Spain digital nomad visa

[bloatymcbloat]

I'm also thinking of this...similar reasons to what others have mentioned.

So is the theory that providing you unregister as a UK tax resident (which I think is doable if your out of the country for >183 days) , you would only pay your UK corp tax but salary is paid locally which would be 15% in Spain with the digital nomad visa?

I guess if your paying a flat 15% surely you'd pull all your earnings as salary as you can and deduct against CT to get it as close to nil?

Sounds too good to be true.

[oliverson]

Enticed as I am by this visa, I think there will be a number of issues....

1. To my Ltd company

1. Given I'd be switching from small salary/large dividends to salary only, with a view to avoiding ANY Corporation Tax, the Ltd would now have to pay Employer N.I. and maybe 'other taxes' associated with employing somebody. The N.I. alone would be around 15%.
2. Ongoing depletion of bank balance due to regular payments (BBL, car lease, etc)
3. Lack of cash flowing into the company bound to upset the bank

2. To me

1. I would then be benefitting from paying just 15% Income Tax but I'm sure there will be other 'national insurance' like taxes to pay
2. We never got married. That would mean my long-term partner cannot share the same long-term stay benefits that I could
3. What about my company car? I've read that these are subject to VAT payments by the employee in Spain. What about the terms of the lease? I doubt I can just take the car abroad long-term. What about the insurance on it? Sure I can take it abroad but that's a temporary arrangement. What about my UK driving license?
4. Would I have to work in Spain 'exclusively'? Would this in effect preclude me from returning to the UK and working there some of the time?
5. What about the UK property? Difficulty/unwise leaving it unattended for long periods of time. Renting it out would make 4. above unattractive

And I'm sure there are a great deal other issues to contend with that I've not thought about.

So, 'in theory' it all seems like a good idea but when you think about it in more detail, I'm not too sure.

[jamesbrown]

I don't think retaining a UK limited would be a very good approach for a variety of reasons. You'd probably want to start afresh in Spain, which would also come with overheads (transferring contracts etc.). If the reason for retaining the UK company is to hide your working location from existing clients, that probably isn't going to work out well.

[oliverson]

I don't think retaining a UK limited would be a very good approach for a variety of reasons. You'd probably want to start afresh in Spain, which would also come with overheads (transferring contracts etc.). If the reason for retaining the UK company is to hide your working location from existing clients, that probably isn't going to work out well.

I'd agree with that and there is probably an option to go perm with the current client, if I could stomach it, which would fix some of those issues, notably N.I. on the salary, but the other issues would still remain. My Ltd will still be functioning, it will keep honouring the BBL, car lease, etc. The car would still be allocated to me as an employee of that company, perhaps a second job. Whether that would make any difference to the BIK as seen by the Spanish tax authorities I'm not sure.

I think if my situation was simpler, i.e. an employee of a non-Spanish company, living at home with my parents, etc. and I could just start afresh as you say, it would be attractive, but I have too much baggage I believe.

[jamesbrown]

Yeah, having so many attachments to the UK, including a UK company, is definitely going to complicate matters. I agree that these visa options are better suited to people with few ties who can essentially decide to move their lives overseas indefinitely. For the same reason, I don't think a lower tax bill is good enough motivation, you really need to want to move there (and consider a lower tax bill a bonus).

[WTFH]

What about my company car? I've read that these are subject to VAT payments by the employee in Spain. What about the terms of the lease? I doubt I can just take the car abroad long-term. What about the insurance on it? Sure I can take it abroad but that's a temporary arrangement. What about my UK driving license?

Your company car is leased through your UK company, and the lease is under UK regulations.
You'd need to read the lease, but I would expect that it will say you can take the car away on holiday, but only for certain lengths of time.
If you're living in Spain for more than 6 months then you need to surrender your UK driving license and apply for a Spanish one.
Your UK insurance will be invalid if you have moved to Spain, or spend more than x days per year there (may be 90, check your policy). You won't be able to get Spanish insurance unless you have a Spanish driving license.

So, your best bet is for your company to review the lease it has and return the car (while paying whatever early penalties may apply)

[agentzero]

I looked at moving to Portugal a few years ago, after brexit. It was obvious at the time that the general environment in the UK, even without a pandemic, was going to be negative for one to two decades. I am not against paying a lot of tax, but I am against paying a lot of tax when public services are destroyed and even healthcare is unreliable due to a right with ideology that is destroying the country and has 2 years left to run.

The easiest way by far at the time was to simply purchase property worth more than $500000 in Portugal. In the last year this has seen restrictions being placed on where you can buy the property. 11000 took advantage of this golden visa scheme, but from all over the world. Top countries were as you would think, Russia, China, many from the Middle East too. This mix was the negatives against it for me. I respect people escaping those oppressive countries but also wonder how much of them are related to the elites in those countries trying to find some EU country to park their cash, since Cyprus and Malta are now seeing more and more restrictions from these dodgy source countries.

If you are looking at moving and want to commit then this could still be the easiest way to get EU residency and a passport. Check the restricted areas on a map and determine what type of lifestyle you want.

[_V_]

The easiest way by far at the time was to simply purchase property worth more than $500000 in Portugal.

You are not really a digital nomad if you spend $500K in each country as a way in.

[oliverson]

Spotted this:

https://www.contractoruk.com/oversea...directors.html

The article is a bit confusing to me, unless I'm missing something. Why would you pay the minimum salary to qualify for the visa, leaving the rest in your Limited company to be taxed at what will be 25% from April 2023? Surely, you'd do the total opposite and pay no corporation tax? Also, I think the income tax rates is a flat rate at 15% irrespective of what you pay yourself.

One other thing not mentioned in the article is the requirement for 'full' private medical insurance, which is significant at around €300 / month, which would pretty much negate any CT increases for most contractors.

Then there's the employers NI that the UK Ltd would presumably still have to make.

I wanted this digital nomad visa thing to work, seeing as I already have property out in Spain and spend several months a year over there, subject to the 90/180 day rule, which is why I launched this thread, but I just don't see it offering any financial incentive for UK Ltd contractors. Please tell me I'm wrong!

[jamesbrown]

I wanted this digital nomad visa thing to work, seeing as I already have property out in Spain and spend several months a year over there, subject to the 90/180 day rule, which is why I launched this thread, but I just don't see it offering any financial incentive for UK Ltd contractors. Please tell me I'm wrong!

On the contrary, I think you're right. It don't see how it stacks up when you retain a UK company, even in the minimalist sense of paying significantly less tax which, let's face it, is a pretty weak reason on its own to transition your life overseas.