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25% pension tax free and house sale CGT

25% pension tax free and house sale CGT

Old Jan 11th 2022, 8:50 pm
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Default 25% pension tax free and house sale CGT

Very likely the information I need is in here somewhere but I'm having a struggle picking the right search term to find it.

I intend to purchase a property and move to Spain on a non lucrative visa at some point in the future. How far in advance would I need to take my pension tax free sum in the UK (to avoid it being taxable in Spain) and sell my UK house to avoid Spanish capital gains? If I sold and moved this year would I need to declare it on a tax return in Spain next year? To avoid the tax would I need to sell now then delay the move to 2023?

I appreciate taxation is very complex and I hope to discuss my personal plan with a gestor later this year, I'm just trying gain a better understanding in advance.

Thanks for any advice / links etc.
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Old Jan 12th 2022, 6:01 am
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Default Re: 25% pension tax free and house sale CGT

The safest bet is to sell this year and move next. However a sale toward the summer would mean you might not qualify as a Spanish tax resident. The problem is dependent on when the Spanish tax man wishes to designate you a tax resident(on receipt of residence or after 183 days). It is not always clear cut.
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Old Jan 14th 2022, 10:17 am
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Default Re: 25% pension tax free and house sale CGT

Good advice from Chipmonk.
Complete all your transactions by 31st Dec and move to Spain next year after 1st Jan. Clean cut, no chance of getting caught in tax web.
Dont forget to tell UK taxman you're left for Spain.
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Old Jan 15th 2022, 2:16 pm
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Default Re: 25% pension tax free and house sale CGT

No split tax years in Spain so it has to be done before end of year and then move in the next year (even coming for a holiday in the tax year when sold may be taken as being a resident for tax purpose if they are in a bad mood). Also I don't think they accept SIPP or ISA as being free of Spanish tax once resident, they really do like to take a nice chunk of people's income (and wealth) if they can, though the equivalent of council tax is much lower so I suppose there is some fairness in the system. That is the theory but if you don't declare UK CCG made prior to arrival they may not chase it up (lots of people have got away with it).

With covid, and new variants still emerging, it will be quite dangerous to sell a house and then have nowhere to go until the new tax year. The booster stops working after a few months so no knowing where things will be at the end of the year. 2025 is approx end of the UK's house price cycle, BTW, as there is an 18 year cycle from bust to boom to bust but due to the variant big cities will probably stagnate whereas coastal and country properties still have a way to go. Then there is the exchange rate to take into account...
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