What does ‘Residence’ mean?

There is a great deal of confusion regarding what ‘residence’ is, and actually we can write about several kinds of ‘residence’.
The first type of ‘residence’ you need to be familiar with is what we are going to define as ‘residence for civil purposes’. It is the fact of living in Spain on a permanent basis. European citizens don’t have to apply for any kind of permit, and the law says that if the UE citizen is going to spend in Spain longer than three months, application for residence card or certificate must be put in place in the closest Foreign Office to the home address of that person. In this case you will also have to apply for your registration with your town council in the registry known as ‘padrón’, or list if inhabitants living on a certain place. With those two procedures, your residence for civil purposes has been established.
On the other hand, we have residence for tax purposes, also known as fiscal residence. You are supposed to be a tax resident in Spain when you have spent longer than 183 days in Spanish territory or your main economic interests lie in Spain. Then, if you are a fiscal resident, you are supposed to accomplish your main legal duties in Spain, filing for example Personal Income Tax or Form 720 in order to disclose your wealth abroad.
It is very difficult to state in general terms which option is more convenient for you, that is to say, to become or not a resident in Spain. Each case needs individual research. For example, of you are thinking on receiving redemption of a pension scheme for a certain amount of money, if it is less than 100,000 GBP you will pay less taxes in the UK, but if it is above 100,000 GBP, you will pay less taxes in Spain.
The most important thing it is that you check with a professional tax advisor what steps are more convenient for you to take.