# Cgt 2021!!!



## Keithtoon (May 7, 2015)

Hi all,
Our plans have be dashed to move before the dreaded deadline of 31/Dec/20.
Unless there is a delay due to Covid? One hopes!!!
We will move next May when I am over 65yrs old!
"CGT exemptions for taxpayers over 65" So hopefully this rule will still exist Can we buy a property any time in that year without paying CGT? We will rent for 2/3 months till we find a place, Hopefully!
TIA.
Regards Keith & Macy

If you are over 65 and resident in Spain you have certain advantages for capital gains tax purposes. If you sell a property that has been your main home for more than three years, you do not have to pay tax on the gain even if you do not re-invest the proceeds in another property, though you must meet certain conditions.

Also, you are exempt from tax on gains from the sale of any other assets (not just your main home) if you use some or all of the money from the sale to set up a whole of life pension annuity (‘renta vitalicia’) within six months, but only the amount you use is exempt. The maximum you can re-invest in the whole of life annuity for this purpose is €240,000, the rest (if any) would be subject to capital gains tax. Please note that some requirements apply.


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## Joppa (Sep 7, 2009)

Do you have residency already? If not, and you aren't coming till next year, you will become third-country nationals and financial requirement will rise steeply to an annual income per couple of around 32,000 euro. You also won't get S1 certificate from NHS so you will have to get private medical insurance for a year and then, if desired, become contributing members of state health scheme costing 157 euro/month per person from age 65.
UK has already informed EU that there will be no extension to Brexit.


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## kaipa (Aug 3, 2013)

The over 65 CGT I think is only for EU properties so as UK will be out of EU I dont think that will be available. However, I assume you are aware that you will need to apply for residency visa now as 3rd country not the TIE route that many are talking about?


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## Keithtoon (May 7, 2015)

kaipa said:


> The over 65 CGT I think is only for EU properties so as UK will be out of EU I dont think that will be available. However, I assume you are aware that you will need to apply for residency visa now as 3rd country not the TIE route that many are talking about?


Hi Kaipa,
Yeah.. no choice.
But could sell house next may leave money in UK bank. Purchase in Spain late 2021 this should be ok?


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## kaipa (Aug 3, 2013)

If you sell while you are still resident in uk and have not applied for Spanish residency then if main home no CGT. You can do what you want with money. And when you apply for retirement visa that money is obviously not taxable in Spain although you will have to declare it if over 50.000 and is kept outside of Spain but that is just a formality. I take it you are aware of the financial, healthcare and pension changes that will apply after 2020?


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## snikpoh (Nov 19, 2007)

Keithtoon said:


> Hi Kaipa,
> Yeah.. no choice.
> But could sell house next may leave money in UK bank. Purchase in Spain late 2021 this should be ok?


But surely, as we are no longer in the EU and as the transition period finishes on 31-12-20, selling in May will mean you are no longer given exemption from CGT at 65 years old.


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## kaipa (Aug 3, 2013)

snikpoh said:


> Keithtoon said:
> 
> 
> > Hi Kaipa,
> ...


But I think they mean that they aren't applying for Spanish residency until after 2020 so they can sell in uk etc. It hasn't nothing to do with Spain.


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## kaipa (Aug 3, 2013)

Ok reread their post. If they apply for residency in May and sell house in that financial year they will need to pay CGT in Spain because uk no longer in EU


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## kaipa (Aug 3, 2013)

Seeing they are retiring best is sell house 2021 and then move to Spain after December 2021 so new financial year


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## Miss Jones11 (Jul 13, 2020)

My advice which is not always welcome, is go to the relevant tax authority (UK or Spain) and ask your questions, try and get advice that will stand up in court.

Several years ago I sold a business and ended up with a tax bill of £25,000. I was told by ‘’so called’’ professional advisors I would owe nothing. Beware who you listen to.


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## xabiaxica (Jun 23, 2009)

Miss Jones11 said:


> *My advice which is not always welcome,* is go to the relevant tax authority (UK or Spain) and ask your questions, try and get advice that will stand up in court.
> 
> Several years ago I sold a business and ended up with a tax bill of £25,000. I was told by ‘’so called’’ professional advisors I would owe nothing. Beware who you listen to.


I'm not sure why you would think that - you've been a member here for a matter of days. 

I would suggest that you have a good look through discussions that we've had here over the years. We always recommend speaking to the tax office if specific tax advice is required.


This forum is for members to share their experiences - it's a discussion forum. Most members will come to the forum to get an idea of what is likely the case, or to seek the opinions of those of us who live here & have been through similar situations, before contacting the authorities. 

Which is what is happening on this thread.


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## kaipa (Aug 3, 2013)

I think that over the next year we are going to find lots of people still wanting to retire and live in Spain who are perhaps unaware how significantly things will have changed. Many people are still buying properties under the assumption they will retire and live here in a couple of years but are unaware how wealthy you will need to be. The truth is that many cheaper areas where they have built urbanization for foreigners ( especially the uk market) are drying up. I know a big constructor in Alicsnte who directed its market towards Scandanavians and is not marketing in UK. Thd wealthy Brits who can afford to live in Spain will almost certainly move to more salubrious parts such as Majorca as opposed to the cheap main line areas which I fear will become neglected ghost towns.


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## Lynn R (Feb 21, 2014)

Miss Jones11 said:


> My advice which is not always welcome, is go to the relevant tax authority (UK or Spain) and ask your questions, try and get advice that will stand up in court.
> 
> Several years ago I sold a business and ended up with a tax bill of £25,000. I was told by ‘’so called’’ professional advisors I would owe nothing. Beware who you listen to.


How surprising, therefore, that you didn't follow your own advice about your plus valia liability but came to this forum to ask about it.


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## Overandout (Nov 10, 2012)

Lynn R said:


> How surprising, therefore, that you didn't follow your own advice about your plus valia liability but came to this forum to ask about it.


To be fair, she didn't really come here to ask about the plus valia, she came here to complain about it!

That's not a bad thing by the way as it forewarns others to not repeat the mistake.


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## Lynn R (Feb 21, 2014)

Overandout said:


> To be fair, she didn't really come here to ask about the plus valia, she came here to complain about it!
> 
> That's not a bad thing by the way as it forewarns others to not repeat the mistake.


There were definitely questions posed such as "is this correct, is it legal?". And here is a separate question posed in another thread from the same source.



Miss Jones11 said:


> Fortunately I have sold my villa and the sale is almost complete albeit at a substantial loss. However there are rumours going around that starting 1st January 2021 CGT for non EU citizens in Spain will change and that will include British. If you sell at a loss it will be irrelevant. The taxman’s selling valuation will be based on the rebuilding cost, and that will be defined by the average cost of bricks at the builder’s merchants.
> There is nothing yet on the British Consulate website in Alicante to confirm this, but EU countries are free to do as they like to non EU citizens. Anybody know anymore?


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## Keithtoon (May 7, 2015)

kaipa said:


> Ok reread their post. If they apply for residency in May and sell house in that financial year they will need to pay CGT in Spain because uk no longer in EU


Thank you all,
So to escape paying over £60,000 CGT rent 2021 then buy in 2022?
No CGT applies?
Just hope there is a delay because of Covid, wishful thinking I know!
Remember.... can not sell UK home till May 2021, but trying different options.
If you guys have any better ideas feel free...
All the very best and thank you for you honest answers!
Keith & Macy


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## Keithtoon (May 7, 2015)

xabiaxica said:


> I'm not sure why you would think that - you've been a member here for a matter of days.
> 
> I would suggest that you have a good look through discussions that we've had here over the years. We always recommend speaking to the tax office if specific tax advice is required.
> 
> ...


Brilliant, I of course would use "Official" means when the big day comes!
We would rent to look and find a home ..could take months.
In the mean time we will find a Gestor/Lawyer to go through the different ways around the problems we think we may have. 
Regards K&M


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## Overandout (Nov 10, 2012)

Lynn R said:


> There were definitely questions posed such as "is this correct, is it legal?". And here is a separate question posed in another thread from the same source.


Point taken, I hope I have not offended the poster.


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## kaipa (Aug 3, 2013)

Keithtoon said:


> kaipa said:
> 
> 
> > Ok reread their post. If they apply for residency in May and sell house in that financial year they will need to pay CGT in Spain because uk no longer in EU
> ...


I am not sure exactly what you are saying. If you are suggesting that you will come to spain and rent while you wait to sell your house in uk then you will still have to pay CGT. The only way you avoid Spanis CGT is selling before you move to Spain and making sure your sale is in a separate spanish tax year from the year you move. Do you understand? The tax system in spain is completely different from UK and renting in spain when you apply for residency means that the rental address is your primary home not your uk property irrespective about how long you lived there.


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## Keithtoon (May 7, 2015)

kaipa said:


> I am not sure exactly what you are saying. If you are suggesting that you will come to spain and rent while you wait to sell your house in uk then you will still have to pay CGT. The only way you avoid Spanis CGT is selling before you move to Spain and making sure your sale is in a separate spanish tax year from the year you move. Do you understand? The tax system in spain is completely different from UK and renting in spain when you apply for residency means that the rental address is your primary home not your uk property irrespective about how long you lived there.


--------------------------------------
Thank you Keipa,
Rent in 2021, eg. Sept to Dec, return to UK to sell house then back to Spain to purchase in Jan 2022...to avoid CGT!
Hopefully this will work. Then at that point apply for residencia?
Hope this is clear... TIA
Keith.


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## xabiaxica (Jun 23, 2009)

Keithtoon said:


> --------------------------------------
> Thank you Keipa,
> Rent in 2021, eg. Sept to Dec, return to UK to sell house then back to Spain to purchase in Jan 2022...to avoid CGT!
> Hopefully this will work. Then at that point apply for residencia?
> ...


At that point you will have to apply for a resident visa from the UK, before moving to Spain.


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## kaipa (Aug 3, 2013)

xabiaxica said:


> Keithtoon said:
> 
> 
> > --------------------------------------
> ...



I think the OP is saying they are going to come to spain in September and rent until December. During this period going to get WA residency. Then back to uk Jan to sell house in 2021 june. Stay in UK more than 183 days. Claim tax residency there with no CGT. Then back to Spain where they hope to not have to declare Tax residency until 2022. This way they hope to avoid CGT in spain. Probably a bit cheeky but that's up to the Hacienda to decide not me


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## kaipa (Aug 3, 2013)

No forget my post. It's wrong!! Sorry. Yes they want to apply for residency after returning to spain which is perfectly fine and no CGT to pay. As long as they meet the visa requirements then it shouldn't be a problem. My apologies for suggesting the opposite


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## xabiaxica (Jun 23, 2009)

kaipa said:


> I think the OP is saying they are going to come to spain in September and rent until December. During this period going to get WA residency. Then back to uk Jan to sell house in 2021 june. Stay in UK more than 183 days. Claim tax residency there with no CGT. Then back to Spain where they hope to not have to declare Tax residency until 2022. This way they hope to avoid CGT in spain. Probably a bit cheeky but that's up to the Hacienda to decide not me


That is unlikely to work.

If you're out of Spain for more than half the year they can rescind your right to residency & I'm sure Hacienda etc realise that some Brits will be trying to find a way round the high income requirements after Brexit by registering now but not moving until later.


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## kaipa (Aug 3, 2013)

xabiaxica said:


> kaipa said:
> 
> 
> > I think the OP is saying they are going to come to spain in September and rent until December. During this period going to get WA residency. Then back to uk Jan to sell house in 2021 june. Stay in UK more than 183 days. Claim tax residency there with no CGT. Then back to Spain where they hope to not have to declare Tax residency until 2022. This way they hope to avoid CGT in spain. Probably a bit cheeky but that's up to the Hacienda to decide not me
> ...


Yes but I was wrong to suggest this as I dont think this is what poster meant


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