# Capital Gains Tax sale of UK property



## Juan C (Sep 4, 2017)

If one moves to Spain (so it becomes centre of economic activities) in say Sept 2018 and thus becomes tax resident. 

I understand that when they make their Spanish tax declaration in 2019 they must show maybe all their worldwide income for 2018

If one sells their UK family home after moving to Spain, say in December 2018 and do not use any of the proceeds to buy a family home in Spain, are they liable for CGT in Spain on the sale of that property?

I have researched this on line but cannot clear information. 

I would be grateful for advice in general, and in particular from anyone who has done a similar thing and has/ or has not declared the sale to Hacienda.

Thanks


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## snikpoh (Nov 19, 2007)

If you move over in Sept 2018 then you aren't actually tax resident until 2019 and so your first return will need to be submitted in 2020 (unless you are working in Spain).

Yes, CGT can be an issue - seek professional advice.


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## Muddy (Jan 14, 2010)

Juan C said:


> If one moves to Spain (so it becomes centre of economic activities) in say Sept 2018 and thus becomes tax resident.
> 
> I understand that when they make their Spanish tax declaration in 2019 they must show maybe all their worldwide income for 2018
> 
> ...


I've been stressing over this CGT question for a long while.
You must speak with a Spanish tax expert to be sure you don't end up losing a lot of money.

This thread may help, but still you must do your own checks, everyone's situation is different, so have a chat with a lawyer like I did etc.

I did get some clear advice on this thread below and verified that with a Spanish lawyer, but everyone must do that in this situation, far too much to lose if you get it wrong!
https://www.expatforum.com/expats/s...1348466-capital-gains-tax-4.html#post13480689

I'm still in UK, looking for a rental in Spain right now so I have not been through the process as yet!
So please double check anything you read here or anywhere else with a Spanish layer!
It is a big worry, so much money can be lost getting this wrong.
Timing is most important.
Note, that advice was just before end of last year 2017, keep that in mind when reading.
Key points are, if you are selling now while you're still a UK tax resident!
Moving to Spain this year now means you (should) be spending less than 182 days in Spain in 2018! I would suggest you tot up any days spent in Spain this year on holiday or viewing trips and add that on to any days remaining to end of December so not going over the 6 month window of time spent in Spain this year!
It might not be necessary to delay a move date, but I wouldn't risk it. If you can state in future clearly that your total days in Spain for 2018 were less than 6 months then it should make things simpler!


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## Chancerz (Feb 12, 2017)

Always check everything with a tax specialist before you make any decision.

From what i asked my accountant a few months ago (I need to double check this again for clarity) he told me something along the lines of: I would not be liable for Spanish CGT if I sold my property in the UK before I became a Spanish resident. If i did it after i would be liable for double taxation in UK and Spain. 

Alternatively, if you hold your asset in a Ltd company there is a way around paying CGT in Spain if you sell after becoming resident.

I know this is vague but it should give you some substance to talk to your tax specialist about.

Hope this helps


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## Juan C (Sep 4, 2017)

_If one moves to Spain (so it becomes centre of *economic activities*) in say Sept 2018 and thus becomes tax resident.
_

Sorry if that was not clear but that was meaning working in Spain, probably as Autónomo (self employed). 

So as I understand it, Tax Resident immediately.

I have consulted several 'professionals' and have had a variety of different answers, which is why I decided to seek information from people who had been down that road.

Thanks again everyone


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## Megsmum (Sep 9, 2012)

Chancerz said:


> Always check everything with a tax specialist before you make any decision.
> 
> From what i asked my accountant a few months ago (I need to double check this again for clarity) he told me something along the lines of: I would not be liable for Spanish CGT if I sold my property in the UK before I became a Spanish resident. If i did it after i would be liable for double taxation in UK and Spain.
> 
> ...


No that’s not correct as such!

It all depends on when you move and become tax resident in Spain ie the 180 days 


Example 

Sell house 2018 and complete before December 31st 2018

Move to Spain after the 180 days in 2019. You are not liable for CGT. As you will not be deemed tax resident in 2019

Move before the 180 days you are tax resident BUT as the tax year runs. Jan 1st to December income earns in 2018 is not declared 

Sell house but do not complete until 2019

Move to Spain after the 180 days, nothing to declare as again you’re not deemed tax resident in 2019 

Move to Spain before the 180 days you’re deemed tax resident and therefore any income January to December including the sale of the house is declarable 


Timing is everything 

That’s my understanding, I’m no expert, but that’s how we avoided paying CGT here 

Two choices Sold house the year before we came or sold house and moved over after the 180 days tax resident rule


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## Rich & Wendy (May 28, 2018)

So, just to confirm what I've read - if we sell our house for £150K, then move to Spain and buy for £250K, the tax situation becomes irrelevant ?


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## snikpoh (Nov 19, 2007)

Rich & Wendy said:


> So, just to confirm what I've read - if we sell our house for £150K, then move to Spain and buy for £250K, the tax situation becomes irrelevant ?


If you do it before next March as it's an EU ruling (ISTR)


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## Megsmum (Sep 9, 2012)

Rich & Wendy said:


> So, just to confirm what I've read - if we sell our house for £150K, then move to Spain and buy for £250K, the tax situation becomes irrelevant ?


Providing you don’t move In the year you become tax resident.


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## Rich & Wendy (May 28, 2018)

But I thought if you buy Spanish property in the same tax year you are no longer liable for tax ?


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## snikpoh (Nov 19, 2007)

Rich & Wendy said:


> But I thought if you buy Spanish property in the same tax year you are no longer liable for tax ?


Correct, if you re-invest in another HOME within the EU, then there should be no CGT to pay.


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## Rich & Wendy (May 28, 2018)

Any idea if the same rule will apply once we're not in the EU anymore, ie, we sell in the UK in 2020, move over to Spain and buy for a higher price than we sell ours for ?


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## Lynn R (Feb 21, 2014)

Rich & Wendy said:


> Any idea if the same rule will apply once we're not in the EU anymore, ie, we sell in the UK in 2020, move over to Spain and buy for a higher price than we sell ours for ?


No, in short - it's all part of the fog of uncertainty surrounding Brexit.


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## DawnColin (Jul 12, 2018)

Our house sale isn't scheduled to go through until mid to late March (chain and UK property process permitting of course ) and we plan to rent in Spain for at least 12 months before we commit to buy. 

Assuming we will also be subject to the Spanish wealth tax when we are residents, which will include the cash we have from our house until we buy something (which incidentally isn't subject to CGT in the UK) - I can't get my head around how it could be subject to CGT in Spain.

Sorry if I am being thick, but as this is pretty important I thought I would ask. I am seeking professional advice as well but you guys have experience which is almost as good in my view


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## snikpoh (Nov 19, 2007)

DawnColin said:


> Our house sale isn't scheduled to go through until mid to late March (chain and UK property process permitting of course ) and we plan to rent in Spain for at least 12 months before we commit to buy.
> 
> Assuming we will also be subject to the Spanish wealth tax when we are residents, which will include the cash we have from our house until we buy something (which incidentally isn't subject to CGT in the UK) - I can't get my head around how it could be subject to CGT in Spain.
> 
> Sorry if I am being thick, but as this is pretty important I thought I would ask. I am seeking professional advice as well but you guys have experience which is almost as good in my view


As a Spanish resident and once you are considered a tax resident, this is for the complete tax year. So, for example, if you are tax resident on 1st July, then you are liable for tax for the complete year (1st Jan to 31st Dec). This means that if you sell in March then you will still be liable for Spanish CGT as you sold the UK property whilst a Spanish tax resident.

Also, are you aware of wealth tax limits? They don't kick in until you have assets in excess of 700k - each. You also get an allowance of 300k (350k?) for your main home if you have one.


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## stevesainty (Jan 7, 2011)

https://www.tax.service.gov.uk/calculate-your-capital-gains/resident/properties/disposal-date

Just to be clear, you only pay CGT in UK if the amount you sell your asset for, minus the amount you paid for it, and also minus the costs involved in buying and selling the asset, is greater than your allowances. If you occupied the property up to the point of selling and or let the property then you get extra allowances.

Use the HMRC calculator in the link to find out how much CGT you will be liable to, remember jointly owned property you only use 50% of everything to get separate amounts of tax liability.

If you need to declare the gain in Spain, it all depends on timing, you can deduct the amount paid in UK. This is not affected by Brexit as the dual taxation agreement is a bilateral document between Spain and UK.


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## DawnColin (Jul 12, 2018)

Our financial advisor has confirmed that we are not liable to CGT on our UK property which is why I think I am struggling to understand how I can be liable in another Country, when we are not liable in our own. I will be speaking to a Spanish accountant to make sure, as this could have a significant impact on our buying power in Spain and our future cash availability for our long term retirement.

By the way we are not residents yet - but we will be later this year when we are permitted to apply and we will not have assets above the €700k limit per person either.


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## Lynn R (Feb 21, 2014)

DawnColin said:


> Our financial advisor has confirmed that we are not liable to CGT on our UK property which is why I think I am struggling to understand how I can be liable in another Country, when we are not liable in our own.


It's because, if you move to Spain on or before 30th June 2019, you will be officially tax resident in Spain for the whole of 2019 and therefore subject to the Spanish taxation regime on the sale of property (and on your income). If you spend less than 183 days in Spain during 2019 then you will not become tax resident until the following year.


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## Megsmum (Sep 9, 2012)

DawnColin said:


> Our financial advisor has confirmed that we are not liable to CGT on our UK property which is why I think I am struggling to understand how I can be liable in another Country, when we are not liable in our own. I will be speaking to a Spanish accountant to make sure, as this could have a significant impact on our buying power in Spain and our future cash availability for our long term retirement.
> 
> By the way we are not residents yet - but we will be later this year when we are permitted to apply and we will not have assets above the €700k limit per person either.


Because you will be living in Spain and thereby under their tax rules 

If you are moving this year before, I think July 2nd. You will be deemed tax resident in Spain and subject to CGT here also Tax on any pension lump sum as in NHS etc. After that date you are not deemed tax resident until January 1st 2020

It is this exact reason why we timed our move.


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## Lynn R (Feb 21, 2014)

Megsmum said:


> Because you will be living in Spain and thereby under their tax rules
> 
> If you are moving this year before, I think July 2nd. You will be deemed tax resident in Spain and subject to CGT here also CGT on any pension lump sum as in NHS etc. After that date you are not deemed tax resident until January 1st 2020
> 
> It is this exact reason why we timed our move.


I agree, but it's IRPF (income tax) you would be liable to pay on a pension lump sum, not CGT.


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## Megsmum (Sep 9, 2012)

Lynn R said:


> I agree, but it's IRPF (income tax) you would be liable to pay on a pension lump sum, not CGT.


Oops. Edited


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