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Residencia and UK property Ownership

Posted: Fri Aug 23, 2019 7:45pm
9 replies648 views7 members subscribed
jacquigem

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Hi we are considering residencia in the event of a no deal Brexit .

We own a property in the Uk which we are trying to sell

We have been told that if we get residencia before the property selly then the Spanish Tax Man will want 20% of its value, (not profit)

Can anyone confirm or deny ?

Thanks   

jimtaylor

Posted: Sat Aug 24, 2019 4:53am

jimtaylor

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Posted: Sat Aug 24, 2019 4:53am

I haven't got time to check the details, and it can be a messy calculation, but the tax is on the increase in value and not on the sale price.

CGT can be charged in Spain if you're a fiscal resident in Spain at the time of the sale. Having or not having a residency certificate is immaterial.

ldp

Posted: Sat Aug 24, 2019 9:50am

ldp

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Posted: Sat Aug 24, 2019 9:50am

We were lucky as we did not know this at the time.

Sold in UK in one Spanish tax year, moved and became residents and fiscal residents the following tax year

paulsav

Posted: Sat Aug 24, 2019 10:42am

paulsav

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Posted: Sat Aug 24, 2019 10:42am

As Spanish tax year is from Jan-Dec, if you spend more than 183 days in Spain in a year you are then deemed a Spanish tax resident and has nothing to do with residency. However if you become a resident your residency is conditional that you dont spend more than 6months out of Spain per year so the 2 whilst being seperate issues go side by side. If you become a resident after 183 days have passed in the year then you wouldnt become a tax resident until the next year so sell within 2nd half of year but dont go for residency until 6mnths have passed. If you obtained residency from now(seems difficult with appointments scarce) but sold house in Nov/Dec, you wouldnt be liable for CGT, which is only on the profit not value. After Brexit rate for tax may rise from 19% to 24%. Its all about timing. Anyone selling early in year a Uk property should not obtain residency until after the 183days have passed, even if it means a short stay with Uk relatives or short rental out of Spain before applying. Its also important to count any stays prior to obtaining residency in that same year as it all counts to the 183days.

Hope this helps to explain

Pauline.

jacquigem

Posted: Sun Sep 8, 2019 5:32pm

jacquigem

Original Poster

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Posted: Sun Sep 8, 2019 5:32pm

Thanks Pauline , it seems to confirm the importance of timing.

One thing I did note was that tax charged on capital gains. There will be no capital gains as we will be likely to be selling at an overall loss. So maybe nothing to worry about ?

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jimtaylor

Posted: Tue Sep 10, 2019 5:20pm

jimtaylor

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Posted: Tue Sep 10, 2019 5:20pm

You may be charged plusvalía - the tax on notional increase in the value of the land. Many people have successfully contested this.

jacquigem

Posted: Thu Sep 19, 2019 4:15pm

jacquigem

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Location: La Marina

Joined: 17 Jan 2017

Posted: Thu Sep 19, 2019 4:15pm

Thanks Jim , we are talking about selling a UK property , so they might still try to charge me Plusvalia on a notional increase in land value even if the the overall sale price will be below the purchase price ? 

jimtaylor

Posted: Thu Sep 19, 2019 5:10pm

jimtaylor

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Posted: Thu Sep 19, 2019 5:10pm

Strictly speaking, if you're already fiscally resident here, irrespective of whether or not you have residency, then you will be liable to CGT. Although the UK and Spain do exchange data, the volume of this is so large that's unlikely that Agencia Tributaria would find out about the sale, so you might get away with it.

jacquigem

Posted: Fri Sep 20, 2019 2:52pm

jacquigem

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Posts: 40

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Location: La Marina

Joined: 17 Jan 2017

Posted: Fri Sep 20, 2019 2:52pm

Thanks Jim , we do keep our visits to less than 6 months so presume we are not fiscally resident. That would change if we went for residencia

jimtaylor

Posted: Fri Sep 20, 2019 4:03pm

jimtaylor

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Posted: Fri Sep 20, 2019 4:03pm

That's correct. As long as you keep your visits to less than 183 days in a calendar year, you're not fiscally resident here. 

People have got away with exceeding that for years, as the length of stay of EU citizens isn't monitored, but post-Brexit then length of stay will be monitored.

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