Jon-Bxl

I've been out of the UK for a LONG TIME - so probably have this completely wrong. But my understanding is that there is no Capital Gains Tax (CGT) to pay IN THE UK for individuals who buy off plan and then sell before completion. Not because they are fidding it as there is no paper trail (there is one in the contract bundle orginal/assigned at the Notaire) - but because one has no actual asset to 'touch' or 'own' e.g a house built and bought and sold for a pofit; a stock certificate etc. So if an individual buys a place off plan and sells it for a profit my understanding is that it is OK to keep the gain in the UK.

I dont know what the rule is in Spain however, as in this case you are liable for tax treatment in both countres.. and need to look at the relevant tax treaties etc. Assuming that I am right about the UK doesnt necessarilly mean that there is no tax in Spain - even if you are not tax-resident there.

However (if this is true) if somoene makes a 'business' of it and its not a on-off - i.e they are in the habit of doing this, they may legally be obligated in the UK to declare this as a source of income. The definition of 'making a business of it' is something that I dont know about. There will ether be a rule written down somewhere - or the revenue can make an assesment. Again there may also be rules about this in Spain too. Lets face it if the EU are taking them to court, over CGT, they thought about it first and probably have rules about off-plan pre-completion sales too

Proper international financial advice is essential here - and often can highlight completely proper ways to plan out and maximise the investment. One certainly should not rely on posts like this one!!

That last paragraph is the important one, the rest above it could be wrong as again Ive been away for a long time.

Regards
Jon

jdr

And dont forget.... the taxman doesn`t have to prove you did, you have to prove you didn`t make taxable monies

teflon

Hi All, Just back from a short relaxing break, weather dull but warm, and certainly no rain, unlike the U.K. Thanks to Michael for taking us to townhouses. Apparently block 5 will be the last to complete. Anytime between now and next year!!! Whole area looking good, but (in my opinion) will take a long time to realize the full potential. Main problem at the beginning will be lack of any support infrastructure. i.e. shops, bars restaurants etc. Lets hope the commercial centre gets off the ground pretty quickly. A few pics.Regards Teflon.

teflon

A few more pics.Regards Teflon.[/QUOTE]

Woodzie

Yes, I see your point Karen. Unfortunately we didn't have time to sort out services on our last visit so have no direct info on that. But there must be a permenant supply because the chap in the Rago apartment said "make the most of your free water & electric, it won't last long". He told us he had his for about 1 month & then Fadesa posted a notice on his door advising of a disconnection date of their supply. Very confusing!!!

Carol&John

Thanks for the new photos, Teflon! Notice how every so often a set of photos appears out of the blue like a gift from heaven? Great stuff! I like the way the gardens are laid out on the manzana 5 pics: split level. Eventhough the grass isn't as green as other places, it looks quite pleasant. The fencing will come in handy for loads of trailing shrubs which your community may wish to obtain.

EsuriJohn

Hi Teflon,

Thanks for the photo's you have two shots of my plot in the background just underneath the bushy topped tree on top the hill across the 16th fairway from you. It is a view I have not seen since it has not been possible for "strangers" to gain access to the townhouses site until now.

Regards,

John.

Carol&John

Hi Jon,
I saw this article in The Oracle and have posted a link in the CGT thread. I need to read over the first few paragraphs, because I get confused (easily) with all the "reduction"s.
Carol

David

I expect that what you currently have is builders supply. Fadesa legally have to terminate this supply when they complete construction. You will need to apply for residential supply.

It's a standard procedure. However DO make the most of your free supply.

jsavitt

Spanish Banks

We have completed our townhouse purchase. We have a bank account with Banco de Andalusia. Their bank charges are very high as are, I believe, throughout Spainish banks. Is a Spanish bank account actually required now that I have completed my purchase? What is to stop me setting up standing orders etc from my existing First Direct account in blighty and close down my Spanish account? Cash is readily available from cashpoints and credit cards are accepted everywhere. When we transferred the purchase funds from First Direct, no fees were incurred in the UK but the Spanish bank charged us over 450 euros!

Any views?

MEL & JOHN

Hi
We have a Halifax UK and Halifax Spain accounts. All transfers between the two can be made with no charges applied. Both are online but cannot transfer between the two online, have to make a phone call. Very easy system and staff helpful - English speaking in Spain. Have you, like us purchased without the Cert of 1st Occupation ? Silvia said they might have it this week but I have not heard anything.

Regards

Mel

jsavitt

Thanks for the reply. Is there any point at all in having a Spanish bank account as it seems to me that once you've purchased the property all further banking can be from the UK.

We completed without the first occupation licence which is expected any day now. We can now concentrate on snagging before we move our bits & pieces in.

EsuriJohn

Hi jasvitt,

I would love to know the definitive answerer to this question. Buried somewhere in Fadesa's publicity they seemed to say you could conduct the purchase in England from England and then the first thing they did was to open a bank account for you and me at Banco Analucia. Why?

Then you have to pay National and Local taxes in Euro and they don't accept cash but they have a method that involves the Spanish banking system where you can pay cash in over a bank counter and have the tax demand stamped.

Finally there are utility payments which from everything I have read you need a Spanish account to even get the utility connected and they then take cash from your account as and when they require it with little logic. They may refuse you a connection if you don't have a local account.

I wouldn't mind betting that there will be some EU rule somewhere that says they can't force you to have accounts in more than one country and that your home account should be valid all over Europe but it will take years for the system to catch up and of course it will not cover UK since we are not in the Euro club.

Regards,

John.

Jon-Bxl

[QUOTE=........ Is there any point at all in having a Spanish bank account as it seems to me that once you've purchased the property all further banking can be from the UK.........[/QUOTE]

Hi jsavitt

Bank charges INTERNATIONALLY are a complete rip off in Spain - I would say illegal even. I've posted before about these. A friend of mine spent 150x more to transfer into Spanish account than I would have paid to receive a similar amount in my non-spanish account. (from anywhere than Spain) To send money out of Spain internationally is likewise a complete rip-off.

This is with most banks - it look like shopping around or making a deal BEFORE you transfer or opening an account of the same bank you have in the UK (eg Halifax) may help. Sending amounts less than 12500 Euros can also be done at v. low charges (I think) these may recently have been upgraded to transfers of 50K. Always ask both banks FIRST before transferring money - you might be able do a deal as well

However - you really should have a local account to set up direct debits for utility and other payments to have on-line access to your account etc. Local non-international charges are OK - I dont think the Spanish would put up with outrageous charges. For me personally life would be too complicated without direct debit... internet baking is a real help as well (for me) and frankly I would understand it if the companies hesitated about (or refused) setting up services with a 'foreigner' with no local banking facilities.

Someone mentioned that the Spanish are also being taken to court about these charges.. add that to the CGT court action and the Spanish seem to be really ripping off their foreign friends!

Regards
Jon

Jon-Bxl

oops just saw the typo internet baking! Now theres an idea- hook up your bread maker to the PC and take bread orders!!!

Theres a pun here about the subject, 'money' and the 'bread' in the typo.