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Beckham law and being a UK Director of a LTD

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lemaitre28

Hello,


A year ago I left UK to permanently live in Spain. I now work in Spain with a fix Spanish contract and had applied to the "Beckham law" to be taxed as a 'non-resident' at a fixed 24% on all Spain sourced income.


Before moving to Spain I was a contractor with my own LTD in the UK, I still have my company and there is still a good amount of £ in it.


From what I read around the "Beckham law", I'm only taxed with Spanish sourced income.

If Pay myself a small salary (<12k £ bellow tax free allowance) from my LTD (paid on my UK personal back account), am I correct to say that I don't have t declare that in Spain and only have to declare that on the UK Self-Assessment (and thus paying no tax in UK and Spain on the 12k) ?


Thank you for any kind of advice !

gwynj

@lemaitre28


Welcome to the expat.com forum and good luck with your Spanish taxes!


Perhaps it's worth discussing this with a local accountant or tax specialist?


This lawyer page might be useful:


This page highlights some restrictions, which seem worth checking on.

lemaitre28

I have already sent out emails to different gestores, it's holiday time and they will all get back to me next year so in the meantime I thought of dropping the question here in case someone else already went through this

gwynj

@lemaitre28


Did the tax office confirm your status for Beckham Law? Or are they still considering your application?

lemaitre28

It has been confirmed 9 months ago I applied right after getting the fix contract.

DARIO2683

Hi everyone, apologies if this has been answered already. I am trying to figure out if this is possible, I run my own UK ltd company , I am the only shareholder and director of my own company.

Can I apply for the beckham law sop that my UK company can pay myself dividends which will not be taxed   in Spain?


I have a UK and Italian passport.


When living in Spain I will also receive rent from my own flat in London which under the beckham law wont be taxed.


So the question is, can I keep working from my UK company and invoice my US and UK clients from my UK company as I do now and be fiscally resident in Spain?

gwynj

@DARIO2683


Welcome to the expat.com forum and good luck with your potential move to Spain!


You can own and run a UK company, with clients in the UK, or anywhere else in the world, regardless of your personal tax residence. But the UK company continues to be subject to the UK tax rules in regards to profits and dividends.


If you're currently an employee of your business via PAYE, then you can continue with this arrangement. Or you could pay yourself as an independent contractor. Or, possibly, remunerate yourself via dividends.


I'm not sure whether Beckham's Law would apply in your case. I'm no expert on this particular scheme, but my understanding is that it's designed for those relocating to Spain specifically to take up a job offer there. And offers advantageous tax treatment to encourage you to do so. It doesn't seem that you are relocating for a job offer, as you have a UK company, and, presumably, will continue to work for this company in some capacity.


Moreover, your tax residence is potentially complicated. I don't know the Italian tax rules, and whether you've already escaped the Italian tax net. But you're almost certainly a UK tax resident, and subject to tax on your worldwide income. And because you own a home in the UK (which you will rent out rather than sell), I don't think you will escape the UK tax net, even if you were to relocate full-time to Spain. So (a) you'd probably be a dual tax resident, with the complications that involves, and (b) even if you were to qualify for Beckham's Law, the exclusion of foreign-source income wouldn't help you much, as your UK rental income and your UK dividends are still subject to UK tax.

DARIO2683

Thanks .

Yes I ascape the Italian (insane) Taxation as my Ltd pays corporation tax in the UK, I'm also British and I pay myself dividends in the UK.

Well, yes dividends will continue to he taxed in the UK. I think ? What about the double taxation treaty between Spain and UK?


I'm asking because under the Beckham law I ve been told that all foreign Income is not taxed ?

gwynj

@DARIO2683


Yes, that's my understanding of Beckham's Law too: that your non-Spanish source income won't be taxed... in Spain. But it WILL be taxed in UK (as UK dividends and UK rental income), sadly. :-)

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