Cgt again !

After being a resident for 16 years in Mallorca and owning my house for 9 years I sold it in May 2007. After 3 months I returned to the UK . I want to go back to Mallorca and will buy my fathers apartment using the profits of the sale on my old house . I don't think I paid cgt before I left .
The 2 year limit is up now so should I make a declaration in Mallorca on arrival for the old house and will I have late payment fines ? .

Otherwise at which year would I be safe from paying the cgt ? I could wait until the time has passed before actually purchasing my father place . If I work in the mean time or open a bank account will the tax office be allerted ?

Dear Madam,

If you are looking for a roll-over relief it may be too late as the deadline may have been overrun already.

Regarding your tax liability you are held liable for the following 4 years as from the time the tax is due. So effectively the Tax office can still demand from you the unpaid CGT.

Yours faithfully,

Hello , Thankyou for your reply

I have read this statement about reinvesting

"Exemptions in both general and transitional regimes are available (note: for residents only) in respect of:

1. Sale or lifetime gift (transfers mortis causa are in any event exempt from tax on capital gains) of their main private residence by taxpayers over 65 years of age

2. Re-investment within Spain of the proceeds of sale of a main private residence into another main private residence within 2 years. This exemption may be apportioned if only part of the proceeds of sale are duly re-invested. Extraordinarily, where a residence was sold in 2006, 2007 or 2008, the re-investment period is extended to the 31st December 2010"

it is on this site http://www.windrammiller.com/tax_spain.html


If this IS true do I have until the end of this year to reinvest the profit/equity from my previous sale ? I could be ready by then

You are welcome.

Please note the fiscal information you quote is referring to fiscal period 2009. It is already outdated by new laws in 2010. Fiscal laws are ever-changing and evolve quickly.

For example they quote CGT at 18% when it has now been raised to 19% for both residents and non-residents alike as from the 1st January 2010:


Spanish Capital Gains Tax Raise to 19% Goes Unnoticed - 22nd March 2010

What you quote is an exemption for residents in Spain. You left the country in 2007 and have returned almost three years later in 2010. In the meantime you haven't filed any taxes nor have you paid the taxes due on the sale of your property -presumably-.

What the law firm you refer to are quoting correctly is specifically in the case when prior to selling your main residence you have bought another property in 2006, 2007 or 2008 exceptionally the dealine for this roll-over relief was extended to the 31st of December 2010 as they neatly write in their fact sheet.

But you haven't purchased another property in the interim prior to the sell of your own main residence, from what you write; therefor the 2 years would be up for you already in my opinion.

Frankly, I doubt the fiscal authorities will allow you get away with it. But it's worth trying as you have nothing to lose.

Yours faithfully,
Raymundo LarraÃ*n Nesbitt

Thank you for clearing that up .I must either pay up or wait . I think from what you say that will be 5 years from the sale of the property which was in may/june 2007 and the tax would have been due on June 20 2008 .
This site is a marvelous place for getting information
Thanks Again

Thank you for your kind words.

Regards,

Quote:

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Originally Posted by Lawbird Lawyer

Dear Madam,


Regarding your tax liability you are held liable for the following 4 years as from the time the tax is due. So effectively the Tax office can still demand from you the unpaid CGT.

Yours faithfully,

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I have read that the statute of limitaions on unpaid CGT in Spain is 5 years not 4 as suggested above . Can I ask which is correct ?
Thank you