Selling a UK property by a Spanish resident

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Selling a UK property by a Spanish resident


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Old 10th January 2020, 04:41 PM
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Default Selling a UK property by a Spanish resident

Hi everyone, could you please help to understand what might be Spanish and UK tax liabilities if we sell our house in the UK? My DH and I are both UK citizens officially residing in Spain for over 3 years now. All these years our UK property was rented and we were paying UK tax from rental income. Now our tenants have moved out and, sadly, it is time to sell the house.
As I understand, in the UK we will have to pay the Capital Gains Tax, which is 18% to 28% of the margin. How it will be calculated for us? Will our income outside of the UK taken into consideration or just the UK income from the sale and the rent of the house?
Also going through previous posts on that topic I have realised that Spanish Agencia Tributaria might also want a slice of the money from my property sale. How would this work?
Any advice is very much appreciated.

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Old 11th January 2020, 09:28 AM
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I'm not up to date on this, but the last I read was that if you have not been a UK resident for 5 years, then they only calculate the CGT on the increase in value since a few years ago, maybe 2013 or so but I can't remember the exact date. If you have not been a UK resident for less than 5 years then I suspect you pay CGT on the increase in value since it stopped being your primary residence, which might work out better for you. Best place to ask is a UK forum like money saving expert.

As far as Spain is concerned you may well end up paying CGT on the overall increase in value since you bought it. Although you can deduct any CGT already paid in the UK, it might still come out to be a lot. Probably best to ask a gestora.

BTW you also need to declare your rental income in Spain as well as the UK.

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Old 11th January 2020, 02:33 PM
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Quote:
Originally Posted by Chopera View Post
I'm not up to date on this, but the last I read was that if you have not been a UK resident for 5 years, then they only calculate the CGT on the increase in value since a few years ago, maybe 2013 or so but I can't remember the exact date. If you have not been a UK resident for less than 5 years then I suspect you pay CGT on the increase in value since it stopped being your primary residence, which might work out better for you. Best place to ask is a UK forum like money saving expert.

As far as Spain is concerned you may well end up paying CGT on the overall increase in value since you bought it. Although you can deduct any CGT already paid in the UK, it might still come out to be a lot. Probably best to ask a gestora.

BTW you also need to declare your rental income in Spain as well as the UK.
And have filled In an overseas assets declaration? I think?

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Old 11th January 2020, 02:45 PM
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And have filled In an overseas assets declaration? I think?
Yes
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Old 12th January 2020, 01:10 PM
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There's a fairly comprehensive guide to the UK side of things here :https://www.which.co.uk/money/tax/capital-gains-tax/capital-gains-tax-on-property-avuq96u1500f.

But, as always, try talking to somebody at HMRC and run some scenarios past them. You could find it saves you much more than the cost of an international phone call.

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Old 12th January 2020, 03:47 PM
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As a tax resident in spain you are liable to pay tax on your worldwide income in Spain.

Regarding uk income: That is governed by the Double Taxation Agreement of 2013 between Spain and U.K.

I have only studied that with regard to U.K. crown pension income and income from letting a property in U.K.

You can read it and see what it says, but I am pretty sure you will have to pay tax in Spain on the sale of your U.K. property.

Take a look here :-

https://assets.publishing.service.go...-_in_force.pdf

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