re : working in UK and resident is Spain

[ASB]

Could people please PM me with contacts for top international taxation specialists as I am in desperate need of proper advice.

Try here: http://www.pkf.co.uk/
I know people who have recommended PKF, never used them myself.

[Babybadger]

Could people please PM me with contacts for top international taxation specialists as I am in desperate need of proper advice.

[ASB]

BabyBadger,

You need a chat with a specialist.

The income you receive as a result of your UK employment (be that with your UK LTD and umbrella or whatever) will be liable to UK income tax.

This will also be liable to spanish taxes (by virtue of you being resident there). However under the DTA between spain and the UK you should get releif for UK income tax paid. This assumes you are resident for tax purposes in Spain and this may or may not be the case depending upon their exact rules and you exact travelling pattern.

Now dividends. If you remain UK resident (which may or may be the case) then these will be asessable to the UK rules. If you are Spanish resident (or both) then they will be asessable to that regime. you might, or might not be able to claimn releif on UK tax suffered. It depends on the terms of the DTA (but you should). Generally you cannot claim any relief from country 2 which is in excess of what would have been payable to country 1. The effect of this is that you pay thje ihger rate. Sometimes you may not amalgamate the income (e.g. the divdend and the income). It all depends upon the specific DTA's negotiated by the respective government.

Now your company - if you have one. It is likely that it will continue to be resident in the UK. But it is possible that it becomes resident in Spain.

You might also want to consider the NI situation. You could elect to be paying ewither UK or Spanish social security in you position. I have no idea which would be better for you.

There used to be some possible benefits by establishing an office in either Madeira or the Azores is you were Spanish resident. No idea if this is still the case.

If you end up in tenerife it may well be that the rules are different (in much the way as they are with UK protectorates). I do not beleive Tenerife is fiscally integrated completely when it come to taxation and international treaties.

[Babybadger]

I think I will be using a Composite co. (unless there is a better way) which will allow me to claim expenses. I need to clarify if I am allowed to call my Spanish Address my home address, and claim from there. Naturally I would only claim expenses as soon as I was 'bum on seat' of the flight. I will take advice on this though , and any reputable advisors on this forum please PM me.

Now I may be taxed in Spain on income tax, but what about the dividends if I am a share holder? That's where the bulk of the money is. Could I declare my Income Tax in Spain, and have the dividends paid into a UK bank Account??

All comments and views gratefully received........

[triboix]

BabyBadger,

If you operate with a limited company, the residency of the company is determined from where it is administered. This usually means the country of residency of the directors, even if your company is registered in the UK.

I think that in your case, you will be resident in both countries (yes, it is possible in the tax world!), as the UK rules that if you stay more than 3 months per year in the UK over a number of years (I can't remember exactly how many), you are a UK resident.

At a first glance, you will be liable to taxes in both countries (and both will want a share of your earnings!). However, I have no doubt there is a double taxation treaty between both countries, meaning that the tax liability should be acceptable (probably around what you would pay in the UK). Since your family will move in Spain, the double taxation treaty will probably rule that you live in Spain, meaning that you will pay taxes in Spain (IANAL, seek legal advice).

Tax-wise, corporations usually pay less taxes in the UK that other european countries, so it may be useful to try to keep your activities in the UK...

As usual, IANAL/IANAA and I advise you to seek legal advice. I it will cost you some money, but will probably save it a lot and avoid that you end up paying too much taxes.

I hope I've not confused you too much!

[BlasterBates]

I would expect that the Spanish authorities will expect you to declare this income, but that it will affect only only the tax rate on your income that is liable for tax in Spain, such as interest and investment income etc. That's the norm. There are double taxation treaties between all EU countries.

[expat]

You will be able to claim back all relevant travel expenses, provided that you continue to spend enough days/year in Spain.
...
However, the situation is complicated, and you would be best off talking to an expert on this one.

Agree with the Monkey.

Just one note: given that you are tax-resident in Spain, it is logical for the Spanish taxhombre to allow your travelling expenses against Spanish tax. If you were paying UK tax, the taxman might not allow the same expenses, because they do not relate to travel from your UK home location to the assignment site.

[XLMonkey]

Think you are mixing up your personal status with that of the company.

The company will be registered in the UK, and will pay corporation tax on it's profits, regardless of where you live. You are just the director.

Your personal income, paid by the company, will be liable for tax in the country that you are resident in (Spain). However, this is not dual taxation, since you will only pay income tax in one country (Spain).

You will be able to claim back all relevant travel expenses, provided that you continue to spend enough days/year in Spain.

You are probably best off by keeping as much money as possible in the company whilst you are working, and then slowly paying it back to yourself once you stop trading (I assume that you are not planning to operate like this for years and years).

However, the situation is complicated, and you would be best off talking to an expert on this one.

[Babybadger]

Read this yet http://www.contractoruk.com/overseas_guides/index.html ?

Right checked that out and yes the missus and kids will be living in Valencia/Tenerife,and I will be considered resident there as well by the 183 day ruling. But the company will be operating in the UK and paying UK TAX. Surely under this dual taxation law , I would only have to pay tax in the UK? I still am unclear about expenses and whether I can claim flights etc.....

[Flubster]

Read this yet http://www.contractoruk.com/overseas_guides/index.html ?

[Babybadger]

Hi There, newbie here.

I have a chance to emmigrate to Spain next year (Valencia or Tenerife are on the hot list) with the family, and am negotiating a 3 day week on same sort of money with a company. At present I am running under an Umbrella co. who pays me from the agency from the client. So I have some questions:

1) Would I be better off trading under a UK Ltd. Co. with a good accountant, bearing in mind I will be staying 3 nights in the UK so I presume I can claim expenses, what I do not know (flights, accomodation, food, fuel for UK vehicle???)

2) As I will be living more than 183 days in Spain and understand that I will be resident but retired?? So will I pay UK tax, as I earn money in the UK, or will I be taxed from Spain .

3) Has anyone else on the forum done this and know the pitfalls of 'Eurocommuting'?

4) If I choose Tenerife are there any Tax breaks? Do I need an offshore account?

Any pointers would be great and thanks in advance.

Babybadger