Spain digital nomad visa

[ladymuck]

Bear in mind that the marginal tax rate between £50k and £250k is 26.5%. In other words, small businesses with profits above £50k (i.e., pretty much all professional services contractors) are hammered.

The marginal rate comes out at 26.5% but the effective rate on, say £100k profits, would be 22.75% according to one source I read on the topic. £75k profits would be 21.5% effective rate. The first £50k is at 19%.

However that was published before the various reversals and changes of chancellor.

[eek]

The marginal rate comes out at 26.5% but the effective rate on, say £100k profits, would be 22.75% according to one source I read on the topic. £75k profits would be 21.5% effective rate. The first £50k is at 19%.

However that was published before the various reversals and changes of chancellor.

It's back to where we were before Truss arrived but I think some of the allowances may have quietly disappeared at the same time (not that we would care about the allowances that have gone).

[jamesbrown]

I just can't let it lie! Each passing day gets closer to the 25% CT and all I can see is that smug f***er Sunak with his hand out!

It's fecking annoying but, aside from maxing out your company pension contribution, there isn't much you can do. As I said, it's quite a bit worse than 25% for profits between £50k and £250k, it just averages out to 25% when you hit £250k in profit. It may be tempting to move overseas, but when you think about it properly, there's way too much involved to justify it for reducing tax alone. If it's your long-term goal, by all means do it, and consider the reduced tax a bonus, but your life needs to move over there.

[jamesbrown]

The marginal rate comes out at 26.5% but the effective rate on, say £100k profits, would be 22.75% according to one source I read on the topic. £75k profits would be 21.5% effective rate. The first £50k is at 19%.

However that was published before the various reversals and changes of chancellor.

Yes, sure. There are various explanations online, here is one from a poster here (or ex poster):

https://www.whitefieldtax.co.uk/help...n-tax-changes/

[jamesbrown]

At the risk of going off-topic again and sending Bluenose into a head-explosion, this also applies across all companies you own, so if you have a BTL in a Ltd, don't expect to pay 19% on the first £50k for that company!

[jamesbrown]

As I said to someone earlier today - currently an inside IR35 contract paying more than the outside IR35 market rate isn't a bad position to be in.

Indeed, and in a couple of years time once dividend tax and CGT is fully aligned with income tax, then you will be taxed about the same or worse than full PAYE, but I expect the inside IR35 rates will come down then too. I get why it's tempting to think about these nomad visas etc. in that light, but unless you want to move your life completely, it doesn't stack up - it rarely does when considering tax alone as there are plenty of places where you can pay almost no tax and there always have been.

[Bluenose]

You might want to start a new thread for people who want to move to Spain permanently, rather than be a nomad.

I want to be clear about what the Spanish startup law has implemented in December, this is the Spanish Nomad Visa thread about the new law is it not?

Under the new Spanish law, you have the option (you don't need to take it), to take the Spanish Nomad Visa and stay on that Visa for 5 years, paying 15-25% tax. You don't need to leave the country for 5 years.

The Visa is the same Visa but it will just be extended as it elapses, through the 5 year period.

After the 5 years have elapsed, you and your family all can apply to get a shiny new Spanish passport, if you want one. As the law covers not only partners, children but also, dependents, like Grandparents.

Therefore, this is very appealing way of not only saving 25% on your tax levels but also getting your children (and grandparents) EU passports.

EY have done a write-up here, you will need to download the PDF and then use a translator.

https://go.ey.com/3Bc0xat

[PCTNN]

unless you want to move your life completely

And more often than not it's not even just your life, but your kids' and wife's too. How would they feel losing all their friends and social circles so you can save a few bucks on tax?

These nomad visas are an appealing option only when ALL the below apply:
- you earn enough to justify the tax saving side of things
- you don't have any family
- you don't have any social ties/your social ties here are not worth saving

So, not very appealing to the average uk contractor

[jamesbrown]

And more often than not it's not even just your life, but your kids' and wife's too. How would they feel losing all their friends and social circles so you can save a few bucks on tax?

These nomad visas are an appealing option only when ALL the below apply:
- you earn enough to justify the tax saving side of things
- you don't have any family
- you don't have any social ties/your social ties here are not worth saving

So, not very appealing to the average uk contractor

Broadly agree, although I think your family could be perfectly aligned and want to move overseas - there's no reason it cannot be an opportunity for them too - and you can hardly organise your life around your friends as they will make their own choices. But I agree that it involves massive upheaval for all concerned, so tax is far down the list of sensible motivations (yet strangely high on the list for a lot of folks here, perhaps because they haven't thought it through).

[oliverson]

Broadly agree, although I think your family could be perfectly aligned and want to move overseas - there's no reason it cannot be an opportunity for them too - and you can hardly organise your life around your friends as they will make their own choices. But I agree that it involves massive upheaval for all concerned, so tax is far down the list of sensible motivations (yet strangely high on the list for a lot of folks here, perhaps because they haven't thought it through).

I started this thread but I've completely written the idea off now some of the details have emerged, such as needing to be working for a startup of < 5 years, even then the tax rate isn't 15% for you personally, more like 24%, so despite it being quite easy for me, having a 100% remote role, property already in Spain, a bank account and an NIE number, I just don't see any meaningful tax savings. I also know how conniving the Spanish authorities can be and don't trust them one bit. And maybe I'm being optimistic but I feel the tax situation may improve in the UK as the GE approaches and there' s not a chance in hell the Tories will remain in power the way things are. Not that they're a 'Tory' party in the truest sense of the word. ANY sense of the word actually.