Capital gains tax advice

Posted: Sat Jan 15, 2022 9:03pm

6 replies228 views6 members subscribed

Justin2021

Posts: 17

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Joined: 9 Mar 2021

I am moving to costa Blanca around April this year on a NLV. Just awaiting sale of my home, this being my main and sole property.

I will be buying a house in Spain when we get there with the funds from the sale, although the house in Spain will be cheaper than the money from my uk sale . A very helpful lady has suggested I may be subject to capital gains tax in Spain once I take up residencia during this year. Does CGT apply to selling your main residence in uk, moving to Spain and then buying a house there?

Can anyone confirm, from a position of knowledge , if this is the case ? I will be checking with my Spanish lawyer next week but it’s playing on my mind. Thank you

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Posted: Sat Jan 15, 2022 9:34pm

Kelvin1960

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Posted: Sat Jan 15, 2022 9:34pm

If you are a tax-Resident in Spain in the calendar year (Jan-Dec) that you sell your UK home, you will be liable for CGT in Spain on the profit generated by the sale.

If you gain your TIE between now and June '22, you will be tax-Resident in Spain w.e.f. 1/1/22.

If you gain your TIE between July and December '22, you will be tax-Resident in Spain w.e.f. 1/1/23.

Take care with the dates.

Posted: Sun Jan 16, 2022 10:37am

Darro

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Posted: Sun Jan 16, 2022 10:37am

From your post it sounds like you've either already got your NLV or are expecting it very shortly.

Once a visa is granted you have 90 days in which to travel to Spain and then 30 days in which to apply for residency and that's a time frame which does not afford you the opportunity to push matters into the 2nd half of the year. Note residency effectively commences on the day the application is made not the date the TIE is issued.

To put it another way, if your visa is dated before Feb 1st. then short of postponing your departure from UK, and as a consequence having your visa expire and be reapplied for, I'm not sure there is any other way to avoid the CGT catch.

I believe (but don't quote me! ) if you invest the entirety of the proceeds from a UK sale in a property in Spain that exonerates CGT.

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Posted: Sun Feb 6, 2022 6:47pm

William 58

Posts: 60

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Location: Playa Flamenca

Joined: 19 Apr 2019

Posted: Sun Feb 6, 2022 6:47pm

Justin2021 wrote on Sat Jan 15, 2022 9:03pm:
I am moving to costa Blanca around April this year on a NLV. Just awaiting sale of my home, this being my main and sole property.
I will be buying a house in Spain when we get there with the funds from the sale, although the house in Spain will be cheaper than the money from my uk sale . A very helpful lady has suggested I may be subject to capital gains tax in Spain once I take up residencia during this year. Does CGT appl...

Read more...

...y to selling your main residence in uk, moving to Spain and then buying a house there?
Can anyone confirm, from a position of knowledge , if this is the case ? I will be checking with my Spanish lawyer next week but it’s playing on my mind. Thank you

Justin,

I`m going to be in the same position. It looks like timing is all important.

I already have a flat in Spain and plan to apply for NLV this year.

I think I would need to sell in UK before moving to Spain, under the NLV, to avoid Spanish CGT. Obviously I`d need to apply for the NLV before selling up ( in case it fell through) meaning everything would need to be completed within 3 months.

Any thoughts/advice anyone?

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Posted: Sun Feb 6, 2022 6:55pm

Justin2021

Original Poster

Posts: 17

4 helpful points

Location: Albatera

Joined: 9 Mar 2021

Posted: Sun Feb 6, 2022 6:55pm

William 58 wrote on Sun Feb 6, 2022 6:47pm:
Justin,
I`m going to be in the same position. It looks like timing is all important.

Read more...

I already have a flat in Spain and plan to apply for NLV this year.
I think I would need to sell in UK before moving to Spain, under the NLV, to avoid Spanish CGT. Obviously I`d need to apply for the NLV before selling up ( in case it fell through) meaning everything would need to be completed within 3 months.
Any thoughts/advice anyone?

Hi tbh I’m totally confused I have contacted a Spanish accountant who says I would be liable to CGT on the profit from buying and selling my uk property . However others on here have said if I sell before 30th June and move from 1st July onwards then there will be no CGT liability ? Our very experienced English estate agents in Spain say we are not liable to CGT. Also our friends moved 2 yrs ago and haven’t paid it

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Posted: Sun Feb 6, 2022 7:15pm

William 58

Posts: 60

10 helpful points

Location: Playa Flamenca

Joined: 19 Apr 2019

Posted: Sun Feb 6, 2022 7:15pm

Justin2021 wrote on Sun Feb 6, 2022 6:55pm:
Hi tbh I’m totally confused I have contacted a Spanish accountant who says I would be liable to CGT on the profit from buying and selling my uk property . However others on here have said if I sell before 30th June and move from 1st July onwards then there will be no CGT liability ? Our v...

Read more...

...ery experienced English estate agents in Spain say we are not liable to CGT. Also our friends moved 2 yrs ago and haven’t paid it

Justin,

I`m confused too.

The possibility of paying CGT and the cost of the NLV is making it more expensive than I initially budgeted for.

I`m going to email my tax adviser (for non-resident tax) and see what his response is.

I reply once known.

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Posted: Mon Feb 7, 2022 10:45am

Pacoboy

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Location: Algorfa

Joined: 11 May 2018

Posted: Mon Feb 7, 2022 10:45am

Justin2021 wrote on Sat Jan 15, 2022 9:03pm:
I am moving to costa Blanca around April this year on a NLV. Just awaiting sale of my home, this being my main and sole property.
I will be buying a house in Spain when we get there with the funds from the sale, although the house in Spain will be cheaper than the money from my uk sale . A very helpful lady has suggested I may be subject to capital gains tax in Spain once I take up residencia during this year. Does CGT appl...

Read more...

...y to selling your main residence in uk, moving to Spain and then buying a house there?
Can anyone confirm, from a position of knowledge , if this is the case ? I will be checking with my Spanish lawyer next week but it’s playing on my mind. Thank you

If you a Spanish non resident then no CGT applies