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Discussion Starter · #1 ·
Apologies as I have asked about this before but I'm still confused.:confused:

Can anyone explain what we'd need to do to avoid paying CGT? We've had a few hols in Spain but nothing near 183 days. We thought we'd be in Spain for Christmas but I'm not so sure if that's the best thing to do?
Also, can you advise how Spain would find out how much profit we'd made on our house?

Many thanks for any info.

We are going to sort out a tax advisor but we need to know about CGT or we might not be moving :(
 

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I thought you did not pay CGT in the UK if it was your main home it only applied on second homes etc.
You don't.... but you do pay it in Spain if you don't time your move at the right time
 

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Why if you are not a tax resident in Spain would you have to pay CGT on your UK property or am I reading this wrong?
 

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Found this on a web site for a financial adviser company Scottsdale Overseas

The Zero Tax Option

As we have already stated, by selling your UK home before you move to Spain or at least before you become tax resident in Spain and non-tax resident in the UK, there is no CGT either in Spain or the UK.


However, if you decide to retain your UK property there are certainly some tax implications that require consideration.



Income Tax
 

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Exactly. The key is to get the cash from your UK house sale into your account during the fiscal year before your fist fiscal year as a tax resident in Spain.

So, if you move in what is left of 2017, you will not be a tax resident until 2018 fiscal year, so you have the rest of the year to sell up and get the cash in the bank.

If you are planning to sell up and move in 2018, take care. If the sale of the UK house is in 2018, you do not want to move before July 2018 otherwise you run the risk of CGT beong applicable as you will be a fiscal resident for all of 2018.
 

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Discussion Starter · #7 ·
Thanks Overandout, that's exactly what I needed to know. I don't really think it's feasible for us to complete the sale here and buy in Spain before the end of the year so it looks like we're snookered :-(
 

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Thanks Overandout, that's exactly what I needed to know. I don't really think it's feasible for us to complete the sale here and buy in Spain before the end of the year so it looks like we're snookered :-(
If you could complete the sale in the UK by the end of this year and maybe rent somewhere in Spain for a few months from the start of next year (rentals for the winter months are widely available and reasonably priced, luckily) you would be OK regarding CGT liability, though.
 

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Thanks Overandout, that's exactly what I needed to know. I don't really think it's feasible for us to complete the sale here and buy in Spain before the end of the year so it looks like we're snookered :-(
I thought your buyers wanted to complete before Xmas :confused:
 

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Discussion Starter · #11 ·
Lynn: I've been updating my hubby about this and he said similar to you. When exactly would we become liable for tax?

Overandout: They do! What I meant was by the time we exchange contracts here I doubt we'll have time to find somewhere and buy it before the end of the year.

Rabbitcat: We are selling here and buying a cheaper house in Spain so we can live off the difference.
 

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Why if you are not a tax resident in Spain would you have to pay CGT on your UK property or am I reading this wrong?
See post below

Exactly. The key is to get the cash from your UK house sale into your account during the fiscal year before your fist fiscal year as a tax resident in Spain.

So, if you move in what is left of 2017, you will not be a tax resident until 2018 fiscal year, so you have the rest of the year to sell up and get the cash in the bank.

If you are planning to sell up and move in 2018, take care. If the sale of the UK house is in 2018, you do not want to move before July 2018 otherwise you run the risk of CGT beong applicable as you will be a fiscal resident for all of 2018.
Lynn: I've been updating my hubby about this and he said similar to you. When exactly would we become liable for tax?

Overandout: They do! What I meant was by the time we exchange contracts here I doubt we'll have time to find somewhere and buy it before the end of the year.

Rabbitcat: We are selling here and buying a cheaper house in Spain so we can live off the difference.

We sold in September money in bank by year end...moved march following year. Therefore avoiding CGT. As OnO says. Sell and cash money before end of this year you will be fine. You may have to rent, we did for a while while we looked, the key is to sell this year and move next... creep into next year and you have to wait for the midway point. Renting in Spain considerably cheaper than U.K.
 

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Thanks Megsmum. Sorry to be dense but would we not be subject to tax until we actually bought a house?
My understanding is no. Providing you sell and put money in bank this year i.e. Before end of December 2017 then no. If you move to Spain early part of 2018.. You become fiscally resident in Spain ( remember tax year here fund January to December) and in 2019 declare your taxes for 2018. What you earn 2017 is irrelevant. If you complete your sale January 2018 then move before July then yes, if you haven't bought before next year your liable on the remaining monies.

CAVEAT. This is MY understanding and I could be wrong and if I am someone is going to let me and you know
 

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Lynn: I've been updating my hubby about this and he said similar to you. When exactly would we become liable for tax?
If you sold your UK house before 31st December 2017 and moved to Spain you would not be tax resident in Spain for the 2017 year because you would not have been resident here for 183 days or more. So any income you received in 2017, includng the proceeds of your UK house sale, would not need to be declared in Spain.

However, if you received the proceeds of the sale on or after 1st January 2018 and subsequently moved to Spain, you would be tax resident here for the 2018 year (your first tax return becoming due by June 2019).
 

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Discussion Starter · #16 ·
If you sold your UK house before 31st December 2017 and moved to Spain you would not be tax resident in Spain for the 2017 year because you would not have been resident here for 183 days or more. So any income you received in 2017, includng the proceeds of your UK house sale, would not need to be declared in Spain.

However, if you received the proceeds of the sale on or after 1st January 2018 and subsequently moved to Spain, you would be tax resident here for the 2018 year (your first tax return becoming due by June 2019).
Thanks Lynn...it's gradually sinking in! If we sell before end of December and bank the money can we still move to Spain or do we wait till January?
 

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Thanks Lynn...it's gradually sinking in! If we sell before end of December and bank the money can we still move to Spain or do we wait till January?
You can move December or January, as this year you would not have fulfilled the criteria for being tax resident and if you move January, this years income is not included in your 2018 returns PROVIDING PROCEEDS FROM HOUSE ARE IN BANK BY 31DECEMBER 2017,


I remember trying to get my head around this!
 

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It's a minefield isn't it Megsmum!
It is and it isn't.... you are doing exactly the right thing
Research
Research
Research

Ask question however ridiculous they may sound. You're not going to get everything right but you'll get most of it right. Be prepared for the odd hiccup after all you're moving to another country, culture lifestyle and if I maybe so bold..... spending more time with Mr Informaniac. when we retired early, spending 24/7 with each other, now that was a BIG adjustment 🤣🤣🤣


From your posts, you have a good grasp of the issues involved. Take advice from the people on here, but always remember we are offering advice solely from our own circumstances and viewpoints and more importantly our local areas.
 

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Discussion Starter · #20 ·
Thanks a lot-you've cheered me up a bit!
We have wanted to move to Spain for over 10 years but with our buyers wanting to be in for Xmas and with us having nowhere to go I am getting stressed out already and we haven't even started yet. At the moment I could strangle Mr Infomaniac so the signs are not looking good!!
 
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