October 8, 2007 at 3:45 pm #53216
I am in the throws of selling my apartment and was wondering what my tax obligations are as a non resident.The property was financed 50% stg mortgage and 50% euro mortgage.I bought the apt for 164,500 and sold at 235,000.Can you offset any tax payable if you have a mortgage on the property ?…..can anyone shed any light on this subject at all ?…..i don’t want any nasty surprises a year or two after the event…thx
October 8, 2007 at 6:01 pm #75488
Could you clarify if you mean an apartment in Spain or an apartment in the UK?
October 8, 2007 at 7:05 pm #75489
I assume you mean the property is in Spain, also assume that you are a Uk resident for Tax purposes. On this basis you will pay Taxes in Spain and than sort out the Tax in UK through the double Taxation.
It does not matter what if any mortgage you had. You bought it for €164k and sold it for €235k.
Have you added the cost of e.g taxes, notary fee, legal fee, VAT etc, on top of your €164k as these cost are around 10%, so your cost becomes €180 ( cost 164+10%) So when you sold it you would have paid agents commission and VAT and depending on the contract no other amount was involved in selling. this comes to €13000, this means that net proceeds from sale came to to €222,000. Thus your profit will be €42k ( €222k- €180K)
Now, it also depend when you bought it you will also get a tapering releif of certain % per annum, which is like offsett against inflation and finally, did you incur any expenditure such as installing A/C, new kitchen, wiring etc which has enhanced the value of your property, if yes, you can add this to your cost, needless to say you will need a receipt.
You should see a gestor and he can deal with it.
October 9, 2007 at 7:13 pm #75512
Hi Shakeel,thanks for taking the time to reply.The apartment is in spain.I havent taken into account the commisions,notary fees etc into the buy and sell price.I have recently moved to switzerland to live so im really not sure how i stand now in the way of uk tax.At the end of the day there is tax evasion and tax avoidance and im of course looking for the latter.Do people generally sell their properties in spain pay their spanish CGT and leave the money in their spanish bank a/c to avoid paying uk tax ?
October 9, 2007 at 8:27 pm #75514
If you have been in Spain for 183, days you are deamed to be Spanish resident for Tax purposes. It all depends how long you have been there and your status. If this is the case than you are resident and this could be your main home and thus not taxable. You also have the opprtunity to buy something in Spain with in two years for a rollover releif.
You must employ a gestor
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