Colin McC

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    • #190592
      Colin McC
      Participant

      Thanks Mark, I wanted to put this out here as this goes on a lot here in Spain and the Spanish are more guilty of this than foreigners! We had already decided not to touch this kind of transaction and my partner wrote to the Spanish estate agent to tell her we will not touch anything illegal, she insisted on writing to her via WhatsApp as it cannot be traced as with emails, so they are more than aware of the illegality but offered it as a possibility so they too are condoning such practices to get a sale! If we were more naive, we could have agreed and found ourselves accused of money laundering, tax evasion and as you say, be left with forged euro notes!

      So SpeakFreak, you should not be too fast to accuse people of tax evasion before finding out the facts, aside from this there are sometimes valid reasons for having to consider doing things outside the law. Not sure if you live in Spain but if you do, the attitude to paying taxes is quite different. Having said that there are plenty like that back in the UK too. We always paid our taxes there and my partner has a job where she pays hers in Spain also. If we sold our apartment and owed CGT without paying it, the reason would not be for tax evasion but because it is our only property worldwide and the the law is very unfair here, we would pay the required retention which is what we are obliged to pay. The money came from the UK in the first place. If I were you I would be careful of making assumptions.

    • #189074
      Colin McC
      Participant

      Hi Mark

      Further to our recent thread and my last reply, wanted to update you. We saw the accountant/ advisor of our estate agent on Friday eve, he deals with foreign and local business taxes etc and was very helpful. We showed him our residence certificates and empadronimiento docs and he said that we are most definitely residents and my partner definitely fiscal resident, he said Hacienda would know about us and even though we’ve not done declarations, we would already be on their radar if they wanted to get back taxes, if any were owed. In his opinion he said we should be considered as tax residents and no withholding CGT/ taxes should take place, we would be given the full selling price, less plus valia and agency fees, then we would have to complete a tax return next year, in May I think, in which we declare the capital gains, after that time we would have 3 years to re-invest either here or another EU country, if we don’t invest all in our first residence we’d have to pay the difference. He said we could even return back to live here and re-invest, always paying any difference in the profit back. Based on figures presented, our capital gains are around 18k. I asked him to make absolutely sure on this as we didn’t want a nasty shock on completing the sale if a tax certificate was needed, he said he’d never known this to be asked for with the kind of documents we have. He is speaking to his notary who will confirm what they ask for at the completion, if he says we will not be retained the 3% and can re-invest, we will go ahead and sell to this buyer as no idea when another may come along. The plan would be to get enough money in the UK in the next couple of years to either pay back the CGT or invest all of it and come back to rent, if not buy in a few years. We have decided that staying here on this ticking time bomb will only prolong what we have to do, there are no opportunities here, only tourism and that is becoming harder to make money out of due to the new mayoress who is so against the industry. Aside from this, the taxes involved in being self employed or buying and selling property are so outrageously high, it is impossible to do things by the book. Very sad that this country cannot see this and it’s why a quarter of the economy is in the black. I will update you on what the notary says, if he is not sure, we will have to think again, seems like nobody here knows what the rules and regulations are! Thanks again for your time.

    • #189061
      Colin McC
      Participant

      Hi Mark, thanks again! We are going to see our estate agent’s accountant tomorrow night as he has been recommended, admittedly he would want to help the agency sell the flat, but we have known the estate for a long time and are very friendly with him. He seemed to think the sale is simple in that you say you are non tax residents, show the deeds, the IBI payments, other necessary certs and the buyer retains the 3%. What we don’t know is when the CGT has to be paid, I read that non residents have two months to complete the form, by which case most would have left the country. I know you own property in Barcelona, maybe you have heard of lawyers called Strong Abogados who advertise widely in the expat media, we would be willing to pay something but we have very little money, hence we have to sell so we are caught in a terrible situation. My partner took an awful call centre job as she had nothing for 9 months and this after years of bad jobs and illegal employers, none of it her fault. She earns barely 1000k and that is for us both, we took out a bank loan last year, first since we lived here, so owe 10k to the bank when we leave, we are short 500 euro each month just to live, we have no choice but to leave and go to London where I can sell my art, we have tried to hard to make it work here but it is impossible. If we didn’t pay the CGT we’d still only take back a little over what we made on our house sale back in 2001, so nothing at all to show for 14 years in Barcelona. My partner is suffering with her health and now suicidal due to extreme worry. We don’t see a way out of this, if we had to stay we will run out of money in a few months, if we sell we will lose all our profit and possibly everything due to back taxes, if we do a runner we will always be living in fear back in London where we are desperate to be.  We will see this accountant tomorrow anyway and then see if we can get a lawyer but of course they can be very expensive and we paid 200 euros for 1 hours advice a few years ago and he told us it was easy, just go to Hacienda and get a tax certificate, clearly not the case!It seems nobody really knows how things work here. I will update you after we get some “professional” advice, if we lose this sale we may not get another chance to leave, not much we can do! Appreciate your time!

    • #189049
      Colin McC
      Participant

      Hi Mark, many thanks for the speedy reply! I understand what you say about us being fiscal residents, although I have never worked here but my partner has and is paying tax now but we’d read that unless you earn more than 22k there is no need to do a declaration so we innocently thought that was the case.  Even if we want to be fiscal residents now, it would mean opening a can of worms as Hacienda would want to know why we’ve not done so in all these years and as property owners we have not paid the imputed property tax (form 210 I believe) as we only have one home and it is here, we have no ties to the UK, except my bank account where we’d move over the proceeds from the sale if we go ahead. When you say be careful, can you elaborate on that, do you mean that the authorities can trace my partners family or something else? Surely 15k isn’t much money in the scheme of things when there is so much fraud here? If we did skip we wouldn’t come back to live after the 4 years, when they are not able to request owed monies, coming back for holidays should not be an issue I would have thought.

      What if we bite the bullet and go ahead and give this greedy taxman his CGT in full, does that mean we are fair and square or would there still be the issue of us having not been fiscal residents when we should have been, despite it being due to misinformation? If we put the money into a property in the UK surely we shouldn’t have to pay CGT anyway, the money came from the UK in first place which makes it very hard to suffer! If there were a way we could easily become fiscal residents we would but I read that you need to have put in tax declarations for years.

      The buyer wants us to confirm sale within 2 weeks so we don’t have long to make this life changing decision. If we don’t go now, it is just staving off going at some point, whether next  year or in 5 years, only then the CGT will be higher and the UK totally out of reach.

      Appreciate all your help on this, thanks again!

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