think they can get away with – as you say – it is just a little bit corrupt!

Katya

Fred - complicated - Never !!! Just fitting in with my everyday life in spain !! - Which of course is NEVER complicated!!!!
Its just as well that my 17 month old loves the spanish nursery as im always on the go with paperwork - !! SAVE THE TREES !!! LOL

Thanks for all ur advise ! My hubby will never be spanish "tax resident based on the 183 day rule". Currently working 2 weeks offshore and 2 weeks home in spain. He travels back to aberdeen the day before and then usually comes home the day after - so his rota is more like 14 days UK and 12 spain. Same scenario would be if he takes the post in angola - 1 month and 1 month - would be travelling a day before and home a day after. However i dont believe that the Spanish taxman wouldnt want something from him.

If he isnt "Tax Resident" -does that mean him not doing his recidencia??

Thanks so Much
Katya

PS - Do you work for accountants over here???

Fred James

When you talk about him "doing his residencia", this has nothing to do with tax residency. Residency is a wrong term to describe the process. It was always called that in the past but really it referred to residence in the EU. It's official name was "tarjeta de residencia en regimen comunitario".

The new process is that you just register as a foreign (but EU citizen) resident in Spain. If he spends more than 90 days here then he should (in theory) apply but from what you have said, he will never be here that long.

If you find that to comply with certain requirements such as schooling for the children or health care then he may choose to register. - it should not affect his tax residency status as that is a matter of fact based on the time spent in Spain.

No I don't work at all , let alone for an accountant. My knowledge of the Spanish and UK tax system is purely from experience and a (large) degree of self interest as I have no desire to pay any more tax than is legally necessary!

Katya

Thanks Fred

Very helpful !!

When im talking about residencia - im talking about obtaining a green residencia certificate. At the moment myself and the children have this.

From what i read from you he doest neccesarly have to obtain this certificate as he is only in spain for spells of 14-21days at a time - and not 90 days.

If he did apply for the residencia certificate - ( as this would make live easier with the bank etc ) - where is the trigger to be "Tax Resident" ?

Sorry for my ignorance - but just trying to understand as much as i can.

I understand that at the end of the spanish tax year all residents should complete a tax return and then pay relevant taxes based on the years income or based on fiscal report from the bank.
So if my husband was resident - (not tax resident) - would he still fall into this category??

Katya