Capital Gains again

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This topic contains 44 replies, has 11 voices, and was last updated by Profile photo of katy katy 9 years, 11 months ago.

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  • #52504
    Profile photo of Anonymous
    Anonymous
    Participant

    Hi All,

    On the subject of Capital Gains Tax for non residents. Can anyony please tell me when the gain on sale of property for a non resident will reduce to 18%. I do note for previous comments that 1st Jan 07 was mentioned, however, this can not seem to be confirmed with any of the legal people. Everyone knows it has to change but no one can confirm the date. I am about to complete a sale and need to find out the date as soon as possible. Can anyone confirm for this.

    Many thanks,
    Vinny

  • #67791
    Profile photo of Anonymous
    Anonymous
    Participant

    As far as we understand, the statute has been passed by the relevant authorities and will take effect as of Jan 1st at the new reduced rate of 18%. Whether or not one can delay the sale until after this date is a question that only yourselves can answer. Best of Luck,

    🙄

  • #67792
    Profile photo of Anonymous
    Anonymous
    Participant

    The new law was published in the BOE on the 29th November 2006 and comes into effect on 1st January 2007. You can read it at:-

    http://www.boe.es/boe/dias/2006/11/29/pdfs/A41734-41810.pdf

    Sid

  • #67794
    Profile photo of Anonymous
    Anonymous
    Participant

    Well spotted Sid.

    Mark

  • #67798
    Profile photo of Anonymous
    Anonymous
    Participant

    Vinny

    Remember you have to declare the sale and the gain to the UK tax authorities. You will be able to claim your CGT tax free allowance (X2 if the place is jointly owned) you be also be able to claim taper relief depending on how long you’ve owned the place. Then you will face UK tax on the gain at 10%, 22% or 40% depending on other taxable income and the gain made. You can, of course, deduct spanish tax paid from your eventual liability. This should still work out cheaper than the old spanish rate.

    Be careful if you sell and do not declare to the UK taxman. If you bring the money into the country and deposit it building societies now routinely report any large interest payments to the revenue. These are matched with previous declarations and you will be asked to explain the difference.
    Best to keep the dosh in Spain if you don’t want to report it in England.

  • #67799
    Profile photo of katy
    katy
    Spectator

    If the spanish home was your only home surely the UK can’t tax on that! Leaving the money in spain will only get measly interest rates anyway.

  • #67800
    Profile photo of Anonymous
    Anonymous
    Participant

    Your only home is exempt from tax if its in the UK. I don’t know about UK tax if your only home was in Spain.

    Difficult to see, if you were non resident in spain, how your spanish property could be your only one, although i suppose you could be renting in the UK and owning in Spain 😕

  • #67803
    Profile photo of Anonymous
    Anonymous
    Participant

    @katy wrote:

    If the spanish home was your only home surely the UK can’t tax on that! Leaving the money in spain will only get measly interest rates anyway.

    If you are resident in the UK then you will be liable to UK CGT on an asset in Spain.

    If it is your only home in the UK it may be exempt, but if it is in Spain it will not be exempt.

    The moral is, don’t tell the UK revenue and keep the proceeds out of the UK. That’s illegal I know, but it is probably the preferred route.

  • #67805
    Profile photo of katy
    katy
    Spectator

    At last a bit of realism. like you are going to return to the Uk and declare the profit you made in spain 😯 There are much bigger fish for them to investigate.

  • #67807
    Profile photo of Anonymous
    Anonymous
    Participant

    “There are much bigger fish for them to investigate”

    Sadly, you are wrong katy. VERY wrong.

    My wife underwent investigation last year for a discrepancy in Building society interest. A quite small amount. The IR knew the building society account and the amount. We had forgotten about this account as it was only open for a matter of 2 months as a place for the deposit on a property. They then insisted we explain every credit to our current account over the last year. This for a sum of no more than £50 in tax.

    I repeat that Bulding societies report all significant interest payments to the IR. These are automatically compared to your tax return and all discrepancies are investigated. If you don’t fill in a tax return, or only pay tax at the lower rates, i suppose you are at less risk.

    I’m just trying to be helpful. Be careful if you do this.

  • #67819
    Profile photo of Melosine
    Melosine
    Participant

    ashtondav, completely agree with you.
    One may be labelled a “small fish” but an easier target for the IR to catch.
    Went through a similar instance.
    Wouldn’t have minded if I had been out to defraud but when I remembered I had overlooked a BS account and told the IR you would have I was the head of a drug ring.
    Called in , every account itemised for 2 years. Now it’s worse because IR have legit access not only to all bank accounts but are notified of lots of houses sold in UK.
    One would be foolish to assume that they are too busy not to look at forums where any financial business is discussed.
    BIG brother is watching and waiting to pounce. Everywhere.

  • #68005
    Profile photo of Anonymous
    Anonymous
    Participant

    Oh, and i almost forgot. IR are immediately told of any and all significant money transfers to or from foreign countries and the UK.

  • #67820
    Profile photo of Anonymous
    Anonymous
    Participant

    Oh, and i almost forgot. IR are immediately told of any and all significant money transfers to or from foreign countries and the UK.

  • #68021
    Profile photo of Anonymous
    Anonymous
    Participant

    That’s exactly why I said that if you want to “evade” the tax you MUST not pay it into a UK account.

    The same rules apply in Spain and that is why there is so much “black” money under the bed!

    Sid

  • #67828
    Profile photo of Anonymous
    Anonymous
    Participant

    That’s exactly why I said that if you want to “evade” the tax you MUST not pay it into a UK account.

    The same rules apply in Spain and that is why there is so much “black” money under the bed!

    Sid

  • #68023
    Profile photo of Anonymous
    Anonymous
    Participant

    That’s exactly why I said that if you want to “evade” the tax you MUST not pay it into a UK account.

    CORRECT!

    Just make sure you visit the doc, and get some pills so you can sleep at night. IR consider a foreign owner to be financially, and tax, literate – and prosecute accordingly. They are very friendly and will tell you the penalties levied in the last few months.

    Depending on the sum involved, your age and history, you face a crippling fine, back tax, interest and a possible jail sentence.

  • #67829
    Profile photo of Anonymous
    Anonymous
    Participant

    That’s exactly why I said that if you want to “evade” the tax you MUST not pay it into a UK account.

    CORRECT!

    Just make sure you visit the doc, and get some pills so you can sleep at night. IR consider a foreign owner to be financially, and tax, literate – and prosecute accordingly. They are very friendly and will tell you the penalties levied in the last few months.

    Depending on the sum involved, your age and history, you face a crippling fine, back tax, interest and a possible jail sentence.

  • #68025
    Profile photo of Melosine
    Melosine
    Participant

    If the intention is not to declare money then how are you going to purchase anything other than deminimus items?
    Larger cash transactions will be shown by retailers etc.through being paid into their banks and so will be eventually traced back.
    No hiding places off shore anymore

  • #67830
    Profile photo of Melosine
    Melosine
    Participant

    If the intention is not to declare money then how are you going to purchase anything other than deminimus items?
    Larger cash transactions will be shown by retailers etc.through being paid into their banks and so will be eventually traced back.
    No hiding places off shore anymore

  • #68027
    Profile photo of Anonymous
    Anonymous
    Participant

    ashtondav,

    IGNORANCE OF LAW IS NO EXCUSE. please be aware that tax is the
    only aspect of where you are guilty and you have to prove that you are
    not as the case maybe.

    Revenue will send you to jail the jais are full they just want their pound
    of flesh ( remember Ken Dodd, who forget a few hundred thousands in
    Jersey)

  • #67831
    Profile photo of Anonymous
    Anonymous
    Participant

    ashtondav,

    IGNORANCE OF LAW IS NO EXCUSE. please be aware that tax is the
    only aspect of where you are guilty and you have to prove that you are
    not as the case maybe.

    Revenue will send you to jail the jais are full they just want their pound
    of flesh ( remember Ken Dodd, who forget a few hundred thousands in
    Jersey)

  • #67840
    Profile photo of Anonymous
    Anonymous
    Participant

    IGNORANCE OF LAW IS NO EXCUSE. please be aware that tax is the only aspect of where you are guilty and you have to prove that you are not as the case maybe.

    I am afraid i don’t understand this sentence (in fact i don’t think it is a sentence – just a jumble of words). I pay all taxes. I was just warning others.

    PS. Ken Dodd was acquitted.

  • #68040
    Profile photo of Anonymous
    Anonymous
    Participant

    IGNORANCE OF LAW IS NO EXCUSE. please be aware that tax is the only aspect of where you are guilty and you have to prove that you are not as the case maybe.

    I am afraid i don’t understand this sentence (in fact i don’t think it is a sentence – just a jumble of words). I pay all taxes. I was just warning others.

    PS. Ken Dodd was acquitted.

  • #67844
    Profile photo of Anonymous
    Anonymous
    Participant

    ashtondav
    What I meant by it is that unlike other aspects of law one is not guilty until proven and In the case of taxation one is guilty and it s for the defendent to prove that he/she is not guilty i.e. defend yourself against the revenue.

    I do recall that Ken Dodd wasa acquited. Of course we dont have the details of the case but his simple excuse/reason that he forgot to declare the overseas deposit was not accepted.

    I was NOT sugguesting that you do not pay your taxes. if some how inadvertantly I gave this impression I do apologise it was not intended

  • #68044
    Profile photo of Anonymous
    Anonymous
    Participant

    ashtondav
    What I meant by it is that unlike other aspects of law one is not guilty until proven and In the case of taxation one is guilty and it s for the defendent to prove that he/she is not guilty i.e. defend yourself against the revenue.

    I do recall that Ken Dodd wasa acquited. Of course we dont have the details of the case but his simple excuse/reason that he forgot to declare the overseas deposit was not accepted.

    I was NOT sugguesting that you do not pay your taxes. if some how inadvertantly I gave this impression I do apologise it was not intended

  • #67845
    Profile photo of katy
    katy
    Spectator

    I think a lot of you are just scaremongering, the tax officials aren’t that efficient. If you sell a house here just buy one in the Uk and transfer the money over for a direct sale. As for tax officers reading forums, get real…just how many forums are there?? They would need a whole department.

  • #68045
    Profile photo of katy
    katy
    Spectator

    I think a lot of you are just scaremongering, the tax officials aren’t that efficient. If you sell a house here just buy one in the Uk and transfer the money over for a direct sale. As for tax officers reading forums, get real…just how many forums are there?? They would need a whole department.

  • #67846
    Profile photo of Melosine
    Melosine
    Participant

    Katy, certainly not scaremongering .
    IR, the VAT ,council offices, and banks have people who just read newspapers and go on web sites looking and collating information about people.
    Government offices even pay for information. Going rate in 1999 was £50 or a percentage of what they collected!!

    If you should ever have the misfortune to be investigated ,even when you are innocent, then you will be surprised just how much they know about you.
    When our business rates were to be revised I was asked a question, which I answered truthfully. I was then shown a 5 year old newspaper cutting that would have been used against me if I had lied.
    Now the UK Government have access to a major online UK property site so they can check up on people .
    So please don’t ever under estimate UK officialdom and accuse anyone of scaremongering.
    It is your perogative to believe me or not just hope you will never have to find out how devious they are.

  • #68046
    Profile photo of Melosine
    Melosine
    Participant

    Katy, certainly not scaremongering .
    IR, the VAT ,council offices, and banks have people who just read newspapers and go on web sites looking and collating information about people.
    Government offices even pay for information. Going rate in 1999 was £50 or a percentage of what they collected!!

    If you should ever have the misfortune to be investigated ,even when you are innocent, then you will be surprised just how much they know about you.
    When our business rates were to be revised I was asked a question, which I answered truthfully. I was then shown a 5 year old newspaper cutting that would have been used against me if I had lied.
    Now the UK Government have access to a major online UK property site so they can check up on people .
    So please don’t ever under estimate UK officialdom and accuse anyone of scaremongering.
    It is your perogative to believe me or not just hope you will never have to find out how devious they are.

  • #67847
    Profile photo of katy
    katy
    Spectator

    May live to regret this, but I have been dodging taxes all my life wihout any comeback…go for it folks.

  • #68047
    Profile photo of katy
    katy
    Spectator

    May live to regret this, but I have been dodging taxes all my life wihout any comeback…go for it folks.

  • #67848
    Profile photo of Anonymous
    Anonymous
    Participant

    Luckily for you I’m only a TACK Collector, so you will only get the point if you sit on it !

  • #68048
    Profile photo of Anonymous
    Anonymous
    Participant

    Luckily for you I’m only a TACK Collector, so you will only get the point if you sit on it !

  • #67849
    Profile photo of Anonymous
    Anonymous
    Participant

    @katy wrote:

    I think a lot of you are just scaremongering, the tax officials aren’t that efficient

    Too right!

    The fabled IR computer system has just sent out demands for underpayment of NI to 750,000 people, all of whom have already paid!

    Sid

  • #68049
    Profile photo of Anonymous
    Anonymous
    Participant

    @katy wrote:

    I think a lot of you are just scaremongering, the tax officials aren’t that efficient

    Too right!

    The fabled IR computer system has just sent out demands for underpayment of NI to 750,000 people, all of whom have already paid!

    Sid

  • #67850
    Profile photo of Anonymous
    Anonymous
    Participant

    @katy wrote:

    May live to regret this, but I have been dodging taxes all my life wihout any comeback…go for it folks.

    Fair enough, if that’s the way you want to live. But who will pay for all the extra admin. staff that are / will be needed if Spain is to police it’s property market effectively? I have absolutely no problem with people who choose to live outside of the system – so long as they stay outside of the system 😉

    A

  • #68050
    Profile photo of Anonymous
    Anonymous
    Participant

    @katy wrote:

    May live to regret this, but I have been dodging taxes all my life wihout any comeback…go for it folks.

    Fair enough, if that’s the way you want to live. But who will pay for all the extra admin. staff that are / will be needed if Spain is to police it’s property market effectively? I have absolutely no problem with people who choose to live outside of the system – so long as they stay outside of the system 😉

    A

  • #67852
    Profile photo of katy
    katy
    Spectator

    I didn’t say I wasn’t in the system. I pay more here than I would in the UK on the same income. What I do try is to avoid paying certain taxes. I used to be a charity accountant and as such attended a lot of Inland Revenue seminars on tax inspections and evasion, many years ago now.

  • #68052
    Profile photo of katy
    katy
    Spectator

    I didn’t say I wasn’t in the system. I pay more here than I would in the UK on the same income. What I do try is to avoid paying certain taxes. I used to be a charity accountant and as such attended a lot of Inland Revenue seminars on tax inspections and evasion, many years ago now.

  • #67859
    Profile photo of Anonymous
    Anonymous
    Participant

    Were you talking about tax avoidance or tax evasion? If avoidance, then this is quite legal and you wouldn’t have to ‘dodge’ the system (your words); if evasion, then you would be outside of the system.

    A

  • #68059
    Profile photo of Anonymous
    Anonymous
    Participant

    Were you talking about tax avoidance or tax evasion? If avoidance, then this is quite legal and you wouldn’t have to ‘dodge’ the system (your words); if evasion, then you would be outside of the system.

    A

  • #68158
    Profile photo of Anonymous
    Anonymous
    Participant

    Tax officials may well not be very efficient but computers are! I know of one case going to Court because someone who always paid cash was greedy for his loyalty points and so the Tax Officials proved just his supermarket purchases were greater than his declared Income. I guess his Merc didn’t help much either!

    I can also confirm that the Authorities, Tax included, crawl thousands of sites and forums automatically and officials manually look at ones of interest to them,

    Best
    Loco

    @katy wrote:

    I think a lot of you are just scaremongering, the tax officials aren’t that efficient. If you sell a house here just buy one in the Uk and transfer the money over for a direct sale. As for tax officers reading forums, get real…just how many forums are there?? They would need a whole department.

  • #67958
    Profile photo of Anonymous
    Anonymous
    Participant

    Tax officials may well not be very efficient but computers are! I know of one case going to Court because someone who always paid cash was greedy for his loyalty points and so the Tax Officials proved just his supermarket purchases were greater than his declared Income. I guess his Merc didn’t help much either!

    I can also confirm that the Authorities, Tax included, crawl thousands of sites and forums automatically and officials manually look at ones of interest to them,

    Best
    Loco

    @katy wrote:

    I think a lot of you are just scaremongering, the tax officials aren’t that efficient. If you sell a house here just buy one in the Uk and transfer the money over for a direct sale. As for tax officers reading forums, get real…just how many forums are there?? They would need a whole department.

  • #68159
    Profile photo of katy
    katy
    Spectator

    Huh!! Maybe the tax authority should give you a job , trawling forums at 2am on New Years Eve/Day. Hope you have a better social life in 2007 🙂

  • #67959
    Profile photo of katy
    katy
    Spectator

    Huh!! Maybe the tax authority should give you a job , trawling forums at 2am on New Years Eve/Day. Hope you have a better social life in 2007 🙂

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