britishbull

Hi, only own one house in UK (and none in Spain) and am resident in UK, no taxes to pay when I sell in UK but because of Brexit only have to the end of the year to move to Spain, so same tax year but will be arriving after I have banked the money in the UK (and will not visit Spain this year until after sale). Anyone done the same and had to pay CGT in Spain or does that liability start from the arrival date rather than start of tax year? Capital gain will be around 90k and have owned the house for four years eight months.

Fred James

If the UK property was your permanent home and you reinvest the proceeds of the sale in a new home in Spain there will be no Spanish CGT to pay. If you don't invest the whole amount, you will pay CGT on the part that you did not reinvest. You have 2 years to do this.

Notdunroamin

A bit of lateral thinking.

If needing to move while the door is still open but faced with a CGT bill why not sell in UK for exactly what you paid?

If you're going to have to kiss goodbye to £xx,000 then better to give a lucky buyer the benefit rather than the grasping Spanish taxman who has no moral right to tax people in that way.

Making the buyer ​​​​​​pay all the costs of the transaction will offset a little of the loss, at a bargain price there shouldn't be too much difficulty in persuading them to do that. ​

el collado kid

WE sold our house in the UK in the August bought a rustic finca in october no capital gains tax.This was in 2015 still in sunny spain and do not look back.Always with a smile and a tan,Perfect

bob_day

I'm no expert, but surely if you sell the house and move to spain during the 2nd half of the year then there would be no cgt payable in spain as you wouldn't be tax resident until next year. Of course our beloved uk gov may want a piece of the pie in the meantime.

missile

What did you pay for house?
What will you sell it for minus costs?
What do you estimate your gain would be?
Unless you stand to gain several thousand is it worth worrying about?

…. and as bob_day said I don't think you will be liable for any gain made if you become tax resident, in 2021.

I would caution against rushing to sell and buy in a hurry.

britishbull

The core of the question is whether the Spanish govn accepts split tax years (Portugal does for instance) so that the Spanish tax year would then start when you arrive (and the British one finish when you leave the UK) but from what I have read it does seem that if I arrived in 2020 then the first tax return done in 2021 would have to include all transactions from 2020 regardless of when I arrive. If I sell the house in say August 2020 and don't come to Spain until 2021 then I will not get the benefits of arriving during the transition period so that won't work. I can sell the house and buy a similar priced one in Spain and avoid Spanish CGT but one of the good things about Spain is much cheaper property so that would be a bit silly. If I don't sell my house and rent it out then the property would become liable for CGT in the UK (George's Osborne's new law in 2015) if I sell it later. The answer may be to go to Portugal! I suspect a lot of Brits have just chanced it and not mentioned the house sale in the tax return (if it is not included in the UK tax return because no tax to pay then it may not be in whatever system the Spanish use to cross-check).

snikpoh

Spain does NOT do split tax years. Arrive any time before June and you are tax resident for the entire year

britishbull

ignore

britishbull

so you are saying post June you would not be considered resident because less than 183 days in a tax year even if you have a new home in Spain (and none in the UK) from say Sept onwards?

Notdunroamin

It's not just about 183 days, if you move to Spain to live here then whenever in the year that is you can be considered resident from day one.

bob_day

I'm still not an expert but i believe that if you move to spain back end of 2020, you will not be tax resident until 2021 and will therefore file your first tax return in 2022 which would be for 2021 income..

Feel free to shoot me down in flames.

britishbull

Probably depends how vigilant the Spanish tax inspector is and what info he gets from the UK on whether they will do a tax grab. To be honest, having looked at how confiscatory the tax rates are I will probably not bother. The UK council tax is a rip-off but the ability to put your money in ISA's and SIPP's means it is quite easy to avoid tax if living off investments.