Residency question(s)

[ripvan1]

Would anyone who has recently (or earlier) taken out Spanish residency point me to any recent publications that would help us through this concerning NIE, bank accounts, driving licenses etc.

Personal experiences would be good. Which banks give best deals and the like.

We're almost certainly going for it within the next year or so after pensions are in place. I've got reasonably good Spanish and parents had residency up 'til 2002 so know a little bit.

I know there is a lot online but some is out of date. Murcia coast is our preferred area although looking also between Alicante and Valencia.

Thanks

 

[Sea Devil]

Have a look at this page on my website - this is how we registered and I don't think anything has changed

http://www.michaelbriant.com/how_to_register.htm

It is worth remembering that for your boat and for your car if you 'import' them during the first 4 weeks of residency, then you do not have to pay the matriculation tax of 12%.

We started with Barclays Spain, as they all speak English, however Barclays Spain has now been purchased by Caixa bank. With luck somebody will speak enough English in the local branch to enable you to open an account there. Once you do that, the web site is in English, and is very very user friendly and simpler to use than the UK RBS or Barclays International.

I have swopped to a Spanish driving licence - there is a fairly easy to pass medical and then it is valid for several years. Car insurance via La Linea Directa is first class.

We can now 'get by' in Spanish so if you speak a bit then it should all be easy. The first NIE you get will almost certainly be a non resident one, but remember once you apply for the permanent 'residency NIE' then for importing the boat and car free of tax, the clock is ticking - for the car use a gestoria (which is actually what all the English 'import your car web sites use in the end) and it's just a matter of ploughing through the paperwork. For the boat you need a Spanish boat lawyer and Alex, whose details you will find on my site is excellent.

Happy house hunting - you can buy mine in Ronda if you want - http://www.michaelbriant.com/ronda_hose_sale.htm

fair winds

Michael

 

[ripvan1]

Thanks Michael, all good helpful stuff - love Ronda, been several times, but need to be within sniffing distance of the sea.
Will read website and bookmark it for reference.

Thanks again.

 

[Wansworth]

Just out of interest why are you thinking of moving to Spain.Here in the NW ....Galicia which seems to have a climate on par with the UK we have as increasing influx of British buying old houses and settling.I am here as my wife is Galician and circum. stances where such that it seemed a good idea.

 

[ribrage]

Would anyone who has recently (or earlier) taken out Spanish residency point me to any recent publications that would help us through this concerning NIE, bank accounts, driving licenses etc.

Personal experiences would be good. Which banks give best deals and the like.

We're almost certainly going for it within the next year or so after pensions are in place. I've got reasonably good Spanish and parents had residency up 'til 2002 so know a little bit.

I know there is a lot online but some is out of date. Murcia coast is our preferred area although looking also between Alicante and Valencia.

Thanks

opening a bank account is a painless process but watch out for charges - unlike most UK banks you need to keep a minimum amount in an account or be charged. Paperwork wise to open an account we used the marina address and passports - easy.


The NIE is a bit more difficult - you need to go to police stations etc - I used the solicitor that was dealing with a house purchase and he did the paperwork for nothing.

Residency im not sure about - as a UK seaman I get tax breaks so sticking with Blighty and not Spanish residency.

Good luck

 

[ribrage]

Just out of interest why are you thinking of moving to Spain.Here in the NW ....Galicia which seems to have a climate on par with the UK .

I think you answered your own question ��

 

[Sea Devil]

opening a bank account is a painless process but watch out for charges - unlike most UK banks you need to keep a minimum amount in an account or be charged. Paperwork wise to open an account we used the marina address and passports - easy.


The NIE is a bit more difficult - you need to go to police stations etc - I used the solicitor that was dealing with a house purchase and he did the paperwork for nothing.

Residency im not sure about - as a UK seaman I get tax breaks so sticking with Blighty and not Spanish residency.

Good luck

If you want to live in Spain for more than 182 days in a year then automatically you become a Spanish Resident and if you do not do the paperwork and get an NIE you will have problems. This NIE number is requested when you get supplies of water, gas, electicity - buy expensive items or take deliveries from a courier.. It is your ID for a Spanish driving licence. So both NIE and residency are linked. It also gets you into the National Health System which is brilliant and much better than the UK's. For one thing prescriptions are only a few pence per item and if you get knocked down or injured. If you buy a car or have a telephone installed you need an NIE.

Of course lots of Brits live for decades in Spain without one but their lives would be so much easier and cheaper if they conformed to the system.

A lesson I have learned recently is that when as a UK citizen, paying tax in the UK (on pensions or investments etc) but no tax in Spain as you do not work there, when you come to sell your house as well as a fee to the town hall of around 1500€ you will pay 50% tax on any 'profit' you make. - difference between buying and selling price - Yes 50% tax!!!!

Foolishly, when we purchased our Spanish house from Brits, they asked us to say 10,000 was for furniture which we did - Also when we had central heating and a new hot water system installed we paid 'cash' so avoiding 20% VAT... Silly me on both counts as this, with a legal VAT receipt, could have been added to the 'purchase and improvement' price of the house so when we sell we would not have had to pay the 50% tax on that money!

At our ages Private Annual Health Insurance is pretty expensive so when we use private doctors, specialists, dentists, etc we pay cash then take their prescriptions to the Spanish Clinic who issue these prescriptions free - and the medications are then free... There is every reason for getting properly registered and checking into the health system even if you use private doctors because if you have an emergency then the excellent spanish health system will be there for you. If you do not have an NIE residential when you come to sell your home you will be taxed far far more than the 50% mentioned above and the house sale treated legally as if it is a 2nd home....

We did all the registration ourselves without being able to say more than 'Hola' but of course if you can get the lawyer to do it for you.. I have listed how to do the registration on my web site here:- http://www.michaelbriant.com/how_to_register.htm
and there is a page on how to register your brit car as Spanish which eventually you need to do - Spanish Insurance - I use La Linea Directa - is much cheaper than UK car insurance.

Michael

 

[ripvan1]

More useful info from Michael, thanks. Wansworth, love Galicia but want a more Mediterranean like climate for our ageing bones. Regarding tax Michael, I notice there is tax on property based on value, looks like 0.2 or 0.3 pc on places we're looking at - so not too much - I take it this is an annual charge.Pensions would also be taxed but as I read it there is a generous allowance against this - still getting info on this so not 100% genned up yet.

 

[Sea Devil]

More useful info from Michael, thanks. Wansworth, love Galicia but want a more Mediterranean like climate for our ageing bones. Regarding tax Michael, I notice there is tax on property based on value, looks like 0.2 or 0.3 pc on places we're looking at - so not too much - I take it this is an annual charge.Pensions would also be taxed but as I read it there is a generous allowance against this - still getting info on this so not 100% genned up yet.

Yes the annual property tax is tiny - another reason for having NIE is you can go to your own bank and make the payment via them rather than the tax office.
If you pay tax in the UK then you cannot/will not pay tax on the same money in Spain.

For Spanish residency there are two sorts - tax paying and non tax paying - non tax you do not even fill in a tax return otherwise... Only again makes a difference when you sell - they withhold 2-3% if you are non tax paying but you 'should' get that back if you then buy again in Europe. (I am not sure if that applies to the UK) and it has to be for a primary residency.

 

[Wansworth]

This year looks like the Catastro or tax on property is going up..

 

[ribrage]

If you want to live in Spain for more than 182 days in a year then automatically you become a Spanish Resident and if you do not do the paperwork and get an NIE you will have problems. This NIE number is requested when you get supplies of water, gas, electicity - buy expensive items or take deliveries from a courier.. It is your ID for a Spanish driving licence. So both NIE and residency are linked. It also gets you into the National Health System which is brilliant and much better than the UK's. For one thing prescriptions are only a few pence per item and if you get knocked down or injured. If you buy a car or have a telephone installed you need an NIE.

Of course lots of Brits live for decades in Spain without one but their lives would be so much easier and cheaper if they conformed to the system.

A lesson I have learned recently is that when as a UK citizen, paying tax in the UK (on pensions or investments etc) but no tax in Spain as you do not work there, when you come to sell your house as well as a fee to the town hall of around 1500€ you will pay 50% tax on any 'profit' you make. - difference between buying and selling price - Yes 50% tax!!!!

Foolishly, when we purchased our Spanish house from Brits, they asked us to say 10,000 was for furniture which we did - Also when we had central heating and a new hot water system installed we paid 'cash' so avoiding 20% VAT... Silly me on both counts as this, with a legal VAT receipt, could have been added to the 'purchase and improvement' price of the house so when we sell we would not have had to pay the 50% tax on that money!

At our ages Private Annual Health Insurance is pretty expensive so when we use private doctors, specialists, dentists, etc we pay cash then take their prescriptions to the Spanish Clinic who issue these prescriptions free - and the medications are then free... There is every reason for getting properly registered and checking into the health system even if you use private doctors because if you have an emergency then the excellent spanish health system will be there for you. If you do not have an NIE residential when you come to sell your home you will be taxed far far more than the 50% mentioned above and the house sale treated legally as if it is a 2nd home....

We did all the registration ourselves without being able to say more than 'Hola' but of course if you can get the lawyer to do it for you.. I have listed how to do the registration on my web site here:- http://www.michaelbriant.com/how_to_register.htm
and there is a page on how to register your brit car as Spanish which eventually you need to do - Spanish Insurance - I use La Linea Directa - is much cheaper than UK car insurance.

Michael

hi michael

all very complicated for me as I don't "live" any where I am at sea 365 days of the year either for work or leisure. Sinking roots would cost me far to much in taxes and far more than 50 % on house profits so simpler for me to stay no. Resident.

We have private health care and just hire cars as required - currently 35€ a week from the airport can't see point in buying.

But sound advice and much appreciated.

 

[ribrage]

If you want to live in Spain for more than 182 days in a year then automatically you become a Spanish Resident and if you do not do the paperwork and get an NIE you will have problems. This NIE number is requested when you get supplies of water, gas, electicity - buy expensive items or take deliveries from a courier.. It is your ID for a Spanish driving licence. So both NIE and residency are linked. It also gets you into the National Health System which is brilliant and much better than the UK's. For one thing prescriptions are only a few pence per item and if you get knocked down or injured. If you buy a car or have a telephone installed you need an NIE.

Of course lots of Brits live for decades in Spain without one but their lives would be so much easier and cheaper if they conformed to the system.

A lesson I have learned recently is that when as a UK citizen, paying tax in the UK (on pensions or investments etc) but no tax in Spain as you do not work there, when you come to sell your house as well as a fee to the town hall of around 1500€ you will pay 50% tax on any 'profit' you make. - difference between buying and selling price - Yes 50% tax!!!!

Foolishly, when we purchased our Spanish house from Brits, they asked us to say 10,000 was for furniture which we did - Also when we had central heating and a new hot water system installed we paid 'cash' so avoiding 20% VAT... Silly me on both counts as this, with a legal VAT receipt, could have been added to the 'purchase and improvement' price of the house so when we sell we would not have had to pay the 50% tax on that money!

At our ages Private Annual Health Insurance is pretty expensive so when we use private doctors, specialists, dentists, etc we pay cash then take their prescriptions to the Spanish Clinic who issue these prescriptions free - and the medications are then free... There is every reason for getting properly registered and checking into the health system even if you use private doctors because if you have an emergency then the excellent spanish health system will be there for you. If you do not have an NIE residential when you come to sell your home you will be taxed far far more than the 50% mentioned above and the house sale treated legally as if it is a 2nd home....

We did all the registration ourselves without being able to say more than 'Hola' but of course if you can get the lawyer to do it for you.. I have listed how to do the registration on my web site here:- http://www.michaelbriant.com/how_to_register.htm
and there is a page on how to register your brit car as Spanish which eventually you need to do - Spanish Insurance - I use La Linea Directa - is much cheaper than UK car insurance.

Michael

hi michael

all very complicated for me as I don't "live" any where I am at sea 365 days of the year either for work or leisure. Sinking roots would cost me far to much in taxes and far more than 50 % on house profits so simpler for me to stay no. Resident.

We have private health care and just hire cars as required - currently 35€ a week from the airport can't see point in buying.

But sound advice and much appreciated.

 

[ripvan1]

Another question if I may to any uk bods resident in Spain. What is current tax on uk state pension over there - google brings up different figures mainly because most results are out of date. I "think" allowance is approx 11/12000 euros but some results come up with a figure of 6700. This is assuming we have moved all uk savings to spain and living on uk state pensions and said savings.

 

[Sea Devil]

Another question if I may to any uk bods resident in Spain. What is current tax on uk state pension over there - google brings up different figures mainly because most results are out of date. I "think" allowance is approx 11/12000 euros but some results come up with a figure of 6700. This is assuming we have moved all uk savings to spain and living on uk state pensions and said savings.

I am not a tax expert but I have been ex pat for 25 years. If you pay your tax in the UK on pension and savings etc then you will pay no tax in Spain. Double taxation international law says that. I would never move serious assets out of the UK - In the end it is in my opinion better to pay taxes in the UK rather than a country you don't know or understand.. At the moment my pension et al are paid into a UK offshore bank - Barclays International - and from there I transfer at an excellent exchange rate to €...

For several years I was a total liveaboard with no country of residence - the UK tax office has quite a few people like that my accountant told me.. None the less even 365 days a year aboard a boat you are liable to UK income tax on money (pension included) that you generate in the UK... If as a liveaboard say staying in Spanish waters for more than 182 days a year then you would be resident of Spain even if not registered and if, if you are not paying tax in the UK the Spanish could take the view you should be paying it in Spain.... And there are issues over the boat... No problem if you are not caught but if you are - could be expensive - I would take proper tax advice from an accountant.

I was sailing around the world so I was never resident anywhere in any way but there are horror stories about folks living 'illegally' in Spain getting caught.

Michael

 

[ripvan1]

Michael, thanks - we won't have "serious" assets to move out of UK, just house sale proceeds, savings and state pensions (altho' we both have minimal private pensions. Just trying to work out what tax if any is liable on uk state pension paid into Spanish bank.

We are not taxed on our UK state pensions but if transferred to Spain it is. What I am trying to ascertain is if the personal allowances are less or greater than our pensions - as mentioned above I'm getting 2 different allowance figures.

 

[Sea Devil]

Michael, thanks - we won't have "serious" assets to move out of UK, just house sale proceeds, savings and state pensions (altho' we both have minimal private pensions. Just trying to work out what tax if any is liable on uk state pension paid into Spanish bank.

We are not taxed on our UK state pensions but if transferred to Spain it is. What I am trying to ascertain is if the personal allowances are less or greater than our pensions - as mentioned above I'm getting 2 different allowance figures.

But why do you want to have it paid into a Spanish Bank? What is the gain?

I do not have my pension or any other assets paid into a Spanish or indeed French bank when I lived there for decades. Everything is paid into UK bank offshore either RBS who are pretty amateur or Barclays International who are excellent. You then use a currency exchange company and I use HFX to transfer 'lump' of money to my Spanish bank -

With the uncertainty of the future of the UK and the EU it seems to me that to keep ones assets and income in the UK is sensible - Some Spanish taxes can be unfriendly to ex pats. If you do not want to keep money in a UK based bank then the international versions of all the high street banks offer confidentiality and easy internet use (Except perhaps RBS/Nat West.

 

[Tranona]

Michael, thanks - we won't have "serious" assets to move out of UK, just house sale proceeds, savings and state pensions (altho' we both have minimal private pensions. Just trying to work out what tax if any is liable on uk state pension paid into Spanish bank.

We are not taxed on our UK state pensions but if transferred to Spain it is. What I am trying to ascertain is if the personal allowances are less or greater than our pensions - as mentioned above I'm getting 2 different allowance figures.

You will not be taxed on your pension in Spain. As suggested get it paid into a UK bank account and then transfer to Spain. Although your state pension will be below the personal allowance you may well be liable to income tax if your total income including that from your private pensions exceeds the personal allowance. If so it will be deducted at source under PAYE. If you have any other income that is potentially taxable you may need to complete a self assessment form. Note that there are a lot of changes coming up next April which will potentially mean lower tax if you have income from savings and dividends or wish to take lump sums from your pensions.

 

[ripvan1]

What I'm trying to find out, and I think Tranona may have just answered the question, is whether the uk state pension is below the spanish allowance. Can't see the point of transferring state pension from uk offshore bank which presumably incurs charges rather than having it paid straight into spanish bank for day to day living expenses and no tax to be paid. Savings and any other money coming in could go to offshore accounts and drawn from as and when required. All good info, thanks.

 

[Wansworth]

There has been a bit of a to do recently with pensioners returning from living abroad almost all their lives and being caught not declaring their money to the tax man.My pension is sent to my bank and I assume I will be taxed on it.I had a lump sum sent from a private fund which already had been taxed at source in the um.The man in the 5ax office said all was ok and next year I should show the man who does the tax the details of the money.Every summer we have to do tax return that can be done in the tax office so you can explain your situation or these days it can be done via internet.

 

[Sybarite]

The principal is simple. You are taxed where you are resident and residency is a question of fact.

(IIRC) if you intend going off sailing 365 days a year you remain subject to your former residency jurusdiction until you are able to declare a new one.