surreygirl

I own a flat in the UK which was my own residence until 2000 when I came to Spain so I became an accidental Landlord.

I now wish to sell it as it is more aggravation then it is worth it and I am at an age that I really do not want the stress.

The problem is the amount of CG tax I have to pay to Spain if I sell it which is something like 100,000 euros.

I have looked at taking out an annuity, however I am not keen on that idea and I wonder if any posters know of a way I can pay less GC.
The Spanish authorities do not recognise that it was my main abode from 1988 until 2000 unlike the UK, but that will stop in 2020, so is it worth my coming off the tax system her and going on the tax system in the UK or can I invest in another property in the UK which is what I want to do to live in myself if I return to the UK.

Any advice would be gratefully received.

snikpoh

What do you mean by this? How do you plan achieving this?

The only way you can really do this is by leaving Spain for 6 months and return to live in the flat in the UK - isn't it?

surreygirl

What do you mean by this? How do you plan achieving this?

The only way you can really do this is by leaving Spain for 6 months and return to live in the flat in the UK - isn't it?

What I mean by that is that I would have to become resident in the UK and come off of the tax system in Spain, however I want to know if there are other options. I do not think this is the only option.

Pulaski

There are definitely other options, but none are going to be perfect, as in there will be requirements to be met, which will to some degree of cost or inconvenience you. And some alternatives depend on exactly what is permitted under Spanish law - specifically, having read a lot of posts over the years here on BE, with all due respect, I have never seen anyone post who appears to be a true tax expert on Spanish taxes. .... So I would wonder if Spain has any form of rollover relief (both the UK and US do, but they are quite different from each other in the mechanism by which they achieve it). But if Spain has such a thing, you might be able to sell your flat and "rollover" at least part of the taxable gain into another property, so the "base cost" of the new property is reduced by the gain on the old property, thereby deferring the taxable gain until the sale of the new property.

The other thought I had is that the aggravation you're experiencing might mean that you just need a better property manager, as more than 30 years after you bought your flat, it should be a decent cash cow by now, meaning that a property manager should be able to manage it more or less autonomously (without much input from you), and assuming that you have a reserve built up for random major repairs, you should be pretty much pocketing most of the rent each month, forwarded by the property manager, with the added and not inconsiderable benefit that you are avoiding having to pay a whacking tax bill in Spain.

Fred James

Pulaski

Are you assuming Brexit has already happened? If not I know that statement is incorrect.

​​​​​​I suspect that there are forms of rollover relief for capital investments of various sorts in other EU countries, perhaps including rental properties.

missile

I can sympathise with you there. I had an irate tenant who phoned me on a Friday claiming the HW / CH system had failed. The management company was closed for Christmas. After a lot of effort I found an emergency plumber who charged a small fortune only to find the fukcwit had turned off the isolation switch and blamed her kid. How a toddler managed to reach the switch is a mystery.

Fred James

If Brexit had happened then it would no longer be correct. The current situation is that you can reinvest in another EU/EEA country.

From Blevins Franks

You do not pay capital gains tax in Spain when you sell your main residence if you reinvest the money in another property to be your main home (both properties must meet certain conditions to qualify).

The property does not need to be in Spain to qualify for this relief, but it must be in an EU or European Economic Area (EEA) country. Likewise, the new home needs to be in the EU/EEA. If the UK ends up outside the EEA after Brexit, UK residents could therefore lose this main home relief in Spain.

https://www.blevinsfranks.com/news/b...ains-tax-spain

surreygirl

No I have a very good property manager, well ie he is the MA of my flat.

No I am sick of the whole thing. Leasehold is not good so many with different opinions and wanting everything,

I originally wanted to sell and buy another property Freehold, a house in Hampshire and move out of London.

I am wondering if there is another way I can do it, the only other way is to buy a annuity which I do not feel like doing. But if you purchase an annuity you do not have to pay capital gains, however I would prefer to purchase another property, a house instead of a flat. Leasehold is doing my head in, and on top of that it is a simi basement and lots of problems, damp etc. Just trying to sort it out. Not taken out a penny for years so much maintenance, either on the outside or the inside of the flat. One thing after another. Thanks for your advice though.

Well that is what I was wondering. A roll over situation!
No we do not have a reserve, there is non in the lease and although we do have a small fund it keeps getting spent on silly things that we do not need.

surreygirl

I know what you mean. It is a pain. The only thing is that I do have a good Agent who takes care of the flat, he is the best I have had, but so much to pay out all the time. I had to replace the washing machine the other day, £400 pounds and then there is the painting of the outside and the roof.£68,000 before VAT. I also purchased a shed for them last week to put their bits and bobs in! I have had some very nice tenants, but I have had some pretty awful ones.

surreygirl

Very useful Fred. Thanks for that.

Pulaski

You are focused entirely on CGT on homes, i.e. your own home, the one you live in. There is much more to it than that, ….. and my reference to Brexit has nothing to do with inter-country rollovers.

Fred James

In case you misread the original post, this thread is exclusively about homes. Of course there is more to CGT than just homes but not in this thread.

Please keep on topic.

surreygirl

Very good post Pulaski, However as I said I just wan to get rid of it. So many problems.

If you have any other ideas please let me know. I do not want to hand over 100,000 to the Spanish Government it was/is supposed to be my pension.

Pulaski

Silly me, I thought it was about a rental property investment.