# Moving from UK to Spain - Capital Gains Tax



## dmitri (Jan 4, 2015)

Hi all,

We are selling our flat in UK and then we were planning to move to Spain in mid April. We are going to have capital gains from the sale of the flat, quite a good chunk of money. UK law suggests that we do not have to pay any CGT as it was our main home.

However, if we move to Spain in mid April, after six months I will become resident in Spain for tax purposes and at the end of the year I will have to do an annual return where I will have to specify my CG, meaning I will have to pay 24% on the whole amount. This is not great as the tax amount will be quite substantial.

I've read that if you invest the CG in your next home than you do not have to pay CGT. Is this the case? Does anyone have any experience with this?

Are there any other ways of dealing with this issues? I am sure I am not the first one in this boat, but I can't seem to find any answers.

Many thanks,
Dmitri


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## extranjero (Nov 16, 2012)

You will have do do a tax return next year for 2015
Tax year is Jan- Dec
You would have to pay CGT on the profit made on the sale, not the whole amount. When you bought your UK property is of importance, as if bought before a certain year, you may pay less or no tax
If you invests the proceeds of the sale in a property within 2 years, you won't have any Cgt to pay.
If you only invest some of it you will pay tax on the remainder.
There is loads of advice about this online.


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## dmitri (Jan 4, 2015)

I bought the property in December 2011.

Can you point me in the right direction where I can find relevant information online?


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## extranjero (Nov 16, 2012)

The point about paying no tax if bought before a certain date applies to properties bought before 1986, and apparently the rule changed in 2006, so since then there will be cgt, though less, I think.
That, however doesn't apply to you now.
If you just Google "reinvesting proceeds of house sale in UK in property in Spain to avoid capital gains tax" loads of references will come up.


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## dmitri (Jan 4, 2015)

I've looked at some examples, and it looks like if I don't want to pay CGT I will have to reinvest the whole lot that I got back from the sale. Its quite strange though. 

Example: 
Let's say cost of property initially 100k, got mortgage for it with 15K deposit. Then after 3 years sold it for 200k. In those 3 years paid off 10k in mortgage payments, so mortgage left is 75K, and CG is 100K. 
In order for me not to pay any tax I would have to invest in new home 200K-75K(mortgage paid back to bank) = 125K?


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## extranjero (Nov 16, 2012)

I think it better to see an accountant if, especially if a mortgage is involved.
Taxes can get complicated!


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## extranjero (Nov 16, 2012)

The capital gains tax is on the gain, not the whole amount


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## alborino (Dec 13, 2014)

dmitri as an alternative if you are not starting work in Spain:

by mid April you will have already spent say 100 days out of Spain.

If the bill was say 20000 Euros you could have two 89 day periods in Spain before 31st December. Have 3 months in Portugal on hols. 
And still be up on the deal.

Yes it would mean you couldn't work and if you have a job lined up this is not an option. But just wanted to offer an alternative. Remember carrying forward CGT is all well and good but it will comeback and bite you or those inheriting your estate. 

Anyway your departure is close so more importantly enjoy the adventure


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