# Spain tax allowances? And capital gains?



## Tortuga Torta (Jan 23, 2016)

I'm American, thinking of moving to Spain, but had a question about how taxes are done there. I found this (from Blevins Franks' website):



> *Deductions and allowances*
> 
> Various deductions and allowances are available for Spanish residents, such as payments into the Social Security system, contributions to a qualifying pension scheme and alimony and maintenance payments.
> 
> ...


So, if I understand this right, let's say my wife and I have €6,000 of income from capital gains. I am taxed at 19% on that (which is the current rate up to that amount), so the tax due is €1,140. But there is an allowance of €5,550 plus another €3,400 for the spouse, or €8,900 total, and that is a tax _credit_. So, if that were all our taxable income, we'd have no tax due, correct?

And we'd only have net tax due once our taxes surpassed that €8,900 allowance, correct?

Lastly, does anyone know if Spain uses the "basis" + "capital gain" method in computing capital gains? That is, if you have €100k in an stock, and it gets 5% in gains, you now have €105k. If you sold that stock completely, you'd get €105k in cash. But you'd only pay taxes on €5k of it, which is 4.76% of it, because €100k of it was your money and you're just transferring your capital from a stock to a bank account. 

Thanks. If the Spain forum might be a better place for this, feel free to copy/migrate it there.


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## Tortuga Torta (Jan 23, 2016)

Hmm, the more I look around the more I'm thinking that Blevins Franks is just wrong. It can't really be a tax _credit_, can it? It seems the €5,550, etc. is merely a tax _deduction _(meaning it reduces your taxable income by that amount).

If so, I am surprised they got this key detail wrong!


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## Bevdeforges (Nov 16, 2007)

In all this planning for taxes, don't forget that you are also subject to US income taxes on your worldwide income wherever you go in the world if you're a US citizen. That can make tax planning considerably more difficult - and can limit the usefulness of some international tax information that is intended for UK expats.

One thing you would need to check is the US-Spain tax treaty - each tax treaty has a large section devoted to capital gains, and this can affect the overall tax bill by a considerable amount. Also, it's possible that where you are taxed for a capital gain can depend on where the asset is located.

The other big factor is whether or not you are required to declare your worldwide income in Spain. It's doubtful that you'd be able to get a long-stay visa if you are relying on only your capital gains, so the rate you pay may well be affected by your total income, even if there is a provision for not paying tax on US pension income. 

It probably wouldn't hurt to pose this question in the Spain forum to get an idea of how the Spanish tax system works. But then ultimately you need to figure out the interaction with the US-Spain tax treaty.
Cheers,
Bev


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## baldilocks (Mar 7, 2010)

Many of us are confused about the Spanish tax system so we just let a gestor handle matters.


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