Spanish PrimeMoving to Spain
Moving to Spain from the UK: what happens to your taxes.
The sun is the easy part. Here is what changes with your taxes when you move, explained in plain English by a chartered accountant who has lived in both countries.
When do you become tax resident in Spain?
Under Spanish law you are generally tax resident in Spain for a calendar year if you spend more than 183 days in Spain during that year, or if the main centre of your business or economic interests is in Spain. You are also presumed to be resident if your spouse and dependent children live in Spain, unless you can prove otherwise.
Spain does not split the tax year. If you are resident, you are resident for the whole calendar year, which is very different from the UK split year rules. The date you move can therefore make a real difference to your tax bill.
What changes once you are resident
Tax on your worldwide income
As a Spanish resident you declare your income from anywhere in the world in Spain, including rent from a UK property, savings, dividends and pensions.
The UK and Spain tax treaty
The double taxation convention between both countries decides where each type of income is taxed and how to claim relief, so you do not pay tax twice on the same income.
Your UK pensions
UK state and private pensions are generally taxed in Spain once you are resident. Government service pensions, such as those from the civil service, are generally taxed only in the UK.
Assets abroad (Modelo 720)
Spanish residents must declare certain assets held abroad, such as bank accounts, investments or property, when their value in a category is over €50,000.
The Beckham Law
The special regime for people moving to Spain, known as the Beckham Law, can let you pay tax as a non resident for the year you arrive and the following five years. Spanish employment income is taxed at a flat 24% up to €600,000, and most foreign income is not taxed in Spain.
It is available to employees, company directors and some entrepreneurs and highly qualified professionals, provided you have not been tax resident in Spain in the previous five years. You must apply within six months of starting your activity in Spain, so it needs to be planned before you move.
Before you move: a simple checklist
Plan your moving date
Because Spain taxes the full calendar year, we look at your income and your UK position to choose the best timing.
Tell HMRC you are leaving
Usually with form P85, and check how the UK Statutory Residence Test applies to you.
Review your pensions, property and investments
Some UK products are taxed very differently in Spain. It is better to know before you move.
Decide how you will work
Employee, autónomo or your own SL: each option has different tax and social security costs.
Check the Beckham Law
If you qualify, the application deadline is short, so we prepare it with you in advance.
This page is general information and not personal tax advice. Tax rules change and depend on your circumstances. Spanish Prime deals with the tax side of your move and does not provide visa or immigration services.
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