Tax residency

Information and questions about the Law in Spain and Andalucia.
Gasman
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Location: Huelva province

Re: Tax residency

Postby Gasman » Sat Oct 28, 2017 11:48 am

If you buy your next habitual residence BEFORE you sell your previous one, can you then claim to put the proceeds of the previous one into the purchase of your next one, having had to use other funds for that purchase initially ............... probably not??!!

El Cid
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Re: Tax residency

Postby El Cid » Sat Oct 28, 2017 1:07 pm

Manchesteral wrote:What I mean is that I have chosen to not become a long term resident ie more than 183 days which would necessitate tax residency. I'm probably breaking the law by 2 or three weeks in the long term but I come and go and do not live here permanently for the reasons stated in my original post.bSo far in 2017 I've spent 17 weeks in Gran Canaria and will probably return there around xmas time !


That sounds like a good plan. It's very unlikely you will have anyone looking over your shoulder, but it's worth remembering that it would be up to you to prove that you had not been in Spain, rather than the other way round so keep things like flight details etc.

Sid

Gasman
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Location: Huelva province

Re: Tax residency

Postby Gasman » Sat Oct 28, 2017 4:09 pm

OK - still planning .....

Miro
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Re: Tax residency

Postby Miro » Sat Oct 28, 2017 4:19 pm

Gasman wrote:If you buy your next habitual residence BEFORE you sell your previous one, can you then claim to put the proceeds of the previous one into the purchase of your next one...?


I haven't come across anything that specifically says you can't, but personally I would be wary of how Hacienda would interpret that scenario. Having said that, the instructions (in English) for completing the 210 say: " If the reinvestment was carried out before the transfer, the type of income entered should be code 33, and if the reinvestment was carried out after the transfer, code 34 should be entered. " The part in bold seems to suggest that it is possible.

It's in the coloured box, under "exemptions", on page 7: http://www.agenciatributaria.es/static_ ... _en_gb.pdf

Presumably the same would also apply if claiming the exemption, but as a tax resident & buying another property first in Spain, therefore?

Hope this helps.
Don't worry about what people think, they don't do it very often

"Acquiring a dog may be the only opportunity a human ever has to choose a relative," Mordecai Siegal 1935-2010.

El Cid
Andalucia Guru
Posts: 13501
Joined: Sun Oct 24, 2004 10:42 pm
Location: La Herradura, Costa Tropical, Granada

Re: Tax residency

Postby El Cid » Sat Oct 28, 2017 5:27 pm

I don't quite see what Form 210 has to do with it as that is normally for non residents or residents with second homes.

The normal roll over relief only applies to tax residents who sell their habitual residence and reinvest in another habitual residence.

The only way round it as far as I know is the buy the new home with a mortgage and when the original house is sold, use the proceeds to pay off the mortgage (partly or in full). That way you are clearly reinvesting. If you can afford to buy the new house from existing funds, then you cannot claim to have reinvested the proceeds.

It's a complicated area and things change so I would suggest some professional advice is needed here.

Sid

Miro
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Re: Tax residency

Postby Miro » Sat Oct 28, 2017 7:40 pm

Well, this thread is a bit confusing (evidenced by Gasman thinking your reply was to him, not Manchesteral!) as it talks about properties in both countries and the CGT implications of selling one or the other, and being tax resident in one or the other. Not sure if Gasman is planning on selling in Spain and buying in the UK, but I gave the example of the 210 because a) there's clear info in English and b) because that's what I have the most recent experience of on this subject. The "roll-over" relief applies to anyone selling their habitual residence in Spain, and reinvesting the proceeds in another property within the EU destined to be their habitual residence. I discussed this quite a bit here before we sold and decided to go the non-resident route, on account of us having not been in Spain 183 days this tax year. So our buyer retained the non-resident 3%, and we used modelo 210 to reclaim it - based on the clear instructions and examples given on the link I posted before. (Of course, we've yet to get it back, so time will tell if we did the right thing or not)
As I said, these instructions do mention the possibility that the new property was purchased "before the transfer" - presumably of the old property. And as I said, I'm assuming that if that is acceptable for non-residents, then logically the same would apply for residents too, i.e. they can claim exemption based on a property bought prior to the sale of their habitual home, as long as they can prove that the new one has become their new habitual home.
But yes, I absolutely agree that professional advice is needed. Unfortunately, good, reliable professional advice is very thin on the ground on these matters!
Don't worry about what people think, they don't do it very often

"Acquiring a dog may be the only opportunity a human ever has to choose a relative," Mordecai Siegal 1935-2010.

Gasman
Resident
Posts: 533
Joined: Fri Jul 24, 2009 10:53 am
Location: Huelva province

Re: Tax residency

Postby Gasman » Sat Oct 28, 2017 9:19 pm

OK - thanks Sid and Miro - we will see how things pan out and take advice when and if we get things off the ground ...
Cheers


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