Hi,
Having spent the last 6 years as a Spanish Tax resident, I'm returning to the UK, possibly permanently - I'm a British national and my wife is Spanish.
I contract for UK companies through my own Spanish limited company (est. 4 years ago), and currently spend under 90 days in the UK. My wife has recently become 49% shareholder in the company, and can spend up to 180 days in the UK without becoming personally liable for UK tax.
The salary paid to me by my company is around £2,500 pcm. Here are the options I see available - are they realistic? Is my Spanish limited company safe from the HMRC?:
Option 1
spend up to 180 days in the UK (becoming UK tax resident), pay myself £2,000 pcm (taxable in the UK) and dividends could be paid to my wife (Spanish tax resident). Keep the Spanish limited company - as far as the UK is concerned I'm a UK national, employed by a Spanish company. My wife receives dividends in Spain, the Spanish limited company is out of UK jurisdiction. Pay living expenses from the Spanish limited company.
Option 2
spend over 180 days in the UK (becoming UK tax resident), pay myself £3,000 pcm. No dividends are paid to my wife (she would spend >180 days here and be a UK tax resident). Pay much greater living expenses from the Spanish limited company.
The questions are:
would my Spanish limited company be liable for UK tax or am I right in assuming that it will always remain a Spanish fiscal entity? Do I have to declare directorship, etc? i.e. are the scenarios above realistic loopholes or risky?
Would the Spanish tax authorities become suspicious that my expenses (in option 2) are exorbitant, in spite of the fact that relocation often involves expense? Spanish tax authorities regard contractors as small companies struggling to survive, and are more forgiving.
Any other problems with these scenarios?
I'd be very grateful for any advice..
Having spent the last 6 years as a Spanish Tax resident, I'm returning to the UK, possibly permanently - I'm a British national and my wife is Spanish.
I contract for UK companies through my own Spanish limited company (est. 4 years ago), and currently spend under 90 days in the UK. My wife has recently become 49% shareholder in the company, and can spend up to 180 days in the UK without becoming personally liable for UK tax.
The salary paid to me by my company is around £2,500 pcm. Here are the options I see available - are they realistic? Is my Spanish limited company safe from the HMRC?:
Option 1
spend up to 180 days in the UK (becoming UK tax resident), pay myself £2,000 pcm (taxable in the UK) and dividends could be paid to my wife (Spanish tax resident). Keep the Spanish limited company - as far as the UK is concerned I'm a UK national, employed by a Spanish company. My wife receives dividends in Spain, the Spanish limited company is out of UK jurisdiction. Pay living expenses from the Spanish limited company.
Option 2
spend over 180 days in the UK (becoming UK tax resident), pay myself £3,000 pcm. No dividends are paid to my wife (she would spend >180 days here and be a UK tax resident). Pay much greater living expenses from the Spanish limited company.
The questions are:
would my Spanish limited company be liable for UK tax or am I right in assuming that it will always remain a Spanish fiscal entity? Do I have to declare directorship, etc? i.e. are the scenarios above realistic loopholes or risky?
Would the Spanish tax authorities become suspicious that my expenses (in option 2) are exorbitant, in spite of the fact that relocation often involves expense? Spanish tax authorities regard contractors as small companies struggling to survive, and are more forgiving.
Any other problems with these scenarios?
I'd be very grateful for any advice..
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