Capital gains tax selling UK buying Spanish property

dm1969 New member

4POSTS

6 years ago

Hi there

3. CGT questions for you:

1. I own a UK property that has doubled in value since I bought it back in 2006. Am I correct in thinking that the calculation for Spanish CGT = sale price - (original price+improvements+outstanding mortgage)? The outstanding mortgage is important to know that this is factored in (to reduce the 鈥減rofit鈥�)聽 ias I have quite a bit left to pay off that will be paid off with the sale albeit that there will still be CGT to pay due to increase.

2. I am currently renting here in Spain and looking to buy a house here. Am I right in thinking that I can invest the proceeds of the UK house in the Spanish house and thus avoid/minimise CGT? Can the UK house continue to be called my prime residence even though I鈥檓 renting temporarily here in Spain while looking to buy a house?

3. Further to point 2, can I buy here in Spain first and then sell later the UK property and still benefit from this relief? I鈥檇 need to take out a temporary mortgage here in Spain to part fund the purchase and then use the proceeds from the UK sake to pay it off. I have read there is a period of 2 years before/after sale?.

Many thanks

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Johncar Spain Expert

1412POSTS

6 years ago

DM.聽 I don麓t know what your suituation is.

If you are not yet resident in Spain (green card)if you sell聽 your family home in UK, before becoming resident in Spain, you can roll over the net sale price from the UK home when buying a family home in Spain, without incurring any CGT liability

dm1969 New member

4POSTS

6 years ago

Hi John - thanks for your quick reply

Without going into all the details here

1. NIE yes
2. Resident - not yet as I have set myself up as autonomo and need to show income first before they will allow me to submit application
3. Empadronamiento - yes

Does that help ? Cheers

Johncar Spain Expert

1412POSTS

6 years ago

Sorry but your reply is confusing

If one is permanently in Spain for 90 days they must register on the EU citizens Register (green paper).

If any of these apply you are tax resident in Spain;聽
聽聽聽聽If you have moved to Spain then you are tax resident immediately and are obliged to register on the EU citizens Register.
聽聽聽聽 If one is in Spain for a total of 183 in a year they automatically are tax resident in Spain.
聽聽聽聽 If Spain is the centre of one麓s economic activities.

An NIE only, the white paper, is only a fiscal ID number and does imply whether or not one is actually living here.

However registering on the Padr贸n can legally only be done by a `person who is living in a town, in their main residence.聽 Example a person living in say Madrid who has a holiday home on a costa cannot register on the padr贸n in the town where the holiday home is.

A person who is tax resident in Spain is obliged to pay income tax on their worldwide income (excluding a UK crown pension or rental income on a property in UK, both of which are taxable in UK, but both must be declared in Spain as they can affect the amount of tax due in Spain on other income) and on any property located anywhere in the world, which is in addition to their main home in Spain.

From what you say, it appears you are tax resident in Spain.