Capital gains tax question

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This topic contains 5 replies, has 3 voices, and was last updated by Profile photo of Anonymous Anonymous 11 years ago.

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  • #51386
    Profile photo of Anonymous
    Anonymous
    Participant

    My plan to move to Spain with my Spanish wife is running into a few snags.

    The house in London has failed to sell as quickly as expected and my wife needs to make the move for work reasons early in 2006. While I have no need to go on a particular date, I would obviously prefer to join her asap. We have a friend who wants to live in the house until it is sold , and so the only thing preventing us from going to Spain together in January is the following:

    To avoid a Spanish capital gains liability on the house (which is entirely in my name) should I wait until it is sold before becoming a Spanish resident?

    NB:We intend to rent and not buy in Spain, so the exemption granted to those rolling over the proceeds from a sale in to their next property is not relevant.

  • #59993
    Profile photo of Anonymous
    Anonymous
    Participant

    I have read your subject, I don’t understand what you mean. If you are moving over here you don’t have capital gains, you say you are selling your property in UK , are you selling another property here in Spain and you them you mean the CGT on that sale ?

    Regarding the exemption on the CGT for people selling and investing the price in their new home: it is not that easy. You have to proof you have been living in the sold house for a period of three years ( for the Andalucían authorities that is the rule ) to be considered your home, get registered in the council helps to proof that and that is what we advise our clients to do asap when they become residents here, just holding a residence card does’t mean anything now in Spain for this sort of matters.

    Regards,

    Jose Maria Sanchez Alfonso
    Abogado / Lawyer
    Costa del Sol. Málaga

  • #59994
    Profile photo of Anonymous
    Anonymous
    Participant

    I’m sorry if it is not clear.

    My concern is that if I sell my house in London AFTER becoming a Spanish resident then it is clearly not my primary residence that has been sold.
    Would Hacienda then consider this sale liable to Spanish capital gains tax?

    My intention is that the house should be sold as soon as possible. I am able but reluctant to delay becoming a Spanish resident if this helps to avoid a liability as the gain would be completely tax free under UK law.

    I own no property in Spain and do not wish to purchase any.

    Gracias por su ayuda.

  • #59995
    Profile photo of Anonymous
    Anonymous
    Participant

    Hola otra vez

    Now I see what you mean. In Spain , redidents pay for ALL their incomes (from all over the World). Who is resident ? : whoever stays here for more than 183 days IN a year (counting trips out) and also if your wife/husband satys here for that period if you are not legally separated.

    BUT Hacienda gives you the choice: you can “opt out” and keep your residency in your country the first 5 years if you are coming to Spain to work. I think that is your solution, keep your residency in UK until you sell your property in Londres.

    Contact an Asesor Fiscal as soon as you come to Spain to do the “opt out” properly.

    Hasta pronto, enjoy Spain.

    Jose Maria Sanchez Alfonso
    Abogado / Lawyer
    Costa del Sol, Málaga
    jmsalfonso@inicia.es

  • #60035
    Profile photo of Anonymous
    Anonymous
    Participant

    Thankyou very much. That is very encouraging and I will certainly investigate that option. Are you able to tell me what this procedure is called in Spanish as I have never heard of it before?

  • #60143
    Profile photo of Anonymous
    Anonymous
    Participant

    Hi Guestc

    Something else you should consider – it has been a while since I was in the UK but I believe that if you move to Spain then the UK tax man does not consider your home as your primary residence either – unless you actively try to sell it when you move. Having someone in could be construed as renting it out therefore you are not actively trying to sell it.

    I would be careful if I were you – probabyl best tio sell your property in UK as soon as possible – at least keep it on the market. Also speak to an accountant in the UK – he will guide you as to the law – you can usually get a half hour meeting with them for about £40 (or maybe it really has been a long time since I was in the UK)

    Regards

    Vince

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