Brexitcasualities

I have a UK passport, my wife is Spanish. We are buying a property and plan to live in Spain 6 months pa. It's easier to buy in my wife's name as her sister has power of attorney (we live in UK). Are there tax advantages in buying in joint names though? Like CGT allowances if sell, tax on rental income.

bolton wanderer

Buying in joint names would protect your interest in the property in case of divorce or death of partner.

Ronnyone

On death the 50 % share of property passing to surviving spouse is taxable in spain unlike it UK.

Fred James

Technically, IHT is payable, but there are normally very large allowances for the surviving spouse, or in some regions, such as Andalucia, there is no tax unless ihe property is massively expensive.

Millhouse

If you have lots of assets, consider putting some in the wife's name.

Johnnyboy11

Another consideration would be UK Stamp Duty liability on a second property, which strangely also applies to overseas purchases, ouch!
There's a calcuator here: https://www.knightfrank.co.uk/buy-to...uty-calculator

bobd22

I assume the OP is buying property in Spain? and currently owns a UK property . The information in the link refers to UK property purchase not Spanish. The house they own in UK is their main home with a second home in Spain so UK stamp duty wouldn't be an issue?

Johnnyboy11

From another link (Natwest): https://www.natwest.com/mortgages/ne...ond-homes.html

"What if the property is overseas?

It doesn’t matter if the home you are buying is overseas. You’ll still need to pay Stamp Duty when buying a second home abroad. So, if you own a family property in England, but you buy a holiday home in Greece, you’ll still have to pay the tax."

bobd22

I understand that UK stamp duty rules changed around 2014/16. I bought a second home in Spain in 2008 and I certainly never paid any stamp duty to the UK on that purchase and yes I did and still own a property in the UK. The wording in that link doesn't make sense to me. From other sources I've found, read that it makes no difference if your first property is abroad and you buy either a holiday home or buy to let property in the UK you will pay a higher rate of stamp duty. I have never heard from anyone I know that has been charged UK stamp duty on a property purchase in Spain ? We pay all the required taxes to Spain which is confirmed at the notary.i rent my house in the UK out and yes declare and pay UK income tax never has any mention been made of paying any stamp duty other than when first purchasing my UK house which was 2016. Yes I could understand what you mention if I had my house in Spain which I was living in as my home and then purchased a UK property as an holiday home or buy to let. I would be interested to hear from anyone who has paid UK stamp duty on a property purchased in Spain to the UK government. I may be wrong but to me that simply doesn't make sense.

Johnnyboy11

Doesn't make sense to me either and I do hope the Natwest statement is wrong. I had planned to buy property in Spain, but this potential purchase tax, and Spanish Government disregard of property rights (Ocupas issue) have put my plans on hold. I'm off to Portugal soon to have a look around - It has the Non-Habitual Residency Scheme that seems very attractive for UK Expats.

rbs_gb

That is incredible twaddle from Aaron Price. Has to be a student on work experience? Stamp duty is only payable on properties bought in the uk, with different rules applying for non tax residents in the UK or if your going to own more than one property. Forget NatWest, try HMRC:https://www.gov.uk/stamp-duty-land-tax

Overview

You must pay Stamp Duty Land Tax (SDLT) if you buy a property or land over a certain price in England and Northern Ireland.

The tax is different if the property or land is in:

• Scotland - pay Land and Buildings Transaction Tax
• Wales - pay Land Transaction Tax if the sale was completed on or after 1 April 2018

rbs_gb

If you believe the NatWest link, what difference would it make going to Portugal? Fortunately NatWest are wrong, so it is just fake news anyway.

bobd22

Yes UK stamp duty applies to property or land bought in the UK. The point they are trying to make in the badly worded worded links is that if non UK resident and owning property overseas and buy a property in UK that will become your second home and stamp duty will apply at higher rate. The OP states he and his wife own a UK property and are buying a second home in Spain so UK stamp duty does not apply to the Spanish property , Spanish tax does when buying .

Millhouse

You won't pay stamp duty in the UK on a Spanish purchase. But if you buy in the UK while owning a Spanish property you would quality for the higher stamp duty rate.
Also if you become Spanish tax resident, you will pay the deemed rental income on a second property in the UK.

bobd22

I agree but that isn't what was said re stamp duty. Also if one rents out that UK property they pay tax on it to the UK and there is no imputed rental. If one simply keeps it as a holiday home there would be imputed rental if one is tax resident in Spain. That's my understanding .