Tax - resident or non resident

[maureen]

Hi we are really confused. I and my husband have lived in spain for 4 years. We have residency. My husband pays tax on his pension in the UK. We do not submit tax returns in Spain. We pay all the local Sumas for the property.
We have seen 2 solicitors because we have been told we should be submitting a tax return each year. Both solicitors have said that because we intend to return to the UK as soon as we can sell our property (ha ha) we should cancel our residencia and be treated as non-resident for tax purposes and do nothing.
But surely if we are non-resident we will be liable for 4 years wealth tax and a 3% retention when we sell to cover unpaid taxes or is this 3% used to cover past wealth taxes?
Please let us know your view as we are very confused.

[Expert advisor]

Tax - resident or non resident

Due to the fact that you are residents in Spain, you should have opted to pay your taxes in Spain not in the UK during the last four years. However, as you have paid taxes in the UK, you should have paid as non-residents in Spain by means of the form 214.

In case of selling the property as residents, you should pay the Spanish income tax which would be 18% on the profit. The same percentage would apply to non-residents.

In any case, you are subjected to a possible inspection, which would be more likely from the moment the property is sold.


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