Posted: Sat Sep 24, 2022 3:20pm
Hi Petedaniel,
If you don't mind me asking, how old are you? If you're over 65 years old, as a resident in Spain you are not required to pay Capital Gains Tax, so long as you've lived in the property as your sole, main residence for a minimum of three years prior to its sale. Also, as Relyat has suggested, if you purchase another home as your sole, main residence using the proceeds from the sale of your current property that you also used as your sole, main residence, you are legally exempt from paying CGT.
Have you ever submitted a tax return in Spain, and have you submitted one in any of the last 5 years? All too often, Spanish lawyers will suggest that a client who earns less than the taxable threshold does not need to submit an annual tax return. This is poor advice, especially once a UK citizen resident in Spain becomes a pensioner, as your earnings are linked to the amount you are expected to contribute to the cost of prescriptions, so it's beneficial for low income earners to submit at least one tax return as it could result in a prescription charge of 10% being reduced to zero. Most importantly in your case, it proves that you are tax resident in Spain.
The crucial point is whether or not you are still tax resident in Spain? Do you know precisely how long you have been out of Spain in the last 5 years and do you have documentation to prove it, such as travel documentation?
Kind regards,
Kim