Tax when returning to uk
 

If as resident I sell my only residence, then return to uk before July, what is the tax situation
As I will have spent less than183 days in Spain I will not be liable for declaring tax in 2015 for2014? Or will I pay for the period I lived in Spain?
I will not be liable fo cgt in Spain as over 65,tax resident and lived in the house for over 3years, so how do I declare the profit for tax relief in Spain
How do I avoid overlapping between
Spain and uk tax systems
Will I have to submit another 720 form,as due to sale and transferring proceeds back to uk, my bank account will obviously gone up by more than20,000 euros?

Re: Tax when returning to uk
 

You can't have it both ways. If you leave before the end of June, you will not be Spanish tax resident in 2014 but neither will you get the over 65 exemption as I think that only applies to you if you are tax residents at the time of the sale.

In the UK you will become tax resident from the date you return - unlike Spain the UK allows split tax years so from an income tax point of view, you will have 6 months where you may pay no tax.

If you sell the house while UK tax resident you may be liable for UK CGT.

Time for some professional advice on this - the timing is critical.

Re: Tax when returning to uk
 

Seems like you can't win! Have others experience of this?

Re: Tax when returning to uk
 

If you have spent outside 183 days in Spain in a tax year then you are not a tax resident there, and therefore would only have to declare non residents tax if you still own property there. Just been through the same myself. It coincided with the 720, so I didnt actually have to do one. I sold my villa fairly quickly in a tax year when I was not tax resident in Spain and I had 3% witheld by Hacienda which may (or may not) be refunded in the next 12 months. I broke even though, so there was no question of CGT

Re: Tax when returning to uk
 

With the taxman you never win! Particularly when you have got two of them fighting over you!

Re: Tax when returning to uk
 

Am I the only one who agonises over this? What do all the other returnees do, go back, don't mention it, and hope for the best? I've never heard anyone ask about this before;it's probably never occurred to them. Some have never registered on the Spanish tax system in all the time they've been out here, so it's no problem to them anyway, but for those who(foolishly?) tried to do things legally, it's a nightmare!

Re: Tax when returning to uk
 

Did you read my post?

Tax wasn't really a problem for us though due to us having been able to claim both Spanish and UK tax allowances. I'm not of pensionable age. On return we rang DWP and they sorted out the tax records

We transferred a 6 figure sum back to the UK, but no one asked us where it has come from and the UK tax man would not know if we had made a profit on the property or not.

Re: Tax when returning to uk
 

As I said earlier it's the timing that is critical when either leaving the UK or leaving Spain.

Not taking this into account is what produces problems for some people. It's too easy to just go ahead with the move without proper tax planning and once it is done it is usually impossible to correct it.

Selling properties or businesses can create real problems if timed wrongly. Even cashing in your pension lump sum can create problems.

At least you are thinking about it in advance. If you stay tax resident in Spain when you sell the house you will avoid both the Spanish and UK CGT problems. Get it wrong by even a few days and it could be very expensive.

If you are UK Tax resident when you sell the house you may be able to claim the allowance for your personal residence even though it was in Spain but it's a lot easier to sell it when you are tax resident in Spain then HMRC has no interest in it.

Re: Tax when returning to uk
 

How can DWP help with tax?
I'm surprised how no one queried the Origen of such a large sum.
It does seem as if selling as a tax resident is the best option though sorting out the tax declaration and having to do another 720 is a pain.
Yes mitzyboy I did read your post, but as you said it was less of a problem for you as you did not make a taxable gain

Re: Tax when returning to uk
 

When we were speaking to them about pensions they made the comment that our tax details should be amended and then put us through to another department (I know not where) who asked a few questions and told us all was sorted. The tax office has started applying tax to my wife anyway.

Do you hope / know that you will make a profit then? I felt I was lucky to get away with what I did from buying back in 2004, and the only reason we broke even really was the rates of exchange change since then.

Re: Tax when returning to uk
 

I do expect to make some profit,smaller than I would like, owing to estate agent's commission and plus valia tax.

Re: Tax when returning to uk
 

If there is a paper trail then the banks don't need to ask! We deposited bankers drafts but were quizzed about €27,000 we took over cash from Spanish bank account although it was accepted (we did have proof of withdrawal). If you are small fry in the scheme of things HMRC aren't going to try to tax you on Spanish profits. Too much scaremongering on here.

Re: Tax when returning to uk
 

Our long, recent discussions over modelo 720 demonstrated the general confusion from all sides. Because of the confusion and the acknowledged fact that we have at least one active informer on the forum, I don't think it's wise to disclose too many personal details here.

Most of us retired or semi retired expats only have one major asset after a long working life, either a property or an investment portfolio. We shouldn't risk losing either because of loose tongues.

Most of us need tax advisers if things get complicated, but I would personally never give my UK bank details, along with access codes, to the Spanish tax authorities.

Re: Tax when returning to uk
 

May I suggest for most it will not be an issue, as one only pays Captal Gains Tax where there in a Capital Gain.

I do not agree with your comment that it is "foolish" to try to do things legally.

You risk being caught and fined and if you are "lucky" enough to avoid detection you will be required to pay outstanding tax and any penalties imposed when you sell your property.

It is only a "nightmare" for those who try to evade paying tax they are due.

Re: Tax when returning to uk
 

I did not say it was foolish to do things legally. The question mark is there because, it does seem that those who do not, seem to fare better.
HBG -What choice did those of us who complied with the assets law have, other than to reveal the required details?
most who go back to the UK will have a capital gain, so the problem of what to do for the best affect tax wise, is a real one.
I do hope that all those refusing to comply with the Spanish tax laws,however unfavourable, will get their comeuppance..They've got away with it far too long!