Thread: Legal or not!!!

Hi everyone I have been holidaying in Spain for many years and I know that a lot of Brits have lived in Spain without being in the system. Right or wrong, they have not taken up Residencia. They have survived not returning back to UK all these years. I would like to know peoples views and experiences on this subject please.
Regards,
Ian

Hi Ian, There are two different things here. One is a residencia certificate and the other is a NIE number. Anyone that owns a property in Spain has to have an NIE number. That does not mean that they are resident.
A residencia is to say that you reside in Spain for more thatn six months of the year and are liable for Spanish taxes.
I had a residencia card, but it expired and then got stolen. I really miss my residencia card. I want a new one, but now all you get is a green piece of paper. Residencias in Spain do not exist any more.
An important part of Spanish living is the "padron", The Padron is for anyone living in a specific town or city, owners and renters. Everyone should present themselves at the town hall and sign on the Padron (town hall census) That way the town hall will get more money from central government for that town.

Hi ELjefe,
I own property in costa del sol and use it as a holiday home. Both my Wife and i are in our fifties and intend to live there next year. I am told that if i went self employed the income tax and other payments into the system are horrendous is that right?
What would you advise me to do, i would appreciate it
Thanks for your advice.
Ian

Hi Ian. Yes Social security for self employed is 225ish euro per month. your taxes are as uk 30% payable quarterly and the vat is 165 paid quarterly. Whatever you do two can work as one, ie you or wife go legal and the other works as well.
What ever you do , try it for 6 months before legalising. Another way around would be to open a spanish SL (limited company)

Originally Posted by Ian

I would like to know peoples views and experiences on this subject please.

My view is if you want the long suffering Spaniards to accept you as one of their own, i.e. you live and are resident in Spain and part of their community other than just someone who is trying to get as much out of the system as possible while putting the least in, then you play by the rules.

That means getting your NIE, signing on to the padron and getting your residencia. They are fully aware that in the not too distant past, the costas were known as the costas crimenales because of all the British criminals who were holed up there because there were no extradition treaties between UK and Spain, but that is mostly over now. They still have some doubts about the Brits, especially the dodgy builders et al but they are coming to accept that the majority of us are just as honest and straight forward as they are and, as such, they welcome us.

Thanks both for your help. If you start a small business off and you are not making much money do you still have to pay a standard social security figure each month?

Hi,
Yes you do. I agree with ELJEFE, try it for 6 mths, first, it's illegal but worth it. The majority of people you speak to will tell you that they wish they had been better established before they went legal. The other point ELJEFE makes re: SL's or SLL is at the moment the government is offering incentives; I.E: men over 50, 4500e grant for each person paying soc.sec., minimum of 3 people to form an SLL of which 2 must be paying soc.sec. Drawback is if you shut within 3yrs, money has to be repaid. For women over 25 forming a company the grants are huge but you need to speak to a good asesoria and if your Spanish is not good, one who speaks English, or take an interpreter.
Regards.

No-one has yet mentioned the tax situation. If you live outside of the UK for more than 6 months of the year (and can you prove that you don't, given the immigration computer records that will exist of return trips?) you are deemed to be resident in Spain, irrespective of whether you have an address in UK as many of us do. The fact that you pay tax on your UK income in the UK does not exempt you from being fiscally resident in Spain. As such, you must complete and submit a tax return in Spain.

You may get away with this for years (although the tax authorities in EU countries are increasingly sharing data) but it becomes very important when you die and leave your villa to your wife/husband. Because you have not submitted tax returns and declared yourself fiscally resident, your home in Spain will be treated as a holiday home and you will pay huge and unnecessary amounts of capital gains tax and inheritance tax.

For inheritance tax and other property taxes you can nullify these legally by putting your property into an english limited company. This also works for sales as in both cases the company changes ownership which in turn owns the property. This is fully legal and in no way underhand.