[ojosazul88]

I see a lot of threads and discussions talking about capital gains tax liabilities in Spain for property but what about investments or life insurance bonds that originated in the UK.?

I had an investment bond with a UK life company for 20 years in England and used to take 5% tax free income per year which was the allowance in the UK. For the last 12 years i have been living in Spain and have just surrendered this bond. The Life company have informed me the total gain over the 20 year period is 100,000 euros. What would be my Spanish tax liability on this? If i re invested this amount in a Spanish regulated version of this bond which the UK Life company have, would i still be liable for CGT? Thanks.

 

[extranjero]

Apparently bonds in UK are not approved by Spain and are subject to cgt on the profit;Cant remember exact rates, buy between 21-27%-Capn Billy will know!
Sounds like the Spanish tax man is going to have a big chunk of yours!
See article on this in this weeks Costa Blanca News, by Blevins Franks

 

[crookesey]

Ask the life office for a 'Chargeable Event Certificate,' when you surrendered the bond they should have supplied one. I assume that you took 20 x 5% making the residual amount the bond's gain, in the UK on encashment, the gain would be divided by the years of investment and that figure would form the chargeable event amount.

 

[ojosazul88]

capital gains tax

Ask the life office for a 'Chargeable Event Certificate,' when you surrendered the bond they should have supplied one. I assume that you took 20 x 5% making the residual amount the bond's gain, in the UK on encashment, the gain would be divided by the years of investment and that figure would form the chargeable event amount.

Yes, I have a chargeable event certificate, it states the gain over the 20 year period
Is equivalent to 100,000 Euros. Yes I took 20 x 5%. I am still no clearer though how Spain
Would tax this and on what amount and do they take into account for 8 of the 20 years I was a
UK resident?

 

[crookesey]

Yes, I have a chargeable event certificate, it states the gain over the 20 year period
Is equivalent to 100,000 Euros. Yes I took 20 x 5%. I am still no clearer though how Spain
Would tax this and on what amount and do they take into account for 8 of the 20 years I was a
UK resident?

The less said about the latter the better, a life office might just take the view that as a none UK tax resident for 12 years you were not eligible to have the bond. You will just have to bite the bullet and pay a Spanish tax accountant for his/her advice. I recall 'hopping' a client's very large tax-free lump sum from the pension office directly into an Isle of Man cash account bond in order to avoid declaration in his forthcoming divorce proceedings. And before any 'experts' jump in, it is not illegal to transfer legal money into an Isle of Man bond, when the declaration papers arrived it was in respect of world wide bank accounts, so he got away with it.

 

[extranjero]

Ojosazul88-What would you have paid if you had stayed in the UK, or would it have been a tax free sum;the prospect of giving the Spanish tax man approx a quarter of your profit in tax is not a good one.
Did you read the Blevins Franks article in CBNews? it's worth contacting them.
Crooksey-many people hold bonds in UK(probably horrified by OP's post) -what do you mean about eligibility to hold them if they were taken out years ago when living in UK.

 

[crookesey]

Ojosazul88-What would you have paid if you had stayed in the UK, or would it have been a tax free sum;the prospect of giving the Spanish tax man approx a quarter of your profit in tax is not a good one.
Did you read the Blevins Franks article in CBNews? it's worth contacting them.
Crooksey-many people hold bonds in UK(probably horrified by OP's post) -what do you mean about eligibility to hold them if they were taken out years ago when living in UK.

It's on the terms and conditions and schedule, read them and it will tell you all that you wish to know.

 

[ojosazul88]

Ojosazul88-What would you have paid if you had stayed in the UK, or would it have been a tax free sum;the prospect of giving the Spanish tax man approx a quarter of your profit in tax is not a good one.
Did you read the Blevins Franks article in CBNews? it's worth contacting them.
Crooksey-many people hold bonds in UK(probably horrified by OP's post) -what do you mean about eligibility to hold them if they were taken out years ago when living in UK.

I don't know what I would have as a cgt liability if I were in the UK, I believe the current rate
Is 18% so I never expected this to be a tax free bond, then again if you live for more than
5 years out of UK, there is no cgt to pay in UK but Spain I'm sure will charge cgt.
I've not seen the CB news article but will look,