Is it better to sell up in the UK completely or buy a small place just in case? Can the Spanish Government tax your English assets?

In short, if you are paying uk tax on your uk assets/ income, you will not be subject to Spanish taxation on these. You will be subject to tax on your Spanish assets/ income, including capital gains tax on your primary/ sole residence should you sell . You may want to think very carefully about inheritance tax on your Spanish property, many expats over 70 I know have sold their properties and are renting because of this. The best information available is from the British Consulate on the gov.uk website. They are very good at answering questions not covered in their website ( which is pretty damned good)

caroline

Thank you Caroline i will check it out.

Not sure about the taxation issue but a good fiscal representative would give you this info. You are no doubt paying non-resident tax on your holiday home now, so whoever does your tax for that should be able to help you there.

As to whether to keep a small property in the UK I would say most definitely yes. We are non resident but quite a number of our neighbours who live full time in Spain have wished they had done that - Life changes,  health changes and we never know what's around the corner. Any property in the UK is an investment anyway. Properties in Spain in the last few years have not been the investment they were over 10 years ago.

It's a perfect time to bag a bargain and that's good but it cannot be guaranteed that the property bought now in Spain will go up much in value and if UK properties continue to rise, which is almost guaranteed, then without a bolt hole in the UK it could be difficult to go back if need be.

Talking from the experience of our resident neighbours, some of whom would love to go back to the UK for various reasons as much as they have loved living in Spain, the consensus is, if at all possible, to not burn your bridges in the UK.

Hope this helps.

Jan

Ps. Just found this from my fiscal rep that may help:

http://www.abacoadvisers.com/spain_explained/taxes/news/all-you-need-know-about-resident-taxes-spain 

Hi Ron

I am collaborator of the Tax Office and registered in the Economist Bar Association

I will assist you in all related to the Non-Resident and Resident taxes.

Just contact me and If you find it convenience, then we can meet and prepare a fiscal plan:

-Pension

-Property Incomes

-Inheritance and donation

-Asset report

Regards

To try and make things crystal clear:

As a non-resident, you submit an annual tax return and pay a small amount of tax based on the land registry value of your property.

If you become resident, then you pay tax in Spain on all of your income, unless you have a pension arising from what is classed as government employment in the UK (armed forces, civil service, etc). Any tax paid in the UK can be offset against the tax due in Spain.

If you own property in Spain, it's better to own it in joint names to ease any inheritance tax liability.

If you're non-resident, then inheritance tax is due only on assets held in Spain.

If you're resident, then inheritance tax is due on assets held in both Spain and the UK. The dual-taxation treaty does not cover inheritance tax. In Valencia, subject to certain qualifying criteria, there's relief on almost all inheritance tax between close family members.

I agree with Jan - if you can afford to, keep a bolt hole in the UK. I can't fault the Spanish health system, but it doesn't cover long-term caring.

Thank you all for your very useful replies its given me a lot to think about.