Are you fulfilling your residency obligations?

, ,
19.02.24
Residency - are you fulfilling your obligations?

Making sure that you are fulfilling your residency obligations can be a bit of a challenge. Any UK resident who would like to spend more than 90 days in one or more of the states that make up the Schengen zone is confronted by a time-consuming, paper-heavy visa process – which might take anything up to three months to deliver a visa badge to stick to your passport.

Whether right or wrong, it is understandable that many UK nationals with second homes in countries like France and Spain took the opportunity to apply for a residency permit prior to the UK fully leaving the EU. This was even though many had no intention of ever spending more than 183 days in the country – a requirement for its successful renewal. And incidentally, also the point at which you become a tax resident in the country.

In fact, many UK nationals held residency permits in France and Spain for years before Brexit without spending more than six months a year there. This was on the basis they would be more able to access local medical care, deal with burdensome regional administration, or reduce the potential local and national tax charges on what would have been a second home if French/Spanish property had been declared correctly.

In the past, few questions were raised as there was little coordination between the local and national government departments in both jurisdictions.

The opportunity to swap a pre-existing residency card for one stating it was issued under the UK-EU Withdrawal Agreement, thus preserving pre-Brexit rights and benefits, was more of an exchange than a review of the individual’s actual qualification for the residency permit in the first place.

But many of these cards fall due for renewal or upgrade to permanent residency cards from mid-2025, and many UK nationals might be feeling concerned about what awaits them.

The EU is currently going through a massive digital immigration upgrade, with the “Entry and Exit Scheme” (EES), expected to come online in late 2024.  This is replacing passport stamps with digital fingerprints, facial recognition, and computerised records of non-EU national’s movements in and out of the Schengen Zone. Whilst this system will establish very quickly how many days a Briton is spending in France or Spain, individuals already holding residency permits are exempt from this process.

Spain court ruling and ramifications

It is also important to understand the way a recent groundbreaking Spanish Supreme Court ruling has impacted the situation. Here, an Iranian woman appealed against the decision of a government sub-delegation office in Girona, which had declared her temporary residence and work permit extinct in 2019 when she had been absent of Spain for more than six months.

The Supreme Court saw a contradiction between Article 19 of Spain’s constitution which espoused ‘freedom of movement’ when talking about temporary residence permits, whilst regulation 162.2 of Spain’s immigration law restricted absences from Spain to no more than 182 days a year. The Supreme Court nullified the regulation but confirmed the government can re-introduce it as an organic law – a higher form of law – in the future.

Nevertheless, this now means each situation will be reviewed on its own merits, with no real security over what scenario will qualify.  Going forward, it may well be the case that such residence decisions are based more on an assessment of whether Spain is the main home, rather than the number of days. On this basis, the threat of being denied a permit renewal remains.

There are also other ramifications in Spain:

  1. The Spanish tax authorities are likely to be interested in reviewing the days in and out of Spain, and even trying to establish if your “centre of economic interests” (your economic or professional activities), or your “centre of vital interests” (your family base) is in Spain, all of which could make you liable to Spanish taxation on worldwide income and wealth.
  2. This Supreme Court ruling negates the need to invest €500,000 in Spanish real estate and the high legal costs to obtain a “Golden Visa”, which gives you the same flexibility of movement, now at a much greater cost. Perhaps another reason why the Spanish government may review the court’s decision.
  3. On renewal at five years, you are highly likely to be denied permanent residence as there is an extra stipulation of no more than 10 months of absence over the five years of temporary residence.
  4. Applying for Spanish nationality is also likely to be out of the question, as here qualification is based upon residence and making Spain your real home. Spending more than six months a year somewhere else does not reinforce this position.

Learn more about retiring to Spain by downloading our free guides.

France carte de séjour

The French carte de séjour is a residency card and not just one that provides holiday homeowners the freedom to come and go as often and as long as they please.

While UK nationals had cards before Brexit, including some who were not actually full-time residents, anyone applying now would typically apply for the VLS-TS long-stay visa, valid for one year, after which they apply for the carte de séjour residency card.   As part of the application, you sign a form stating that you intend to live in – be a resident of – France.

In order to fulfil this declared intention, you then need to register for social security and tax numbers and submit a tax return in your second year. It is your responsibility to do this.

Whether you received your carte de séjour before or after Brexit, when the time comes to renew it you will need to prove that you are a tax resident (i.e. provide your French tax returns).  If you cannot do this, your residency is unlikely to be renewed and you may also face repercussions for having applied for residency under false pretences.

France does have a variety of visas ranging from 4-12 months, which could help holiday homeowners stay longer without claiming to be residents, but it can be a lengthy process.

In late December 2023, the Senate and National Assembly voted in favour of automatically granting long-stay visas to British nationals who own French property, to allow them to spend as much time as they wish in France without falling foul of the Schengen zone 90 -180 day rule.  A month later, however, the amendment was rejected by the Constitutional Court as they deemed it contrary to the constitution, which requires any bill amendment to relate directly to the original aims of the bill. The main bill was seeking tighter controls on immigrants and the benefits they could receive – quite different to flexible visas for UK nationals with second homes in France.

Whilst this decision is final, the court did not actually rule out the automatic visa idea itself. As a result, the Senator who proposed it has said she will look for another way to present it again.

Find out more about relocating to France, including visas and tax planning by downloading our free guides.

The risks of fulfilling residency criteria

Applying for or renewing a residency permit when, from the outset, you have no intention of becoming legally resident, and merely want to benefit from the flexibility of travel it allows while remaining a permanent resident of the UK, is fundamentally wrong and potentially fraudulent.

If the authorities discover this it may well involve a large fine, the removal of the permit, and a country ban for several years. It is very likely to impact any future visa and residency permit applications, even after the ban has been lifted, as immigration officials look very unfavourably upon such impropriety.

It also has massive implications for social security and healthcare, which are extremely expensive burdens national governments do not like to see wasted or exploited.

The ongoing discussions between UK and Spanish government departments, and the new immigration bill making its rocky way through the French Parliament, may eventually lead to the annual 180-day allowance becoming available flexibly across the year, rather than the current maximum of 90 days at a time. This may be sufficient for some people, though this change may at some point need to be agreed at EU level, perhaps by way of a case before the European Court of Justice, rather than just nationally.

Any Briton falling foul of a state’s immigration authorities may find they have lost the thing they value the most – the ability to spend time at their cottage or villa for several years to come.  If any of this concerns you, you should take steps to rectify your situation before it is too late.  Blevins Franks has been advising UK nationals living in Europe for almost 50 years. We will give you bespoke advice based on your circumstances and plans for the future.

Contact us today.

Tax rates, scope and reliefs may change. Any statements concerning taxation are based upon our understanding of current taxation laws and practices which are subject to change. Tax information has been summarised; individuals should seek personalised advice.