Moses2013

I read the following regarding Capital Gains Tax:
The 2012 Budget announced a new relief from capital gains tax for properties purchased after 7 December 2011. The relief was originally only for property acquired before the end of 2013 but this was extended to the end of 2014

How the relief works:Basically the relief applies where land or buildings are acquired and held for a period of 7 years. Any gain on disposal referable to that 7 year period is tax free (no income tax or capital gains tax). To qualify for the exemption the property must be located in one of the following countries:-Ireland- All EU member states- Norway- Iceland- Liechtenstein -

This means that if I were to buy a property now in Spain, I wouldn't pay any Capital Gains Tax should I sell in 5 years and make a profit, am I correct

Thank you for your answers.

Fred James

I've not heard of that one. Why would the Spanish taxman give an exemption for property bought in Iceland?

The only exception I have seen is for property bought between May 12th 2012 and December 31st 2012. Any gains are reduced by 50%.

Where did you read this?

Moses2013

It's from May, but was here:
Property capital gains tax exemption to end in December - Independent.ie

Fred James

That is for Irish taxpayers - it has nothing to do with Spanish CGT.

Moses2013

Read this and sounds complicated. I'm sure there are many cases where people have paid tax, but they could have avoided it.

Overseas assets
Overseas assets are liable to Capital Gains Tax if you're 'resident' - in the UK. For example, if you choose to live or work in the UK and do so on a regular basis, you're probably resident here. You are liable on gains arising both in and outside the UK.
Typical overseas assets include:
a holiday home abroad
shares in a foreign company
land overseas bought for development
However, if you're 'resident' in the UK but not 'domiciled' here, you may be able to claim what’s known as the 'remittance basis'. This might perhaps be because you or your father were born abroad, or you plan to live permanently abroad. You're liable on all gains arising in the UK. You'll only be liable on foreign gains when you bring them into (‘remit’ them to) the UK.
Residency, domicile and tax on foreign gains are complicated subjects - a lot depends on the facts of each case. See more in the guidance below or contact HMRC.

Fred James

I really can't see what this has to do with Spain.

Yes, UK tax is complicated and the question of domicile doubly so.

So, unless you have something pertinent to living in Spain, I don't really see the point of this thread.

Moses2013

What's the point of anything then? I'm sure there are many people who own a holiday home in Spain, so how are British people taxed then if they buy now and resell?

Fred James

If you are a non resident and have a holiday home in Spain, you pay Spanish income tax on the notional rental income (even if you don't let it). If you do let it you will pay tax on the actual rental income.

If you sell it you will pay capital gains tax on it.

If you are tax resident in the UK you will have to pay UK CGT on it as well, but you can deduct the Spanish CGT from the UK CGT. Under the Irish tax rules that you mentioned, there may well be no CGT payable in Ireland, but you will still pay it in Spain.