# moving to spain



## tonemar (Nov 9, 2010)

Thought I'd just share this with everybody, I see many questions about NIE residency etc. I am purchasing a property in Spain, deposit paid, just waiting for final bit's and bob's then we are off.
The whole process has been hassle free, and actually quite delightful. Why? a good abagado (Solicitor).
I cannot stress enough, get good advice, everything has been checked and double checked, she even arranged a meeting between the vendor, their solicitor and ourselves so there was no doubt what we were actually committing to.
Everything from obtaining bank accounts, residency, health care has been explained in detail.
So, as I read somewhere, buying in Spain is not difficult, just different.
It will cost a bit, not the same as the UK, selling my house in the UK is costing approx double of buying the house in Spain (solicitor fees), but in the long run could save you ?thousands.
Regards to all
T


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## rewdan (Feb 23, 2010)

I am sure you are aware but just in case your not, please make yourself aware of any potential CGT that may become payable in Spain on the sale of your Uk home.

Just a friendly word of warning.


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## thrax (Nov 13, 2008)

I assume if he isn't living in Spain yet he can't be tax resident so it is unlikely he will be liable to CGT in Spain.


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## rewdan (Feb 23, 2010)

that would be correct. I believe that its always good to know what the rules are beforehand rather than after the potential liability crops up


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## extranjero (Nov 16, 2012)

thrax said:


> I assume if he isn't living in Spain yet he can't be tax resident so it is unlikely he will be liable to CGT in Spain.


If you spend more than 183 days in one year you will pay CGT on the sale of your UK house in the same year, even if not living in Spain at the time of sale, as you are regarded as tax resident for the whole year;at least that's what we are told in previous posts on the subject of tax;of course if the poster is moving out here now , as it's after July 2nd he'll escape it.


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## zenkarma (Feb 15, 2013)

tonemar said:


> So, as I read somewhere, buying in Spain is not difficult, just different.


Really? You've bought one property and now you're an expert on the buying process?

Just wait till the local tax office come after you in a year or so's time because you've underpaid the IPT transfer tax, because their valuation of the property you just bought is different to the price you've paid. Your solicitor did check with the local tax office on what their current valuation for IPT is didn't she? Or did she just tell you what it would be based on your purchase price?

I'll be curious to know just how good you think your solicitor is then!


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## rewdan (Feb 23, 2010)

extranjero said:


> If you spend more than 183 days in one year you will pay CGT on the sale of your UK house in the same year, even if not living in Spain at the time of sale, as you are regarded as tax resident for the whole year;at least that's what we are told in previous posts on the subject of tax;of course if the poster is moving out here now , as it's after July 2nd he'll escape it.


All correct of course as long as the UK house sale completes before the end of the year. If it goes into next year then that is where the trouble could begin.

Forewarned is forearmed in my humble opinion


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## rewdan (Feb 23, 2010)

And as a second thought, the Spanish could lay claim under other rules, the 183 day one is not finite after all


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## thrax (Nov 13, 2008)

Currently being reviewed anyway under EU regs as it may be that what the Spanish are trying to do is illegal. Many accountants think they should only be allowed to tax income that enters Spain, outside of offshore savings etc. Lots still going on with all of this. Spain doing something illegal??? Well I never...


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## rewdan (Feb 23, 2010)

thrax said:


> Currently being reviewed anyway under EU regs as it may be that what the Spanish are trying to do is illegal. Many accountants think they should only be allowed to tax income that enters Spain, outside of offshore savings etc. Lots still going on with all of this. Spain doing something illegal??? Well I never...


This is very important to me at the moment, any chance you could point me in the direction of further information


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## CapnBilly (Jun 7, 2011)

rewdan said:


> This is very important to me at the moment, any chance you could point me in the direction of further information


I wouldn't hold your breath. Firstly there aren't any tax regulations in the EU, only tax policy. This is the From the Commission

"In this Communication, the Commission reiterated its belief that there is no need for an across the board harmonisation of Member States' tax systems. Provided that they respect EU rules, Member States are free to choose the tax systems that they consider most appropriate and according to their preferences. In addition, any proposal for EU action in the tax field needs to take account of the principles of subsidiarity and proportionality. There should only be action at EU level where action by individual Member States could not provide an effective solution. In fact, many tax problems simply require better co-ordination (see COM/2006/823(55 Kb) of 19.12.2006) of national policies."

Secondly, capital Gains are specifically covered in both the old Double Taxation Agreement (DTA) and the new one. This means that there is an effective agreement between the UK and Spain. Article 13 specifically says

1. Gains derived by a resident of a Contracting State from the alienation of 
immovable property referred to in Article 6 and situated in the other Contracting State 
may be taxed in that other State. 

This wording normally means that the specific income ( gain in this case) is taxable both where the individual is resident, and the state where it arises. If it was not taxable in Spain, then it would say "only" not "may".

A number of countries in the EU tax worldwide income as well as Spain, including Germany, France and Italy.

The only argument I can see is that it's unfair under the Treaty of Lisbon, but I can't see this going anywhere, for the simple reason that there is agreement between the countries, specifically covering the issue, as evidence by the DTA.


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## rewdan (Feb 23, 2010)

Quote

'Secondly, capital Gains are specifically covered in both the old Double Taxation Agreement (DTA) and the new one. This means that there is an effective agreement between the UK and Spain. Article 13 specifically says

1. Gains derived by a resident of a Contracting State from the alienation of 
immovable property referred to in Article 6 and situated in the other Contracting State 
may be taxed in that other State. 

This wording normally means that the specific income ( gain in this case) is taxable both where the individual is resident, and the state where it arises. If it was not taxable in Spain, then it would say "only" not "may".'



That is exactly as I would interpret it, so whilst we could move to Spain today and bring our income happily, we will have to wait until we sell our UK house and a tax year expires so as not to suffer CGT in Spain. 
Shame really on all sides.


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## Snozzle12 (Aug 13, 2013)

Where in Europe doesn't by de fault tax worldwide income?


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## rewdan (Feb 23, 2010)

no idea myself but whilst I can get 100% CGT relief as a tax resident of the UK whilst selling my PPR (home) in the UK, then I must take advantage of that.
Other countries have their own rules but I prefer the 100% relief!


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## tonemar (Nov 9, 2010)

*yes indeed*

All fiscal elements of governments will try and rip you off. I reinforce my point get good advice from a good solicitor and accountant


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## rewdan (Feb 23, 2010)

tonemar said:


> All fiscal elements of governments will try and rip you off. I reinforce my point get good advice from a good solicitor and accountant


That is of course the right way to go.

Have you managed with that advice to legally swerve the CGT potential liability?
If so, please spill the beans so we all can learn from your experience, I am sure there are lots of people that it would help.


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## tonemar (Nov 9, 2010)

This is being actively looked into, to be honest my accountant does not think it will be a problem, this seems ti be aimed at the wealthy, not a 2 up 2 down type property, but , I'll keep you posted


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## rewdan (Feb 23, 2010)

tonemar said:


> This is being actively looked into, to be honest my accountant does not think it will be a problem, this seems ti be aimed at the wealthy, not a 2 up 2 down type property, but , I'll keep you posted


thanks, mine is a bit more than that, thus the need to be on the safe side


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## CapnBilly (Jun 7, 2011)

tonemar said:


> This is being actively looked into, to be honest my accountant does not think it will be a problem, this seems ti be aimed at the wealthy, not a 2 up 2 down type property, but , I'll keep you posted


Good lcuk with that. Could you point me to where it says in the Spanish Tax Law where it says capital gains doesn't apply to a 2 up 2 down.


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## rewdan (Feb 23, 2010)

Spain has allowances too as I understand it so if the gain wasn't too big then no problem


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## CapnBilly (Jun 7, 2011)

rewdan said:


> Spain has allowances too as I understand it so if the gain wasn't too big then no problem


There isn't a monetary allowance like there is in the UK, but there is an indexation allowance. It is also possible to avoid CGT if its your principal residence, and you reinvest the proceeds within 2 years. In other words if you sell your house in the UK, move to Spain, and then buy a property in Spain within 2 years, you won't pay CGT, on the amount invested.


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## rewdan (Feb 23, 2010)

I still prefer the 100% exemption the Uk gives over any allowance, and unless it changes, I will just have to wait it out.


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## Pesky Wesky (May 10, 2009)

tonemar said:


> Thought I'd just share this with everybody, I see many questions about NIE residency etc. I am purchasing a property in Spain, deposit paid, just waiting for final bit's and bob's then we are off.
> The whole process has been hassle free, and actually quite delightful. Why? a good abagado (Solicitor).
> I cannot stress enough, get good advice, everything has been checked and double checked, she even arranged a meeting between the vendor, their solicitor and ourselves so there was no doubt what we were actually committing to.
> Everything from obtaining bank accounts, residency, health care has been explained in detail.
> ...


Thanks for posting this about your own experiences in Spain.
Nice to know that it's not always blood sweat and tears.
As you have checked and double checked, used professionals, and have listened to advice you will have hopefully have a trouble free start to life in Spain.
Good luck


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