# Capital gains tax



## infomaniac (May 27, 2013)

Apologies as I have asked about this before but I'm still confused.

Can anyone explain what we'd need to do to avoid paying CGT? We've had a few hols in Spain but nothing near 183 days. We thought we'd be in Spain for Christmas but I'm not so sure if that's the best thing to do?
Also, can you advise how Spain would find out how much profit we'd made on our house?

Many thanks for any info. 

We are going to sort out a tax advisor but we need to know about CGT or we might not be moving


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## slatts (Sep 17, 2013)

I thought you did not pay CGT in the UK if it was your main home it only applied on second homes etc.


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## Megsmum (Sep 9, 2012)

slatts said:


> I thought you did not pay CGT in the UK if it was your main home it only applied on second homes etc.


You don't.... but you do pay it in Spain if you don't time your move at the right time


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## slatts (Sep 17, 2013)

Why if you are not a tax resident in Spain would you have to pay CGT on your UK property or am I reading this wrong?


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## slatts (Sep 17, 2013)

Found this on a web site for a financial adviser company Scottsdale Overseas

The Zero Tax Option

As we have already stated, by selling your UK home before you move to Spain or at least before you become tax resident in Spain and non-tax resident in the UK, there is no CGT either in Spain or the UK.


However, if you decide to retain your UK property there are certainly some tax implications that require consideration.



Income Tax


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## Overandout (Nov 10, 2012)

Exactly. The key is to get the cash from your UK house sale into your account during the fiscal year before your fist fiscal year as a tax resident in Spain.

So, if you move in what is left of 2017, you will not be a tax resident until 2018 fiscal year, so you have the rest of the year to sell up and get the cash in the bank.

If you are planning to sell up and move in 2018, take care. If the sale of the UK house is in 2018, you do not want to move before July 2018 otherwise you run the risk of CGT beong applicable as you will be a fiscal resident for all of 2018.


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## infomaniac (May 27, 2013)

Thanks Overandout, that's exactly what I needed to know. I don't really think it's feasible for us to complete the sale here and buy in Spain before the end of the year so it looks like we're snookered :-(


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## Lynn R (Feb 21, 2014)

infomaniac said:


> Thanks Overandout, that's exactly what I needed to know. I don't really think it's feasible for us to complete the sale here and buy in Spain before the end of the year so it looks like we're snookered :-(


If you could complete the sale in the UK by the end of this year and maybe rent somewhere in Spain for a few months from the start of next year (rentals for the winter months are widely available and reasonably priced, luckily) you would be OK regarding CGT liability, though.


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## Overandout (Nov 10, 2012)

infomaniac said:


> Thanks Overandout, that's exactly what I needed to know. I don't really think it's feasible for us to complete the sale here and buy in Spain before the end of the year so it looks like we're snookered :-(


I thought your buyers wanted to complete before Xmas


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## Rabbitcat (Aug 31, 2014)

If you reinvest ALL of the proceeds of the sale of your UK house-not just the profit-into the purchase of your Spanish property, there is no CGT to pay


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## infomaniac (May 27, 2013)

Lynn: I've been updating my hubby about this and he said similar to you. When exactly would we become liable for tax?

Overandout: They do! What I meant was by the time we exchange contracts here I doubt we'll have time to find somewhere and buy it before the end of the year.

Rabbitcat: We are selling here and buying a cheaper house in Spain so we can live off the difference.


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## Megsmum (Sep 9, 2012)

slatts said:


> Why if you are not a tax resident in Spain would you have to pay CGT on your UK property or am I reading this wrong?


See post below



Overandout said:


> Exactly. The key is to get the cash from your UK house sale into your account during the fiscal year before your fist fiscal year as a tax resident in Spain.
> 
> So, if you move in what is left of 2017, you will not be a tax resident until 2018 fiscal year, so you have the rest of the year to sell up and get the cash in the bank.
> 
> If you are planning to sell up and move in 2018, take care. If the sale of the UK house is in 2018, you do not want to move before July 2018 otherwise you run the risk of CGT beong applicable as you will be a fiscal resident for all of 2018.





infomaniac said:


> Lynn: I've been updating my hubby about this and he said similar to you. When exactly would we become liable for tax?
> 
> Overandout: They do! What I meant was by the time we exchange contracts here I doubt we'll have time to find somewhere and buy it before the end of the year.
> 
> Rabbitcat: We are selling here and buying a cheaper house in Spain so we can live off the difference.



We sold in September money in bank by year end...moved march following year. Therefore avoiding CGT. As OnO says. Sell and cash money before end of this year you will be fine. You may have to rent, we did for a while while we looked, the key is to sell this year and move next... creep into next year and you have to wait for the midway point. Renting in Spain considerably cheaper than U.K.


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## infomaniac (May 27, 2013)

Thanks Megsmum. Sorry to be dense but would we not be subject to tax until we actually bought a house?


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## Megsmum (Sep 9, 2012)

infomaniac said:


> Thanks Megsmum. Sorry to be dense but would we not be subject to tax until we actually bought a house?


My understanding is no. Providing you sell and put money in bank this year i.e. Before end of December 2017 then no. If you move to Spain early part of 2018.. You become fiscally resident in Spain ( remember tax year here fund January to December) and in 2019 declare your taxes for 2018. What you earn 2017 is irrelevant. If you complete your sale January 2018 then move before July then yes, if you haven't bought before next year your liable on the remaining monies.

CAVEAT. This is MY understanding and I could be wrong and if I am someone is going to let me and you know


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## Lynn R (Feb 21, 2014)

infomaniac said:


> Lynn: I've been updating my hubby about this and he said similar to you. When exactly would we become liable for tax?


If you sold your UK house before 31st December 2017 and moved to Spain you would not be tax resident in Spain for the 2017 year because you would not have been resident here for 183 days or more. So any income you received in 2017, includng the proceeds of your UK house sale, would not need to be declared in Spain.

However, if you received the proceeds of the sale on or after 1st January 2018 and subsequently moved to Spain, you would be tax resident here for the 2018 year (your first tax return becoming due by June 2019).


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## infomaniac (May 27, 2013)

Lynn R said:


> If you sold your UK house before 31st December 2017 and moved to Spain you would not be tax resident in Spain for the 2017 year because you would not have been resident here for 183 days or more. So any income you received in 2017, includng the proceeds of your UK house sale, would not need to be declared in Spain.
> 
> However, if you received the proceeds of the sale on or after 1st January 2018 and subsequently moved to Spain, you would be tax resident here for the 2018 year (your first tax return becoming due by June 2019).


Thanks Lynn...it's gradually sinking in! If we sell before end of December and bank the money can we still move to Spain or do we wait till January?


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## Megsmum (Sep 9, 2012)

infomaniac said:


> Thanks Lynn...it's gradually sinking in! If we sell before end of December and bank the money can we still move to Spain or do we wait till January?


You can move December or January, as this year you would not have fulfilled the criteria for being tax resident and if you move January, this years income is not included in your 2018 returns PROVIDING PROCEEDS FROM HOUSE ARE IN BANK BY 31DECEMBER 2017,


I remember trying to get my head around this!


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## infomaniac (May 27, 2013)

It's a minefield isn't it Megsmum!


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## Megsmum (Sep 9, 2012)

infomaniac said:


> It's a minefield isn't it Megsmum!


It is and it isn't.... you are doing exactly the right thing 
Research 
Research 
Research 

Ask question however ridiculous they may sound. You're not going to get everything right but you'll get most of it right. Be prepared for the odd hiccup after all you're moving to another country, culture lifestyle and if I maybe so bold..... spending more time with Mr Informaniac. when we retired early, spending 24/7 with each other, now that was a BIG adjustment 🤣🤣🤣


From your posts, you have a good grasp of the issues involved. Take advice from the people on here, but always remember we are offering advice solely from our own circumstances and viewpoints and more importantly our local areas.


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## infomaniac (May 27, 2013)

Thanks a lot-you've cheered me up a bit! 
We have wanted to move to Spain for over 10 years but with our buyers wanting to be in for Xmas and with us having nowhere to go I am getting stressed out already and we haven't even started yet. At the moment I could strangle Mr Infomaniac so the signs are not looking good!!


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## Megsmum (Sep 9, 2012)

infomaniac said:


> Thanks a lot-you've cheered me up a bit!
> We have wanted to move to Spain for over 10 years but with our buyers wanting to be in for Xmas and with us having nowhere to go I am getting stressed out already and we haven't even started yet. At the moment I could strangle Mr Infomaniac so the signs are not looking good!!


We completed in November, our ferry over was booked in February as I had to hand in my notice at work. We rented flat locally for three months. We cam to Spain with no where to live as such. We made contact with a lady who rented out holiday accommodation, clearly February not a busy month so we rented week by week €100 We packed up a van with suitcases, two cats and a few bits and pieces. We stayed with her for two month while we looked for our new house, which we found and had moved into by April. 

Start looking now at rentals where you want to go to. We just took the bull by the horns and went for it.


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## infomaniac (May 27, 2013)

I have a list of rentals but not many take dogs. I will make sorting that out my next task!


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## Lynn R (Feb 21, 2014)

Look on the bright side, it will be much easier and cheaper for you to find a rental for a few months starting in December or January than it would be if you sold your UK house in June and had to find accommodation in Spain at the height of the tourist season.


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## infomaniac (May 27, 2013)

Very true Lynn. It will also give us time to acclimatise ourselves (and the pooches!) to the heat. Can I just clarify one thing please? If we get everything sorted and money banked by end of 2017 can we still move or would we have to wait till 2018?


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## Megsmum (Sep 9, 2012)

infomaniac said:


> Very true Lynn. It will also give us time to acclimatise ourselves (and the pooches!) to the heat. Can I just clarify one thing please? If we get everything sorted and money banked by end of 2017 can we still move or would we have to wait till 2018?


You can move this year.


When looking for temporary accommodation this is what I did.

I also contacted holiday rentals as they are more open to shorter term rentals and in our case cheaper. I just googled and sent out various emails to owners explaining my situation


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## infomaniac (May 27, 2013)

Good idea


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## Lynn R (Feb 21, 2014)

infomaniac said:


> Very true Lynn. It will also give us time to acclimatise ourselves (and the pooches!) to the heat. Can I just clarify one thing please? If we get everything sorted and money banked by end of 2017 can we still move or would we have to wait till 2018?


Yes, you can move before the end of 2017 because you wouldn't have been resident for anywhere near 183 days this year. Whatever you do, though, don't feel pressurised into buying somewhere before you are absolutely sure it's right for you in the long term.


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## infomaniac (May 27, 2013)

Definitely not-this is to be our forever home, plus we can't afford to move again!


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## Muddy (Jan 14, 2010)

Sorry as I feel like I'm hijacking the thread a little. Happy to start a new thread Mr and Mrs Admins  ?

I feel like a complete fool as I seem to have missed out on CGT in Spain completely! Maybe I just thought CGT on only home in UK and didn't think sale here would mean tax there on that, ooops. Very stupid and just can’t understand why I didn’t come across this subject before with all the posts I’ve read, oh well.

I just been starting to talk to agents and about to book photos to be taken by one, but now I'm feeling as the original poster said "snookered"
I’ve not been back to Spain for a long time so I’ve got all my 183 days to use up before becoming tax resident?

What I had planned to do was put my UK place up for sale now and in realistic terms not expect to get the cash in bank by Jan at best. I don’t think it possible for me to sell and get cash in my bank by 31 Dec! very small chance!!
On reading all the replies here I think that leaves me open to CGT in Spain!
Would like to have got a long term rent from Dec or Jan and start looking for a home while mine is up for sale! Planned on doing a double move to rental and then onto new home making a quick exit possible.

I don’t really want to wait until half way through the year to move, but as my cash will not go anywhere as far as before due to Sterling losing ground, I can’t see how I could afford to pay CGT.
I wont be using all the profit to purchase main home, maybe around half.
I might buy a small business or purchase a small rental to create a small income and the remainder would be my savings.

So, is there any way I can avoid CGT and make the move before the mid way point of the year?

I need to speak to a tax adviser for sure, but if anyone has any thinking outside the box solutions I would very much appreciate it?

I just read something on “Rollover relief” in Spain, but I don’t think it’s relevant to a UK house sale anyway, and I don’t want to invest all the proceeds of the sale in my new property so that’s probably a dead-end!


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## sansylivin (Sep 16, 2013)

Muddy said:


> Sorry as I feel like I'm hijacking the thread a little. Happy to start a new thread Mr and Mrs Admins  ?
> 
> I feel like a complete fool as I seem to have missed out on CGT in Spain completely! Maybe I just thought CGT on only home in UK and didn't think sale here would mean tax there on that, ooops. Very stupid and just can’t understand why I didn’t come across this subject before with all the posts I’ve read, oh well.
> 
> ...


Nothing to pay just like the UK if it remains your primary residence. As with the UK rollover relief there is a 3 year deadline from when you stop living in your primary (UK) residence otherwise you can become liable. Remember CGT will be payable on the difference between what you paid and what you sell for in UK- minus what you pay for new Spanish residence. The best way to make sure is to pay for an English-speaking gestor, should only cost you E40-50 not much for piece of mind. Here is a thread from before started by Rabbotcat:

http://www.expatforum.com/expats/spain-expat-forum-expats-living-spain/787234-cgt-query.html


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## Muddy (Jan 14, 2010)

sansylivin said:


> Nothing to pay just like the UK if it remains your primary residence. As with the UK rollover relief there is a 3 year deadline from when you stop living in your primary (UK) residence otherwise you can become liable. Remember CGT will be payable on the difference between what you paid and what you sell for in UK- minus what you pay for new Spanish residence. The best way to make sure is to pay for an English-speaking gestor, should only cost you E40-50 not much for piece of mind. Here is a thread from before started by Rabbotcat:
> 
> http://www.expatforum.com/expats/spain-expat-forum-expats-living-spain/787234-cgt-query.html


Hi sansylivin
Many thanx for the reply, getting very stressed as I still don't have a full grip on all of this yet.

Yes my UK home is my only property primary residence which I will be selling to fund purchase of my yet to be found Spanish home!

I did plan to buy in Spain during 2018, I would like to rent there ASAP and start looking, but worried if doing that will be an issue if and when I get past 183 there!

*Could you clarify something please.*
When you said


> Remember CGT will be payable on the difference between what you paid and what you sell for in UK- minus what you pay for new Spanish residence.


But the post below seems to indicate if I time my move CGT is not payable?

On page 1 of the thread Megsmum posted this;


> Quote:
> Originally Posted by slatts View Post
> I thought you did not pay CGT in the UK if it was your main home it only applied on second homes etc.
> *You don't.... but you do pay it in Spain if you don't time your move at the right time*


I will do as you suggest and contact an English-speaking gestor to be 100% sure what I can expect to pay or not!

But looking at what Overandout said;


> Exactly. The key is to get the cash from your UK house sale into your account during the fiscal year before your fist fiscal year as a tax resident in Spain.
> 
> So, if you move in what is left of 2017, you will not be a tax resident until 2018 fiscal year, so you have the rest of the year to sell up and get the cash in the bank.
> 
> If you are planning to sell up and move in 2018, take care. If the sale of the UK house is in 2018, you do not want to move before July 2018 otherwise you run the risk of CGT beong applicable as you will be a fiscal resident for all of 2018.


And what Megsmum said on page 2 of the thread it seems clear if I sell my UK house and get cash in bank before end of this year I will avoid CGT in Spain!



> Megsmum. We sold in September money in bank by year end...moved march following year. Therefore avoiding CGT. As OnO says. Sell and cash money before end of this year you will be fine. You may have to rent, we did for a while while we looked, the key is to sell this year and move next... creep into next year and you have to wait for the midway point. Renting in Spain considerably cheaper than U.K.


Can anyone that has been through the same situation as I'm about to get into suggest a reliable Gestor that speaks good English?

It would be terrible if I have to put the sale of my place off and my move to Spain until later next year to avoid a big tax bill


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## sansylivin (Sep 16, 2013)

Hi,

What I meant was that CGT is only payable on the profit made between your original purchase of the house in UK and what you sell it for. So if you bought for 50K and sold for 200K the profit is 150K and that is what would be taxable not the whole 200K. Using the rollover relief if you bought a house in Spain that cost you 120K then the liable amount for CGT would be 30K.

As for the question of timing I am guessing that the question is really one of if you have the taxable 30K already in the bank while you are still not a Spanish tax resident then you could declare as saving without specifying its origin. The question is really then when you become tax resident in Spain after 183 days and you have to declare your renta (income) or 720 (assets) whether that is retrospective or only from the date of the change of tax status !!!!

Mmm sounds like one for the professionals to me- one thing is for sure trying to second guess could be an expensive mistake


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## Megsmum (Sep 9, 2012)

Sell this year... money in bank by 31st December. Move any time next year no CGT

Sell next year money in bank next year Move after the 183 day window no CGT next year i.e. After July 2nd

Sell next year money in bank next year move within the 183 day fiscal window. CGT to be paid on the difference in selling and purchase price


We sold December 2013. Moved in March 2014. Therefore no CGT as not fiscally resident here in 2013. Remembering tax year here runs Jan to December


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## Muddy (Jan 14, 2010)

Megsmum said:


> Sell this year... money in bank by 31st December. Move any time next year no CGT
> 
> Sell next year money in bank next year Move after the 183 day window no CGT next year i.e. After July 2nd
> 
> ...


Thanx very much Megsmum for the extremely clear and informative reply.
I'm feeling more than a little upset now as don't think it possible for me to get a sale that quick and cash in back this year 
I'll give it a go but would need to pull out of sale if it couldn't go through quickly and that puts pressure on me to bring price down more than I can afford to.
Plus I wouldn't really want to mess people about.
Now I know why my Doc just said I'm very stressed..:frusty:


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## Megsmum (Sep 9, 2012)

Muddy said:


> Thanx very much Megsmum for the extremely clear and informative reply.
> I'm feeling more than a little upset now as don't think it possible for me to get a sale that quick and cash in back this year
> I'll give it a go but would need to pull out of sale if it couldn't go through quickly and that puts pressure on me to bring price down more than I can afford to.
> Plus I wouldn't really want to mess people about.
> Now I know why my Doc just said I'm very stressed..:frusty:


Better to be upset and with knowledge now than upset next year with a tax bill.

But please remember we are not experts.....hoping someone will back my post up 

Can't you rent in U.K. for a while, while you look.?


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## Muddy (Jan 14, 2010)

Megsmum said:


> Better to be upset and with knowledge now than upset next year with a tax bill.
> 
> But please remember we are not experts.....hoping someone will back my post up
> 
> Can't you rent in U.K. for a while, while you look.?


Hi Megsmum
Yes 100% correct, it could have been a lot worse finding out later  just going through the pull my hair out tantrum phase at the moment.

I'm hoping someone will suggest an English speaking Gestor I can call up for a chat and confirm what you have said, but a few other posts in the thread seem to back up your way of thinking! But I will have a chat with a Gestor to verify.

Yes renting here might be an option but costly perhaps, I just wanted to be over early next year so I had a chance to buy and settle in and enjoy the summer and not rush things looking for a place as I want it to be my last move!

Renting here will not be cheap, plus I may need storage also.
I guess I could still come over and start renting week by week, but whatever time I spend I would then need to make sure I stay out of Spain for any days that would take me over the 183 days during 2018?
Or does that sound really stupid?
Lot of messing about, but maybe an option?
Could I skip across the boarder to France or Gibraltar perhaps?


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## Muddy (Jan 14, 2010)

Just thought I would give a quick follow-up on my situation.
I contacted a Spanish lawyer to confirm various tax points, time spent in Spain for that tax year etc so I'm sure what Megsmum said was correct, thank you.

Bad news, my buyer failed several mortgage applications, I went through several surveyor/bank valuations etc. It would seem the buyer was not being totally truthful about their finances! The estate agent never carried out proper checks on the buyer but told me the mortgage was in place, they even told me all the way to end of march I would complete, not exchange, but complete! So I was fooled by the buyers and a useless agent one could say!
Note to anyone selling.
Always make sure your buyer sits down with your estate agents broker, they don't have to use them of course but you should know early on if they're legit!
If the buyer refuses to sit down with them keep property on market and move on!

Some good news (I hope)
I've sold my property again having to use a new agent, hoping it will go ok this time around.

I still have a huge amount to do.
Need to find a rental, need to find someone to move all my stuff across (only half packed), and need to find out how best to bring my car across (or if I should)

I'm under some pressure from buyer to get out pretty quick, so not sure how I'm going to manage this as yet. I want to keep them happy, but at the same time my stress levels are way out of control.

I'll probably start a new post and ask a few questions on the above, any info and advice most welcome.


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## andyviola (Aug 11, 2018)

how did you get on Muddy?


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## High flyer (Jun 22, 2018)

Rabbitcat said:


> If you reinvest ALL of the proceeds of the sale of your UK house-not just the profit-into the purchase of your Spanish property, there is no CGT to pay


We own a property in Spain already, next year we intend selling our U.K. property and purchase a house in Spain also, then sell the existing Spanish property and invest that money to give us cash to bump up our pensions, reform the new property etc. How would this scenario be viewed as far as CGT is concerned? Many thanks


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