angie_329

I have had advice on some of your topic.

On the UK tax side, although CCT was introduced on property sales for non residents in april 2015- you have the option ( if a non resident of some years) of having a restrospective valuation as at 6 april 2015- and only paying CGT on the gain between then and the date of sale rather than the gain over the whole period of ownership...this must be done by a chartered surveyor experienced in thse valuations- and report prepared, NOT a desk top valuation but an in depth report that passes muster with HMRC,

The market was generally at a peak in 2015 especially in London so it is likely that the value of the retrospective valuation will be LOWER than the current sale value. If this is the case you pay no CGT - you will need to supply copy of chartered surveyors analysis- and can also benefit from a capital loss on paper that may be useful in the UK in the future.I have also been advised that moving back in for a number of months is not that simple anymore, especially if the property has been let for some years, as the gain during that period could be subject to CGT.

It is better to be totally non resident during the tax year of sale. On the Spanish tax side I cannot advise, but I imagine under double taxation agreements a good accountant who is experienced in UK/Spanish tax issues may be of help as you may not have made much of a gain, if any, under UK tax law, and maybe a capital loss on paper.

You could invest the money in something relatively low risk like the Prudential that has a number of international bonds products that pay out tax free income, but of course be careful. Many advisors steer you towards products they gain most commission from. Always ensure your money is sent by you to the actual financial establishment and not via the advisor's business account.

Pulaski

I think you mean "value of the retrospective valuation will be HIGHER …".
I endorse this advice.

surreygirl

That is very useful Angie.

I will get cracking on that and see if I can find a good accountant.

Thanks so much for taking the trouble to reply.

I would leave Spain, or at least become resident in the UK for tax purposes but still come to Spain for six months of the year. although it could be difficult to return. I do enjoy benefits, but I have to say paying the Spanish Goverment 100,000 euros does not appeal to me at all.

Many thanks.

Fred James

Just remember that if you qualify as a tax resident at any time of the year you will be deemed tax resident for the whole of that year.

For example, as an existing tax resident, you must leave Spain before the end of June. If you leave a few days later you will be tax resident until the end of the year, so you would have to wait until then before selling the property. The UK does allow (by concession) split tax years, but Spain does not.

surreygirl

That is good to know Fred. I will come off the tax system here about November to give me time to get a tax number in the UK.

Thanks for the advice.

angie_329

Yes thanks for picking up on that ! Higher is correct..

angie_329

I was advised bthat the split year option does not apply to property CGT matters by the accounant UK.

angie_329

If you are going to be able to avoid large CGT in UK then you need to stay non tax resident in the year of sale ( april to april) and have been non resident for a prior 5 years. This is a tricky area.
This is what I was told. if you do become UK resident there are other deductions that can be made from CGT bill and some of them will no longer be available after april 2020.
So before you do anything get good advice. I usually visit at least 3 accountants and ask what they think overall.. Then see if any give very different advice and get a sense of who seems the most competent before choosing. Time spent and even money on advice before action is seldom wasted.

missile

Presumably you have been declaring the rental income to HMRC? They may well identify that that house has not been your primary residence for 19 years. You may still liable for CGT in the UK.

Perhaps you should seek professional advice from a UK accountant.

Patrick2976

"You could invest the money in something relatively low risk like the Prudential that has a number of international bonds products that pay out tax free income, but of course be careful. Many advisors steer you towards products they gain most commission from. Always ensure your money is sent by you to the actual financial establishment and not via the advisor's business account."

Apologies as it is a little off topic but I felt compelled to reply to this as it is somewhat inaccurate. The Prudential International Spanish bond is indeed a great investment product BUT it is NOT "tax free" - It benefits from tax deferral but withdrawals from it are subject to Spanish tax if the bond has made a capital gain. Also, properly regulated and authorised financial advisory companies do NOT hold client monies. Otherwise a very interesting thread.

surreygirl

Thank you for that Patrick. The only problem is getting out of the capital gains. the only thing I can purchase in able not to pay capital gains is in an annuity and what I am trying to get around is not paying it because I will have very little left if I have to give the Government 100,000 euros.

Patrick2976

Yes, I feel your pain. Unlike in the UK (although there was a failed plan to change this) you can sell an annuity in Spain. Rentas Vitalicias provided by Spanish Banks like BBVA can be sold on the secondary market as the insurance company (providing the annuity) is also BBVA . So in theory you may be able to mitigate the CGT with the annuity purchase and then at a later date sell it back to them. However, I imagine that may re-trigger the original CGT liability. I am looking further into this so that I can give a more definitive reply.....


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Notdunroamin

So much easier to be poor !

surreygirl

That is interesting to know. I must find out about that. It would be great if you could find out more and let me know I could go for that option.

Thanks for that.

Pilou

We were in the same position as you and because of that we left Spain. I did not want to hand over a huge sum to the Spanish government. It was our house in France and France would not tax us on the profit, but Spain would tax it. So we left! It is not fair that Spain would tax us on the profit of selling a house iwe had in France and was our main home for 20 years.