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Wealth Tax

Last activity 03 March 2020 by bocheball

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Safeway Al

I want to move to Spain but will not be working and am not a pensioner. I will be living off the proceeds of my house sale in England and then a private pension until I am state pension age. Do I still have to pay wealth tax and how does it work? Thank you

Johncar

Just take care that when you sell your property in UK that you will not be liable to capital gains tax in Spain.

Re wealth tax.  For a tax resident in Spain that is applicable to assets in excess of 1,000,000 euros.  Of course income tax is payable on income on invested assets.

This may help further :-

https://www.blevinsfranks.com/news/arti … allowances

Safeway Al

Thank you Johncar. I didn't know that wealth tax started at such a high rate so that will not be a problem. So if I am not earning I don't pay tax?

Johncar

Correct   No income, no income tax.   However I suggest you notify the HMRC you have moved and register with hacienda ( the Spanish tax authority) and make a tax declaration in may / June for the preceding tax year.  So if tax resident in 2019 one declared in 2020.   That way you have paperwork to prove your financial situation

Safeway Al

Thank you for the information Johncar

MySpanishResidency

To determine exactly what specific taxes you will pay in Spain as a foreigner and what the amount will be, you must first know whether you are a resident in tax terms or not.

This distinction is merely fiscal in nature, and has nothing to do with the residence permit you may have to live legally in the country. This means that you may or may not have obtained a formal residence permit, but if you meet the requirements we will now discuss, you will still be considered a resident for tax purposes.

bocheball

The requirements for being a tax resident are:
Living 183 days or more in one year in Spain.
Property in Spain
Majority of financial interests in Spain.

Is this correct?

Johncar

Sorry you are in part correct but on balance incorrect


https://www.blevinsfranks.com/news/arti … -and-taxes

The Spanish tax residence rules

You are resident for tax purposes in Spain if ANYof the following apply:

1) You spend more than 183 days in Spain cumulatively in a calendar year, whether or not you are formally registered. Temporary or sporadic absences are ignored for the purpose of this rule unless you can prove you are habitually resident in another country for over 183 days.

2) Your “centre of economic interests” is in Spain– i.e. the base for your economic or professional activities is in Spain. If you earn more income or have more assets here than in any other single country, Spain will be deemed the centre of economic activity,

3) Your “centre of vital interests” is in Spain – i.e. your spouse lives here and/or your dependent minor children. In this case you are presumed Spanish resident, even if you spend less than 183 days here, unless you can prove otherwise.

Natkao

Hi! We are planning our move with the family, and my situation looks like going to be complicated... I want to plan very careful so I don’t become a tax resident this year, but if possible, my husband does...? Do you guys know a good lawyer in Spain (we are moving to Costa Brava) to help us with this?

Johncar

If you do as you say, you will become tax resident automatically as soon as you move here

If you find a lawyer who knows what he/ she is doing they will tell you the same.

If you are familiar with understanding law this confirms what I say :-

https://www.blevinsfranks.com/news/arti … -and-taxes

PS. The info on that web page of course refers to all nationalities, including Americans.

bocheball

I contacted Blevin Frank and they told me they don't represent Americans, which I think you are.

Here is a gentleman I spoke with and has an office in NY and Barcelona.

I found him to be helpful. He's located in Barcelona.

Íñigo Aguirrezabala Iza-
Cuatrecasas-company name.
You can google him.

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