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My wife and I will be making the final move to Almeria province in late October this year, we already have a property we purchased and i hold an Irish passport but my wife dose not. My question is: when is it necessary or advisable to become a tax resident? I know this is probably well known but any advice would be very helpful. Thanks in advance.
Posted: Mon Sep 11, 2023 8:48pm
Legendary helpful member
Well, from what I understand if you become tax-resident in the same (tax) year as you sell a house, you’ll be liable for Capital Gains in Spain. Tax year in Spain is January to December.
Now if you haven’t sold a property it doesn’t matter. Once you’ve made the move you don’t get a choice of when to become tax resident - that happens automatically once you have resided here for 183 days.
DarioMartin wrote on Mon Sep 11, 2023 8:48pm:
Well, from what I understand if you become tax-resident in the same (tax) year as you sell a house, you’ll be liable for Capital Gains in Spain. Tax year in Spain is January to December.
Now if you haven’t sold a property it doesn’t matter. Once you’ve made the move you don’t get a choice of when to become tax resident - that happens automatically once you have resided here for 183 days....
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Hi Dario,
We seem to agree on most things but not this. I obtained my residency on 30 September and became a tax resident on 1 January. You can’t be partially tax resident - this has an impact on selling property regarding CGT.
Posted: Tue Sep 12, 2023 12:08pm
Legendary helpful member
PhilBr wrote on Tue Sep 12, 2023 11:51am:
Hi Dario,
We seem to agree on most things but not this. I obtained my residency on 30 September and became a tax resident on 1 January. You can’t be partially tax resident - this has an impact on selling property regarding CGT.
Ok, it would seem that if you gain residency close to start of new tax year, then you become tax resident at start of tax year; otherwise it’s 183 days after starting residency … I guess that’s why people are advised to time it right on selling and moving. I suppose the ideal would be to sell in November / December but actually arrive in Spain and start residency after 1st January
DarioMartin wrote on Tue Sep 12, 2023 12:08pm:
Ok, it would seem that if you gain residency close to start of new tax year, then you become tax resident at start of tax year; otherwise it’s 183 days after starting residency … I guess that’s why people are advised to time it right on selling and moving. I suppose the ideal would be...
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... to sell in November / December but actually arrive in Spain and start residency after 1st January
Thank you for your replies. We sold our property here in the UK at the end of March and it was our only and main residence so, I will not be liable for CGT here in the UK. I do not think we will be liable for CGT in Spain from my understanding.
My question was to try and understand when we should become a tax resident? I know that after the 183 days you should declare this but I wanted to know what if we did this earlier, like in November this year?
Sorry, if this is confusing 🙂 and thanks
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Posted: Sat Sep 16, 2023 6:53pm
Legendary helpful member
Mally2023 wrote on Sat Sep 16, 2023 6:43pm:
Thank you for your replies. We sold our property here in the UK at the end of March and it was our only and main residence so, I will not be liable for CGT here in the UK. I do not think we will be liable for CGT in Spain from my understanding.
My question was to try and understand when we should become a tax resident? I know that after the 183 days you should declare this but I wanted to know what if we did this earlier, like in November this year?...
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Sorry, if this is confusing 🙂 and thanks
That really is a question you should pose to a tax specialist / consultant.
DarioMartin wrote on Sat Sep 16, 2023 6:53pm:
That really is a question you should pose to a tax specialist / consultant.
Thank you for this advice, appreciated.
Mal
If you sell your house in the UK the first half of the year you can come to Spain and are not liable for tax until the following year. We sold our house in UK last year then rented for six months. Came over and purchased a villa in May, completed end of July. Moved over full time in August. My husband has an irish passport and is obtaining residency in the next couple of weeks, I shall be applying for mine at the same time, as I hold a UK passport this will take approximately 3 months but am able to stay in spain as soon as I have started the process. We have been advised to sort any pensions (if wanting your 25% tax free) out before the end of this year and if wanting to cash any Isa's etc. As mentioned it is all in the timing's!!!! Hope this helps.
Alison57 wrote on Mon Sep 18, 2023 8:47am:
If you sell your house in the UK the first half of the year you can come to Spain and are not liable for tax until the following year. We sold our house in UK last year then rented for six months. Came over and purchased a villa in May, completed end of July. Moved over full time in A...
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...ugust. My husband has an irish passport and is obtaining residency in the next couple of weeks, I shall be applying for mine at the same time, as I hold a UK passport this will take approximately 3 months but am able to stay in spain as soon as I have started the process. We have been advised to sort any pensions (if wanting your 25% tax free) out before the end of this year and if wanting to cash any Isa's etc. As mentioned it is all in the timing's!!!! Hope this helps.
Thank you and yes, it is very helpful.
Mal
