can I chase the dream

Sorry Tadd, Robert is correct in what he says.

UK rental property income must be declared in UK (it is one of the exceptions) and then in Spain as there may be a top up tax here.

The OP can live in Spain as unemployed but of course must satisfy the requirements  for his EU Registration i.e. health cover (so that would be private health insurance)  and income (which would be his net UK rental income). 

Maybe the OP thought that being self-employed would give him better value for the payments he would have to make.    As Robert says,  I think he may have to think again about that though.

I came to Spain when I was 48 and have never been employed.

I wonder what's the percentage of British, Irish and European people who live in Spain but don't become fiscal residents and rely on their own country for health care and the EHIC. I ask that because almost everyone I meet in Spain is in that position. These residents generally leave in the summer and stay with family and friends in their own country. The only fiscal residents I know are posters on here.

I suspect people live like that because it's just easier. Spain makes it very difficult and expensive for people to obey the rules. Some of them have lived that way for many years without problems. 

The unoffical view seems to be if you don't want anything from the country and are a net contributor to the economy a blind eye is turned. Spain is a pragmatic country.

So if I were the OP I would say don't worry too much and run the chase. Life's very short..

Well John, I don't think the OP actually mentioned anything about being self employed - it only seems to be Tadd who thinks that in order to rent a property out that you own, you have to register as employed, or have a registered business. News to me, but never mind.

As I said previously, paying UK NI contributions while not working or resident in the UK is purely voluntary, but if the OP has less than 35 contributing years so far, he may choose to do this to ensure he gets a full UK pension when he reaches 85 or whatever the retirment age for him will be!

johnzx

I was not aware of UK property rental exception - so fair comment and I now understand where Roberto was coming from

As for "...European people who live in Spain but don't become fiscal residents and rely on their own country for health care and the EHIC" - yes, there are a great many who do this, and yes, it's understandable because doing everything correctly (legally) sometimes seems like too much trouble or just too many hoops to jump through. And yes, the vast majority do get away with it. 

However, for the sake of the OP, I think it's only right to point out that there is naturally a risk involved in circumventing laws (as my mate Tony can attest to!), and that also there are occasionally advantages to being legal!

So let's just state for the record here that if you intend to stay in Spain for more than 90 days, you are obliged to register as a foreign resident. If you spend more than 183 days (not necesarily consecutive) in any calendar year in Spain, you are a fiscal resident whether you like it or not, and are (in most cases) obliged to declare all your worldwide income here and pay any due taxes on it.

 For those interested.:   

Robert has pointed out when one  must, or automatically does,  become resident in Spain. 

Take no notice of the doom mongers who say its all too complicated. 

If you are retired with an OAP from UK then you can get medical cover through DWP and your OAP is sufficient to cover the financial requirements.

If you are under retirement age and do not choose to find work, then providing you have private medical cover and at least the equivalent to the OAP then again it is simple to be legal

Of course you could take advice from some who think the law enforcement authorities in Spain are stupid. With contacts in the National Police and Hacienda,  I can assure you they are not and if they chose to do so,  you will be caught and punished.  It’s just not worth it.  There is no such thing as living under the radar.

Actually there seems to be a disconnect between what I read on here and the real world. I'm sure you guys are right in strict legal terms but what happens on the ground is very different. 

As I said, there are many who do it (avoid being legal) and the majority get away with it. As to whether it's worth the risk or not, only each individual can decide. Take Tony (if that is his real name!) from down the pub as an example. He's just forked out nearly a grand because he was driving an illegal car (and forfeited the car too). Since it's not the first time he's been caught, it seems he considers that's a price worth paying for flying "under the radar" (but obviously not so far under that he didn't get caught!) Like I said before, I can only speculate as to his circumstances, but suspect it has to do with UK benefits he receives. For those that flit between the two countries, and have interests in both (property, income, benefits etc), it may be something that you have to weigh up, but for anyone planning on moving to Spain lock stock and living permanently here, it doesn't really make sense to try cutting corners. Sooner or later you will likely come unstuck if you try to. 

Micky.  For 17 years I have worked (in the real world) with people applying for residencias,  and since April 2007 applications for EU Registration which replaced the Residencia.

There is a difference between the real world and the imagined world that some would like to imply exists.

In my real experience, almost all of those who complain about the system,  do so either because they do not know the facts, or because they want it to be the way they, as each disgruntled individual, wants it to be rather than accepting how it is and complying.

Those who comply, the vast majority, get the job done without hassle.  Unfortunately most of them see no reasons to shout it from the hilltops that all went without a hitch.

Thanks all for the advice it is illuminating and will need to be digested. To put the records straight, my rental income is from properties rented out through an agent which I currently pay UK tax on, they are not registerd under acopany name and I have no intention to do so unless very advantages to do so. I also have investment returns which I also pay tax on, however should I retire to Spain then my income in the uk would be close to the 10,000 threshold so I wouldn't pay much UK tax.

I would need to remain legal all the way, as I don't see the point in going for the quiet life growing veg in Spain then creating stress by being outside the law, so I would register in Spain,

so I read the answers to my questions

1  as I am healthy and have no existing conditions I should get health care below 100 per month

2  if I am careful the quiet life is able on 1100 - 1200 eu per month, good job beer is cheap over there

3   pay tax on my income in the UK then declare the income and tax paid to the Spanish authorities

it all sounds good as it is cold and grey over here

thanks and keep the replies coming all useful info allowing me to plan.

Mark

Depending on what your "investment" income is, once registered in Spain, you should be able to receive it gross i.e. without tax deducted in the UK. 

Now, here's the part where you start to think maybe you'd prefer to follow the advice of the bloke down the pub. You should be aware that the personal allowance is much lower in Spain, so you could end up paying more tax. I agree with you about staying legal to avoid undue stress, but I also acknowledge that there are alternative opinions out there. Just make sure you are as fully informed as possible before making your decisions ;-)

Sadly staying under the radar in Spain has a very low risk of being caught which is why so many do it. The police and the authorities are simply not interested.

If you try and report any illegal activity they make you jump through so many hoops to the point you give up and feel guilty for trying to do what is right

BTW

johnzx - I am a bit confused

I came to Spain when I was 48 and have never been employed.

For 17 years I have worked (in the real world) with people

RE:    I came to Spain when I was 48 and have never been employed.

As in,  with a formal paid contract

Not getting caught: 

This from The Olive Press December 2015:-  

Earlier this month, the magazine reported on a case that has been brought to the European Courts of Justice (ECJ)and which will be of interest to expats resident in Spain. It involves a Spanish taxpayer who is appealing to the ECJ over an ‘excessive’ penalty for disclosing overseas assets late.

As you are probably aware, since 2013 it has been a requirement for all Spanish tax residents to declare their assets outside Spain if they exceed €50,000 in each defined asset class.

In this case, the individual failed to disclose €340,000 held in stocks and cash in Switzerland and, in May this year, he was ordered to pay over €442,000 in interest, fines and other costs!

The taxpayer’s failure to declare his overseas assets was viewed as a serious violation by the Spanish authorities, and the maximum penalty of 150% of the tax due was levied, plus other costs.

Income to €12450 is taxed at 20%. Income over this thresh hold is taxed 25%. The OP said he was close to that level.

If you add the private medical costs he will be close to the original estimate made by someone on this thread of €250 a month deduction. His utility standing costs before consumption will be around €50 a month. So before the OP starts to live he is down €300 per month. He will also need to declare the value of his UK property on form 720 when asset taxes will come in to play.

These are some of the reasons dear posters that most expats remain outside the system. I make no judgment on the morality of doing that. I simply state that is what a majority of folks do.

In fact it is perfectly possible with a little planning to organise your life where you can live in Spain legally for part of the fiscal year (Jan to Dec) and elsewhere the remainder of the time. There are many advantages in doing that which the OP should consider.

Micky, You of course meant :    

After subtracting the tax free allowance, and any other deductables   Income to €12450 is taxed at 20%

Apologies I missed the sentence personal tax allowance for a single person under 65 years of age is €5500. 

"He will also need to declare the value of his UK property on form 720 when asset taxes will come in to play. These are some of the reasons dear posters that most expats remain outside the system."

Yes, he will have to declare his overseas assets on the 720, but you pay tax on income derived from assets, not the asset itself. Perhaps, dear poster, you're referring to wealth tax, which doesn't "come into play" unless your wealth exceeds €700,000. I suppose this is possible if the OP owns a home in the UK worth more than £500k (when purchased), but even then the allowances and rates are such that it's unlikely to break the bank.

The reason "most" expats stay outside the system is because they fail to properly inform themselves, either because they can't understand how the system works or simply can't be bothered. I also make no judgement - in fact, having strived to keep myself firmly on the right side of the law for the 18+ years I've been here, I can sympathise and even agree that to some it may be advantageous to stay off the Spanish system, although I don't condone flouting the law. 

This message was last edited by Roberto on 21/01/2016.

johnzx - I am a bit confused.   I came to Spain when I was 48 and have never been employed.   For 17 years I have worked (in the real world) with people

I have been given permission by the moderator to explain. 

For 17 years I have been a volunteer translator with the National Police, and for most of that time recruiting, training and  running groups of volunteers at 5 police establishment,  3 of which, in addition to dealing with crime reports, have foreigner‘s documentation departments.   It is from that experience I was commenting.

This message was last edited by johnzx on 21/01/2016.

Not getting caught: 

This from The Olive Press December 2015:-  

Johnzx - intersting point but I wonder if this will be reversed due to the legality challenge to the 720 form as we discussed on here back in March 2015? As well as the other 7000+ caese mentioned in the press release

I stand by my comment that the Spanish police and the authorities in Spain simply do not investigate, chase or act enough against the illegal tax dodgers, illegal residents, illegal foreign cars etc etc etc

As Roberto and yourself I keep myself on the right side of the law but many, many more don't and have been doing so for years which is a big problem

Whether it will stand up in court does not detract from the fact that it demonstrates the authorities do take action, albeit, we may not always know when they do.

Personal experience of action on anonymous info:   

Someone informed Hacienda that I was not paying taxes, which I should.    I attended a couple of interviews with AEAT’Is  investigation team, before they apologised. They would not tell who had lied about me, other than saying someone had.   I had a pretty good idea who it was.