Definitions of Residency

Definitions of Residency


There is much confusion, debate and myth surrounding this topic. The first thing to recognise is that tax residency is a matter of fact and not choice. Tax residency determines where you are liable for tax and where you are liable to recieve allowances, exemptions and reliefs. tax rates and liabilities vary depending on whether an individual is classed as resident or non-resident.

Individuals are liable to pay tax based on Spanish residence if they meet any of the following:

  • Spend  more  than  183  days  per  calendar  year  in  Spain  (a  part  day  in  Spain  is classed as a full day).
  • Their main or central place of business is directly or indirectly located in Spain.
  • If their non-separated/divorced spouse or minor children are naturally resident in Spain, regardless if they are living away 365 days per year, they are deemed tax resident of Spain.
  • There are no split years – you are either resident for the full 12 months or not.

Definitions of Income

The UK has different classifications of income, whereas Spain has two. These are:

  • General income- Earned income, Employment and pensions, Property rentals and any other income not explicitly included in investment income.
  • Investment income- Interest and dividends, Collective investment schemes, savings  and  retirement  annuity  schemes,  Capital  gains  on  assets  owned  for more than one year.