Residencia

This is the difficult one. According to Spanish law if you plan to spend more than six months in any one year in Spain or you do spend more than six months in any one year in Spain, you should apply for residencia (residency). I have to say that we have many friends who have lived in Spain for many years who have never applied, whatever their personal reasons, and many have no intention of ever applying for residencia.

It is not difficult to obtain. You need to visit the local commisario with:

• your passport,
• a copy of your NIE number,
• three passport photographs,
• evidence that you have private health insurance or that you qualify for state healthcare because of age or the fact that you are employed in Spain,
• a letter from your Spanish bank showing your annual income and your current bank balance, and
• evidence of your annual income.

You do need to be able to demonstrate that your income is above the Spanish minimum, which will obviously change from year to year.

When you go to this meeting you will be fingerprinted and, in about six months time, a residencia card will be issued. This card has to be renewed every five years but from the day it is issued it is your identification in Spain. You can then go back to your bank and register your bank accounts from non-resident to resident status. Your residencia card is the equivalent of a passport and should be carried with you at all times. The only time in the future when you will need a passport is when you leave Spain on holiday.

There are benefits to having residencia. The most important is that if you only have one property in Spain and you wish to sell it you will not be liable for capital gains tax so long as you buy another property in Spain within three years.

Once you have residencia you will be liable for Spanish income tax, which will have to be paid in Spain rather than in the UK. This may be one reason why so many people have not taken out residencia. If you prefer to be taxed in the UK, residencia could be a problem.

One of the problems which faces people nowadays is the decision on where they should be officially registered if they are EU citizens. Even if you spend more than six months a year in Spain you may still have an official address in the UK so neither the UK authorities nor the Spanish authorities know in which country you spend most of your time. It would be difficult for either country to find out since passports are not swiped at each entry or exit from or into the countries. Essentially you are moving from one country to another with no barriers to movement but neither country knows where you actually live and this is legal at the moment. If you no longer have an address in the UK you should apply for residencia.