car purchase and resident

Hi all, I have a small problem we have a house in jaen area and with a bit more time on our hands can spend more time in spain even up to 6 months in one go (We do have a uk business so cant move over completely untill it sells)

I want to buy a lhd car in the uk to drive over and back but will stay longer than 90 days and I have read that to stay over 90 days you have to be residents we of course have NIE which we got 2 yrs ago when we bought the house so my question is can I drive a uk reg lhd car in spain for say 6 monthe or do I buy a spanish reg car in spain and can I use it in uk for 6 months at a time, your help would be much appreciated

I stand to be corrected on this, but my understanding is that you cannot use a Spanish registered car in the UK if it is in your name, and your are UK resident. The other way round also has problems, i.e UK Car with LHD. We did for a while but you run up against insurance issues etc. for more than 90 days.

The solution we opted for was to have a car at each end. You can have a spanish registered car as a non-resident and insurance is not bad at around 250 Euros. The costs of flying back and forth tend to be a lot less than driving.

Just a thought

Saludos

Thanks but the idea is to drive to spain to bring stuff and that's the only way to bring  the dogs.

You don't have to be resident for a stay over 90 days. You can sign on the register of foreign nationals as either a resident or non-resident. It is only if you stay more than 6 months in any one year that you become a fiscal (taxpaying) resident which is totally different. The non-resident certificate is valid for 2 years for up to 6 months in any one go.

If you want to drive over in your UK car then do so. It, and you, can stay for up to 6 months. You may find your insurance company will hum and hah over the insurance as they normally only cover you for up to 3 months at the minimum required cover (3rd party only) but some companies will cover you for longer. Oh, and you'll need breakdown cover as well.

And juansheetisplenty is correct. Basically, you can't drive a foreign registered car if you are resident. So no Spanish car in UK if you are resident there and no UK registered car in Spain if resident here.

We have this problem working things out too, as we have a dog that always is with us. You can only drive your UK car in Spain for 3 months but you can drive a Spanish reg car as a Spanish resident, with  Spanish driving licence for 6 months. We do this.

As regards fiscal residence the info previously quoted is true except for those of us who are former British Govt. employees. We can never be fiscally resident outside the UK.

Someone better qualified to comment than me may confirm or refute this, but I believe your last statement is incorrect. Your UK govt. pension may be taxed in the UK (and therefore not taxed again in Spain under the double taxation treaty between the two countries) but if you reside in Spain for more than 183 days in the fiscal year, you are fiscally resident in Spain whether you like it or not and regardless of who you used to work for or who pays your pension. You are then obliged to file a tax return, including all your worldwide income, whether or not it has already been taxed.

I stand to be corrected, but I think you should double check your info on this.

Erm, yes. As someone in receipt of a government pension, we are fiscally resident in Spain. Up until now it has been ignored but new rules now say you have to declare it. It is not taxable in Spain as tax has already been taken but it is taken into account to work out your tax level alongside any other income such as bank interest, state or private pension etc.

And the 3 months for a car in Spain is only due to the insurance company. You could keep it up to 6 months if you can find an insurance company and your UK road tax and MOT remains in date.

Lifeline QUOTE:  As regards fiscal residence the info previously quoted is true except for those of us who are former British Govt. employees. We can never be fiscally resident outside the UK.

As Roberto says, Not correct.

If one is living in Spain then they are tax resident from the first day and must declare their worldwide income (subject to any Double Taxation Agreements. ).   If they come as a visitor and register on the EU Citizen’s Register, proving they still have their primary residence O/S Spain they do not become tax resident unless they stay for a total of 183 days or more in a year.

That one receives a UK Government former employee pension only means that the tax on that can only be declared and paid in UK.   Until this year the Gov employee pension was ignored in Spain and one thus got two lots of tax free allowance and started paying tax in Spain at the lowest tax band level.

  As from the next Income Tax Declaration in Spain (2016) the Government employee pension will have to be declared, although no additional tax can be charged on it. That said, the amount one has received in UK will be taken into account when Hacienda decide at what tax band one starts paying tax in Spain. Thus in reality, most will probably pay more income tax in Spain on say their OAP, dividends investments, etc.  than they previously were required to do.

Motor Insurance issued in the EU covers one for obligatory cover (third party) throughout the EU (and a few other countries too) for the whole period of the policy at no extra cost. That is an EU Directive.  If you need additional cover (full comp etc)  then that would need to be arranged with your insurance company.

I'm assuming from Lifeline's post that he/she is, or believes they are, resident (and fiscally resident) in the UK, so I guess it's not really relevant anyway - although the implication is that he/she drives their Spanish plated car in the UK for no more than 6 months, which would then suggest they spend more than 6 months in Spain, which legally speaking would make them fiscally resident in Spain.

Of course, neither I nor the subsequent posters who agreed with me are official sources and could be wrong, but I'm always curious, when someone mentions something like this, on a forum or in an expat cafe or bar for example, and are told they've got it wrong and are breaking the law and putting themselves at risk...where did they get their original information from that's so different from what the majority believe, and what are they going to do about it now?

Just curious. If it happened to me it would send me into a panic of activity trying to sort it out!

The British fiscal year differs from the Spanish fiscal year which means you could actually spend more than 183 days in both.As it is, we spent less than 183 days in each as we spent two and a half months in France, so technically speaking we were not fiscally resident in either. So who do we pay our taxes to?

Roberto thanks,   you caused my brain cells to move.

I have checked and I am ‘pretty sure’ that as in Spain, where a resident is not permitted to drive a non-Spanish Reg vehicle (except in an emergency or say a mechanic testing it)  that the same applies to UK .

This seems to sum it up (although iot is not from an official source) :-  

If you are a resident in the UK, you cannot drive a non-UK car in the UK. Since there are no residency cards in the UK, whenever you are stopped by a police officer and he thinks you are actually a resident (for example if you have a UK driving licence, or have UK debit cards in your wallet), then he might confiscate your car which might be destroyed, unless you can prove you are not a UK resident, or you are working in more than one EU countries, and spend more than 6 months (185 days) per year outside of the UK.

Lifeline

On the point of the tax year.

In most cases, there is no area for confusion as the main ‘test’ is where do you:   live / your primary residence / centre of economic activity / where your family live etc ?   That determines where you are tax resident. The 183 day rule only applies when the ‘first test’ does not.

In the very rare cases where there is genuinely confusion about where one is tax resident, the tax authorities concerned  should be consulted and they will decide

Well, John is right of course, it's not always as simple as the 183 day rule suggests and other factors may apply (like I said, I'm no expert!) Presumably, Lifeline, there are other factors which determine your fiscal residency as being UK (although I still don't believe receiving a govt. pension is one of them!) If your principal residence is in the UK, however, I should imagine the relevant authorities may take a dim view of you using a Spanish registered car on a regular basis - if, of course, anybody bothered to look into things, which I'm sure they have no reason to do so :-)

Thanks for that. I question the rule you state for debit cards as we have UK debit cards with a Spanish postal address as Lloyds customers. Only Lloyds, Barclays and HSBC offer this and HSBC are on the way out with Barclays being difficult. As for our credit card providers, they state that we must have a uk address but are not bothered whether or not we actually reside in the uk. One of our immediate neighbours in the uk is a police officer and he has indicated that we are not infringing uk road traffic regulations.

It may be helpful to point out that our uk address is in Scotland and Police Scotland may interpret the rules differently from other parts of the uk. Our driving licences are Spanish as is our vehicle and the local authority grant us a Council Tax second home discount for our Scottish home!

I run a property business in Scotland and if tax became a problem I could always set up a Cayman Island company and pay their zero rated corporation tax!

Roberto.  Thanks for reminding me that I did not make it clear when I said, “That one receives a UK Government former employee pension only means that the tax on that can only be declared and paid in UK.”

Having such a pension has no bearing on tax residency.  I have been tax resident in Spain for 27 years during which time I have been in receipt of a UK former Government employee  pension

Credit Card. That was a quote from the internet and was only to point out  that it might be a reason why the police may suspect you were resident in UK,  not that it would prove you were.    I have  a couple of UK credit Cards, one with a UK address, the other a Spanish one.

I'm probably venturing into the "none of your goddamned business" territory now, so I'll try to let it go and simply remain "curious" - but if your home in Scotland is officially a second home, and assuming that your "first" home is the one in Spain, and your vehicle is registered in Spain, and your driving licence is issued in Spain....apart from your business being based in the UK, I can't help thinking that Hacienda would be very interested in your "fiscal" status. Presumably they're happy for the time being with you filing your 210 and paying your non-resident property tax each year.

Now I'll butt out!