I have homes in Spain and Britain. I spend about 9-10 months a year in Spain and so am tax resident in Spain. I spend the rest of my time at my home in Britain. Because I have a home in Britain available for my own use, and make regular visits to it, I am also regarded as tax resident in Britain. Under the Dual Tax Agreement I pay Income Tax in Britain, not in Spain, because Britain is my centre of financial interest.

Is there anyone in a similar position who knows what taxes I should pay in Spain? In particular, I want to know if the Spanish authorities will be willing to treat my home in Spain as my principal residence, as this will affect my Spanish property taxes, capital gains tax and inheritance tax.

Can anyone recommend an English-speaking tax accountant in the Xativa/Gandia area who understands the dual residency situation and can help me make my tax declaration.

Good question David !!

Would also be keen to know position.

Cheers,

Andrea

With all due respect David I think you are a little confused - if you spend in excess of 183 day p.a. in Spain then you should declare for tax in Spain and because of the Dual Taxation Agreement you do not have to pay in both countries - the fact you make infrequent visits to your UK property does not mean you have to pay income tax there. You apply under the FD9 (see UK tax web site) and you will be released from the UK system with a code of NT. You can have only one centre of economic interest, that is the point. Your UK property is not your habitual residence based on what you say.
You might find my tax articles in the March/April 2011 editions of TIM to be helpful
http://issuu.com/timadmin/docs/tim-mar-11  pg 14
http://issuu.com/timadmin/docs/april-final2011  pg 18
Anyway as always in tax matters it is wise to take professional advice, I can recommend Pellicer & Heredia in Alicante, if that is of interest to you.
http://www.pellicerheredia.com/en/default.aspx

Thanks Rob: but the Dual Tax Agreement has a series of tests that determine in which country you pay income tax, and in my case it comes out as UK, because in every respect UK is my centre of economic interest, and that is how I want it. I do not intend to be a permanent resident in Spain, and I have no income in Spain.

Hi David - well this getting interesting because everything I have ever read or been told by tax experts always quotes the 183 day rule and given your stated length of stay in Spain I was unaware there was any other option - however I have found this:

The OECD Model Tax Convention residence tie-breaker rules
The residence tie-breaker rules in most recent UK DTAs closely follow
those in the Model Tax Convention of the Organisation for Economic
Co-operation and Development (OECD). They comprise a series of tests to
be applied successively until residence for the purposes of the Agreement is
allocated to one State or the other. In other words, once a test is conclusive
it is unnecessary to apply subsequent tests. The tests usually appear in the
order of:
? permanent home
? centre of vital interests
? habitual abode
? nationality

(extracted from here http://www.hmrc.gov.uk/helpsheets/hs302.pdf )

also
http://www.hmrc.gov.uk/international/residence.htm

Was there not recently a ruling (now I seem to recall) to clarify some of these definitions arising out of a big tax case?

Please keep us posted.

Hello Rob, thanks again. At the moment, there is no statutory definition of tax residency in Britain, though there are plans to bring one in, which is what you may have heard about. What the Revenue say is that they may treat you as tax resident in Britain even if you there less that 183 days,  if you have a property available for your use in UK, and a ‘settled pattern of life’ involving both countries. Then, as you say, the Dual Tax Agreement determines in which country you pay taxes covered by the agreement (essentially, income tax). In my case, I believe that the second test, centre of vital interests, decides the issue in favour of the UK. What I need is an English speaking tax accountant who is familiar with the issues involved and can convince the Spanish authorities of this.

I use Pellicer & Heredia in Alicante, they are Spanish but speak good English from their working in London days, might be worth giving them a call. They provide a lot of information for my articles.
http://www.pellicerheredia.com/en/default.aspx