Re: Black Money
 

Only if you were over 65.

If you were under 65 then you would have to reinvest.

It's just the 3 year rule that changes if you can prove that you need to move.

A friend bought a house and started to suffer from severe hay fever. The doctor advised him to move and he wrote a letter for the tax office to that effect.

Re: Black Money
 

Thanks Fred for your rapid reply.

So as I see it when we sell we have four options, which generate varying amounts of CGT. Three of them are legal!

1. Sell the place when we are ready, don’t re-invest and pay shedloads of tax.
2. Sell the place, re-invest the whole amount in another property (no black money this time!), stay there three years, sell up and pay a small amount of tax.
3. Sell up when my husband is 65 in January 2014 (just over six years), don’t reinvest and pay no tax.
(if we both have to be 65 then we wait one more year until January.2015 when I will be 65)..
4. Sell up, say we are going to reinvest, disappear to the UK and never darken Spain’s doors again (no tax, but illegal).

Have I got that right?

If so, it’ll probably be option three then!

Re: Black Money
 

Just be careful of the above...

I don't know how 'on top of things' the tax man is in the UK for European issues but... 2 years ago I bought a part for a computer from Germany on the internet (I am a resident in Spain), I never paid IVA (VAT) on the purchase and just filled in my address and name for the CC purchase. 9 months later I got a letter from the hacienda asking about why the purchase and IVA was not declared (paid to the hacienda) for the purchase as it wasn't in Germany, to cut a long story short... I visited the hacienda 3 times and finally wrote them a letter then never heard any more about it, brussels had notified the Spanish tax authorities to the purchase having no IVA attached along with my name, address, amount and date.

The IVA involved.... 28.80 euros

Re: Black Money
 

Seems the best option to me. You're not planning to leave Spain are you?

Re: Black Money
 

At some point we will spend more time in the UK, but will make sure this is our residence until my husband is 65.

Then we can sell if we wish to. We have no plans to sell at the moment,although we will at some point in the future. I just wanted to get things clarified for when we did.

Thanks for your help, you've been terrific!

Econ: thanks for your input, there is not much chance we will run off and leave tax unpaid, I would find it far too stressful! That option was a bit tongue-in -cheek!

Re: Black Money
 

A tempting option though.... I wasn't casting my opinion on doing it, I was just showing how much more than we think that we are now under the control of big brother.

Re: Black Money
 

Hi Scampicat, Have'nt been on 'expat' site for ages & just noticed your
comments regarding 'black'.

My friend, who bought a house in same region as you, also vastly
underdeclared the price, not her fault, she thought having a solicitor, notary,
etc meant it was perfectly ok to do this.

She has been worried sick ever since that the taxman will catch up
with her & she does'nt have any money to pay fines etc.

The other problem is her escritura is showing her property as being much
smaller than it actually is & the valor catastral is showing the size as
larger.

She's been told she may have to pay extra tax & a lot of money to a
lawyer to get this sorted. Anyone else heard of this problem ?

Re: Black Money
 

Yes, we vastly underdeclared for similar reasons.

All I can say is we have been here over three years and paid rates, etc on the property, no-one has come after us about the 'black' money - hopefully they never will.

As to the tax issue I'm afraid I have no idea, but I'm sure other people on the site will have, so...watch this space!

Re: Black Money
 

She may only have a problem if selling.
She will have to do the same and sell at a low price plus cash or she will pay tax on the difference.