Steps to take when leaving Spain and becoming a non-resident
After 20 years living in Spain, your circumstances might suddenly or gradually change. You might want to spend more time with new grandchildren, oversee the sale of a property in your home country, or, simply seek a change.

Once you decide to move, you will need to address three important issues.

On one hand, you will need to register as a tax resident in your new country of residence. This is a crucial step, as you will receive a new tax residency certificate, which is necessary to comply with the double tax treaty between the UK or Ireland and Spain.

Second, you must ensure that Spain’s tax authority, Hacienda, has a valid address where they can contact you in Spain. This is important so they can reach you at any time during the following four years, as required by tax regulations.

The third step is, arguably, the most important. If missed, it can result in substantial financial and, possibly, personal consequences.

As mentioned previously, the taxman can contact you any time in the next four years after registering as non-resident. Unfortunately, this timeframe comes with added complications.

Spanish authorities can initiate a tax inspection based on the last tax return you submitted before leaving Spain, which means they could go back further than four years. For example, if your tax return for the 2023 tax year was submitted in 2024—the same year you left Spain—Hacienda can still inspect your tax returns up to 2028. This is because your tax return is subject to a four-year statute of limitations starting from the date of its submission, regardless of when you left the country.

This is also important if you want to make any amendments to past tax returns submitted at the time.

Our recommendation is that your third step is to seek professional advice and support.

While four years might seem like a straightforward period to manage, we have, unfortunately, witnessed many well-intentioned people leaving the country and facing negative consequences—such as fines—due to misinformation.

 

Mr. Badluck, a case study

After deciding to leave Spain, Mr. Badluck sold his only property in Spain in 2019. Unfortunately, he did not seek professional advice, nor did he update his address with the Spanish tax authorities.

In 2024, Hacienda initiated a tax inspection. The inspection reviewed Mr. Badluck’s 2019 tax return, which was submitted in April 2020—two months short of its “prescription date” of June 2024.

Spain’s tax authority sent a letter to Mr. Badluck’s former address in Spain. Unfortunately, the new property owners did not forward the letter to him. Since Hacienda did not receive a response, they contacted Mr. Badluck’s solicitors, who also failed to reply as they no longer represented him.

Hacienda then published a notification in the public bulletin of the region where Mr. Badluck used to live, but, as expected, he missed this as well.

The content of Hacienda’s notification was more important than the number of times they tried to contact him. In their letter, they requested clarification on several details related to his recent property sale.

Mr Badluck had included the sale of the property in his latest tax return. He had also made sure that he paid 141,000€ in capital gains tax (CGT), based on the difference between the selling price plus costs, and the purchase price plus costs. In his particular case, Mr. Badluck’s purchase costs were based on two different purchase deeds.

Because Mr. Badluck failed to respond to the first communication from the tax office, the inspector in charge decided to remove the second deed from the purchase costs and any further expenses associated with the transaction. As a result, CGT increased to 210.000€.

Additionally, failing to respond to Hacienda resulted in a 34,500€ fine, which increased by 15,000€ due to late-payment interest. In total, Mr. Badluck now owed an extra 118,500€ on top of the CGT he had already paid.

Unfortunately, this was not the end for Mr. Badluck. The inspector in charge of his case passed it on to the “Recaudación” (Collections) department, which would now attempt to collect the late payment.

They eventually succeeded in contacting him at his new home in the UK or Ireland. However, the new notification only reached Mr. Badluck in August 2024, two months after his June 2024 tax “prescription date,” meaning he lost the right to make a claim or file a complaint. All that remained was for him to pay the fine.

Mr. Badluck’s is not only a cautionary tale but, sadly, an occurrence we see too frequently. Taxes are sometimes complex matters and, like many other aspects in life, are better dealt with by professionals who can help and, importantly, avoid any unnecessary financial and personal costs.