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Thread: capital gains tax

  1. #1
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    Default capital gains tax

    we are selling our house here in the UK - our primary residence which we bought in 2003

    The gain from the original price and the expected selling price will be 150K.

    We intend buying in Spain at approx 100K and investing the rest in a savings account

    Do we have to pay capital gains in Spain once we have gained residency.

    This is going to hit our savings hard if it is the case.

  2. #2

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    Hello Sugarmouse,

    No, you do not have to pay CGT in Spain, as the sold property is located in UK and is subject to BritishTax And Propety Law. Spain has no competences there.

    Regards,
    Patricia Martin
    Immigration Consultant at Lawbird | Contact Me
    Check My Profile

  3. #3
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    Quote Originally Posted by Patricia View Post
    Hello Sugarmouse,

    No, you do not have to pay CGT in Spain, as the sold property is located in UK and is subject to BritishTax And Propety Law. Spain has no competences there.

    Regards,

    ? even if I am tax resident in Spain

    ie sell in the UK January 2014
    move to spain March 2014
    therefore tax resident from March 2014

    ?

  4. #4

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    Yes, as I indicated in my previous post, if the sold property is located in the UK, the sale will be taxed in the UK, regardless on the destination you have for the profit.

    The gain on the Estate after selling a Property will be taxed, as a general rule, in the country where the property is located.

    Regards,
    Last edited by Patricia; 06-19-2013 at 01:20 PM.
    Patricia Martin
    Immigration Consultant at Lawbird | Contact Me
    Check My Profile

  5. #5
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    Quote Originally Posted by Patricia View Post
    Yes, as I indicated in my previous post, if the sold property is located in the UK, the sale will be taxed in the UK, regardless on the destination you have for the profit.

    The Spanish Tax office will ask where the funds come from but won“t tax them.

    Regards,

    Appreciate your clarification on this matter

  6. #6
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    Default cgt

    Quote Originally Posted by Patricia View Post
    Yes, as I indicated in my previous post, if the sold property is located in the UK, the sale will be taxed in the UK, regardless on the destination you have for the profit.

    The gain on the Estate after selling a Property will be taxed, as a general rule, in the country where the property is located. If you have already declared the totality of the gain in the UK and you have been therefore taxed, you won“t be taxed again in Spain, as that would be considered Double Taxation.

    The Spanish Tax office will ask where the funds come from but won“t tax them twice.

    Regards,
    I am glad this is the case, but I am confused, as other forums say that when you become resident it is for the whole year, so if you sell in jan, move in may so that you spend more than 183 days in Sspain you will be taxed on the sale of the uk house, even though you were uk resident when it was sold. Also if it was the primary residence you wouldn't be taxed in uk either?
    Mary

  7. #7
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    Hi, I hope you don't mind me asking but as I am in a similar situation and hope you may shed light.

    The CGT on my main residence (sold feb 2014) in the Uk has a 100% exemption, so my £150k gain is tax free in the uk. I pay zero tax on the gain.

    I move to Spain March 2014 and become tax resident for 2014.

    My understanding is that due to the JTA between the Uk and Spain, if I am tax resident in Spain then my worldly income is taxable for that year. However CGT paid in the Uk can be offset against any CGT payable in Spain on my worldly income.
    As I have paid zero CGT in the Uk on my £150k profit, I have zero to offset against Spanish taxes, so wouldn't the Hacienda want their bit?

    I hope you can help me, sorry for potentially going over old ground.

  8. #8
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    Quote Originally Posted by Patricia View Post
    Yes, as I indicated in my previous post, if the sold property is located in the UK, the sale will be taxed in the UK, regardless on the destination you have for the profit.

    The gain on the Estate after selling a Property will be taxed, as a general rule, in the country where the property is located.

    Regards,
    This is contrary to all the advice I have seen in other forums, which state that, if you move to Spain before July 2, therefore spending more than 183 days there, making you a tax resident, you are liable for tax for the whole year.
    This seems to indicate that if you sell your house, win the UK lottery, receive a lump sum, it will be taxed in Spain the following year.Why is there conflicting advice on this?

  9. #9

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    Hello,

    The information given above is correct, but it can be restricted when it comes to point out that the seller of the UK property is a Spanish resident.

    The sale in the UK is declared in the Annual Income tax declaration, where for instance the price was 150.000 Euros and 10% ( 15.000 ) was paid for capital gain taxes. The Spanish Tax office will calculate what the profit would have been if the transaction had taken place in Spain ( for instance, 15% tax, 22.500 Euros). As Spain and UK have a doble taxation treaty, the Tax officer will ask the Spanish resident to pay the difference between the taxes paid in UK and the taxes such a transaction attracts in Spain. In our example, it would be the difference between 22.500 and 15.000; that is, 7.500 Euros.

    Regards,
    Patricia Martin
    Immigration Consultant at Lawbird | Contact Me
    Check My Profile

  10. #10
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    Default

    Hello,
    I wonder if someone can help me!
    I have been a spanish resident since 2000 and i bought a property in 2002 more or less.
    I sold the property october 2013 and me and my ex partner have made quite a big profit each. Because i stopped work in october 2009, i didnt do La Renta as i thought it wasnt necessary.
    When i sold the property they then classed me as a non resident and i had to pay the 3% tax for non resident! i am in the middle of trying to claim it back.
    I am very worried though as i have to do La renta in May, but as i havent worked because caring for my children, i am worried that they will take alot of this money because ive made so much profit! as the money is what i am living from.
    I went to a tax advisor when i did the papers to claim back 3% non resident (and were still waiting for there reply), i told him my concerns about La renta and he said that becasue i dont work and have 2 small children maybe they will take this into account, and i might not have to pay much or nothing?
    Im really worried they will take alot of this money, as most of it has been used already for living!
    I would be greatful for any help and advice!
    Thank you.

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