Would I have to pay capital gains Tax

brian8182 wrote on Fri Jul 3, 2020 12:02pm:

If I was to get residency prior to me selling my property in U.K. would I be liable for Capital Gains Tax ?

Many Thanks 

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Brian

truenudist wrote on Fri Jul 3, 2020 1:27pm:

Hi Brian 

This link to a previous topic might help together with the links in it.

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regards,

Moving to Spain post transition period.

truenudist wrote on Fri Jul 3, 2020 1:27pm:

Hi Brian 

This link to a previous topic might help together with the links in it.

Read more...

regards,

Moving to Spain post transition period.

psy1967 wrote on Fri Jul 3, 2020 6:19pm:

Brian - you need to be very careful with this and get some proper tax advice.  

Matthew advises in the linked discussion "On a move to Spain the last thing I'd do is sell the house in the UK. This always was and is your main asset. At this moment you don't know if Spain is for yo...

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...u; you want it to be for you, but the bottom line is you don't really know."  

Now that may be very sound emotional/lifestyle advice, but the tax angle is this:  If you have lived in your principal private residence ("PPR", aka "home") for say 20 years, you almost certainly have a large monetary gain on it.  The gain that a UK tax resident makes selling their UK PPR is totally tax free. However if you become Spanish tax resident  and you have not sold your UK PPR then firstly you must report it on your Modelo 720 as an overseas asset, and secondly if/when you do sell you will be liable to pay Spanish tax on the entire gain since you bought the asset (not just since you became Spanish tax resident).  It would therefore be sensible from a tax advice viewpoint to sell your UK PPR before you become Spanish tax resident.  

If you have not owned your home / PPR in the UK for very long then maybe you don't have much gain to tax anyway, but as you asked the question I am guessing it is a serious consideration for you.  If you don't want to put all of your eggs in one basket (essentially what Matthew's advice was suggesting) then you should consider selling your UK PPR while you are still UK tax resident, and putting the proceeds into an appropriate risk investment(s).   If you later go back to the UK you could buy a new house with the investment. 

I am not a tax adviser, do not just take my word (or anyone else's on this forum) for it.  It could be very important to you to get this right.    

psy1967 wrote on Fri Jul 3, 2020 6:19pm:

Brian - you need to be very careful with this and get some proper tax advice.  

Matthew advises in the linked discussion "On a move to Spain the last thing I'd do is sell the house in the UK. This always was and is your main asset. At this moment you don't know if Spain is for yo...

Read more...

...u; you want it to be for you, but the bottom line is you don't really know."  

Now that may be very sound emotional/lifestyle advice, but the tax angle is this:  If you have lived in your principal private residence ("PPR", aka "home") for say 20 years, you almost certainly have a large monetary gain on it.  The gain that a UK tax resident makes selling their UK PPR is totally tax free. However if you become Spanish tax resident  and you have not sold your UK PPR then firstly you must report it on your Modelo 720 as an overseas asset, and secondly if/when you do sell you will be liable to pay Spanish tax on the entire gain since you bought the asset (not just since you became Spanish tax resident).  It would therefore be sensible from a tax advice viewpoint to sell your UK PPR before you become Spanish tax resident.  

If you have not owned your home / PPR in the UK for very long then maybe you don't have much gain to tax anyway, but as you asked the question I am guessing it is a serious consideration for you.  If you don't want to put all of your eggs in one basket (essentially what Matthew's advice was suggesting) then you should consider selling your UK PPR while you are still UK tax resident, and putting the proceeds into an appropriate risk investment(s).   If you later go back to the UK you could buy a new house with the investment. 

I am not a tax adviser, do not just take my word (or anyone else's on this forum) for it.  It could be very important to you to get this right.    

brian8182 wrote on Fri Jul 3, 2020 7:10pm:

Thanks hopefully house will be sold before residencia if we go that route 

What tax In Spain would I pay on savings i have in U.K. or , is it just on the interest ?

psy1967 wrote on Fri Jul 3, 2020 9:39pm:

The tax you pay on your UK savings depends to an extent on how you hold them.  Again, get proper advice.  I learned a lot by filing my first Spanish tax return for 2019.  As a very general rule, if you are Spanish tax resident then you of course pay Spanish tax on all of your world...

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...wide income, whether it is earned income, investment income or property income.  However if you hold shares/funds etc on an investment platform, then your dividends and gains are only taxable in Spain if you draw them.  There is significant scope for tax planning.