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Can someone please talk me through the capital gains tax that will need to be paid in Spain arising from the sale of a UK property.
I am tax resident in Spain and have been letting the house in UK for a number of years.

sncollins

The best advice I can give you is consult with a UK tax accountant. Osborne has changed the law on CGT on property reasonably significantly in the last couple of budgets and payment is required really quite soon (I think something like 30 days) after completion.

The calculation is also not straightforward, as the gain during the period when you were living in it is exempt and there are other reliefs. However, from memory, the capital gain is now time apportioned on a straight line basis over the total period of your ownership, rather than using the actual market values on the actual dates relevant things (buying, moving out etc) happened.

Disclaimer - I am not a tax accountant, so don't rely on me! It would be better to pay someone a few hundred quid to get it right rather than submit a calculation to HMRC (as you do have to do) that they then reject.

stevesainty

Thank you for your input sncollins, but I´m a bit skeptical about your bone fides. A new member with only two posts, one in reply to my problem and one in reply to a Brazilian problem??

Fred James

The gain will be calculated in the same way it would be if it was a Spanish property and the taxes will be the same.

The Double Taxation Treaty does not exempt it from UK CGT (unlike some other types of gain) so UK tax will also have to be paid, but it can be offset against any Spanish CGT due.

chopera

My understanding was that if you are non-UK-resident then the UK CGT on rental property is based only on gains in the property's value from April 6th 2015. So probably not that much in most cases. The Spanish CGT would be based on increases in value from when the property became a rental property. Probably considerably more in most cases. Is this not correct?

Fred James

Yes, the UK tax will be pretty small because, as you say, the clock has only just started ticking.

As for the Spanish tax, it will be a lot higher, but there are many factors to take into account. It may have been bought as a buy to let property or it may have been the owners UK residence for a time which will affect the tax.

wilsman77

Just don't pay it and do a runner…