# That dratted cgt- again



## extranjero (Nov 16, 2012)

Some months ago,I was heavily criticised ( unjustly, I thought) for writing about changes to cgt, seen in the Round Town news ,ie that concessions for the over 65s would be lost in changes to the law on 27 th November, Law 26/2014, and profits made from a property sale would have to be invested in an annuity, otherwise cgt would have to be paid.
There then followed a lot of discussion , and the upshot was that, a member of this forum, having read the original law, found that no changes are to be made which affect the present concessions,that over 65s have, namely,that if you are over 65, fiscally resident and have lived in your main residence for 3 plus years, no cgt is payable.
The journalist, who printed the original article, wrote another a couple of months later, stating that there would be NO change to the original situation.
Imagine my surprise then, today, when I read an article by a well known firm of solicitors, who regularly write advice columns in the expat press, stating that the changes would indeed be made, meaning that an over 65 pensioner would pay cgt on sale profits, if he did not invest the sale proceeds into s life annuity, something, I imagine most sellers would not want to do.
I am confused, now.
If true, the consequences for many could be very detrimental, if cgt has to be paid on top of the other fees already payable.


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## Alcalaina (Aug 6, 2010)

But whatever your age, you are not eligible for CGT if you sell your house and use the money to buy a new primary residence, surely?

And there will be no tax due if the value of the property has fallen since you bought it, which will be the case for the vast majority.

What did they say would happen if someone sold their house in Spain for a profit and then left the country? Would they have to pay the CGT in Spain, or in their home country?


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## Madliz (Feb 4, 2011)

I believe that, whatever your age, if you sell your primary residence you have two years within which to reinvest the proceeds in another property, without CGT liability. You would be liable for CGT on any unspent difference only.


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## extranjero (Nov 16, 2012)

Alcalaina said:


> But whatever your age, you are not eligible for CGT if you sell your house and use the money to buy a new primary residence, surely?
> 
> And there will be no tax due if the value of the property has fallen since you bought it, which will be the case for the vast majority.
> 
> What did they say would happen if someone sold their house in Spain for a profit and then left the country? Would they have to pay the CGT in Spain, or in their home country?


Even if you left the country you would be entitled to buy another house within the EU, and as long as you invested the proceeds in another main residence within two years, you would not pay cgt.
What I am referring to is the concession which over 65 s currently have, of not paying ant cgt if you are over 65, fiscally resident and lived in the property as a main residence for 3 plus years.
There still seems to be some confusion as to whether this concession remains, without the need to invest the proceeds in an annuity as was suggested.


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## Pesky Wesky (May 10, 2009)

Isn't the info here?
Tax Agency - Residences
There is a contact email too


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## Chopera (Apr 22, 2013)

I had always assumed the over 65 rule was brought in for downsizing. Up until that age people never usually realise profits from their main residence because when they sell they buy somewhere bigger. However when you downsize, usually after retirement, you will be taking some profits and it might seem unfair to "punish" pensioners for doing so.


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## mrypg9 (Apr 26, 2008)

What happens if you are over 65 and sell a property in the UK without purchasing another property?


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## Chopera (Apr 22, 2013)

mrypg9 said:


> What happens if you are over 65 and sell a property in the UK without purchasing another property?


If you are living in Spain then it won't count as your main residence anyway, so you'll have to pay CGT.


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## 90199 (Mar 21, 2010)

Chopera said:


> If you are living in Spain then it won't count as your main residence anyway, so you'll have to pay CGT.


Funny thing is CGT, a while ago I decided to get rid of an interest in a detached property, that I had purchased in 1973.

My wish was to transfer my interest as a gift to other persons, the legal team in the country where the property is, told me that I would have to have the property re valued and pay CGT on the difference between the purchase price and the current valuation.

Well I don't mind paying taxes, but there was no way I was going to pay a huge amount of money in order to give something away, so I consulted a financial adviser here in the Canary Islands, who in turn presented the problem to his legal team in London.

The outcome was that because I was domiciled in another country CGT in respect of the property I was giving away would not apply to me.

Because I was already a client, the financial advice given to me in the Canary isles was free.


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## mrypg9 (Apr 26, 2008)

Chopera said:


> If you are living in Spain then it won't count as your main residence anyway, so you'll have to pay CGT.


I don't own property any more so none of this applies to me!
We sold our UK properties over nine years ago.


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## Lynn R (Feb 21, 2014)

extranjero said:


> Imagine my surprise then, today, when I read an article by a well known firm of solicitors, who regularly write advice columns in the expat press, stating that the changes would indeed be made, meaning that an over 65 pensioner would pay cgt on sale profits, if he did not invest the sale proceeds into s life annuity, something, I imagine most sellers would not want to do.
> I am confused, now.
> .


The latest article you have read is just as wrong as the original one. Confirmation of the situation regarding CGT on sale of assets by over 65s comes right at the very end of this long article on how people are affected by the changes.-

Cuánto pagaré por IRPF si vendo mi casa antes o después de la reforma fiscal | Economía | Cinco Días

Basically, anyone over 65 who is selling their habitual residence (and meets the criteria for being considered tax resident) remains exempt from CGT on the profit even if they do not invest the proceeds in another property.

Anyone over 65 who sells any other kind of assets (investment properties, shares, etc) can also avoid paying CGT if they invest the procees of the sale in an annuity - that is no doubt what the author of the article you read was referring to, but does not seem to have made the distinction.


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## Alcalaina (Aug 6, 2010)

I guess it's in the interests of these solicitors and accountants to sow confusion!


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