CGT

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Robano
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CGT

Postby Robano » Tue Oct 05, 2021 7:57 pm

Thanks in advance for your advice and guidance.

I lived in spain from 2008 - 2010 during which time I rented out my Uk home. I am now selling that house and wonder if I am liable for CGT for the years that house was rented. I was registered and paying tax in spain during that period.

That of course was also an unusual period in that house prices fell during it.

Thanks
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casita-bonita
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Re: CGT

Postby casita-bonita » Tue Oct 05, 2021 9:00 pm

No. CGT is solely based on the financial gain made between buying and selling the asset. In this case a house. The rental income should have been declared as income on your annual tax return. But I'm guessing that since it was 10 years ago it has now passed tje statute of limitations.

If you are now UK resident and living in the house, ie it is your primary residence then no CGT will be due when you sell. If in the other hand if it's not your primary residence then you will be liable.

Caveat, I'm not a tax expert just didsome digging when we were looking at selling our uk house a couple of years ago. There are various allowences that you can offset and thetefore should consult a specialist for definitive numbers
Regards

Bob

Robano
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Re: CGT

Postby Robano » Tue Oct 05, 2021 10:53 pm

Thanks Bob

I understand that CGT is only on capital gains and that for a primary residence there is exemption. However when living in Spain the house wasn’t our primary residence but rented. So I understood that CGT may be due for those years.

However I was registered for tax in Spain for those years and maybe therefore not subject to that tax especially since the house actually lost value during that period.

Steve
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elusive
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Re: CGT

Postby elusive » Wed Oct 06, 2021 8:35 am

You say you lived in spain. Are you are spanish tax resident now or are you back in the uk. If you arent a spanish tax res then you owe hacienda nada.

. We rent in spain and rent our house out in the u.k.The CGT makes it impossible to sell up in the uk. The tax to be paid in spain is based off from when you bought the house in the uk to when you sell it. It doesnt have anything to do with the years it was rented out.

Maybe you are confusing it with uk CGT which you would also have to pay (on the gain from i think 2015) but there is allowances for the years you lived in the house before you rented it out.

casita-bonita
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Re: CGT

Postby casita-bonita » Wed Oct 06, 2021 10:57 am

In the same position regarding selling uk house. We would be looking at a cgt bill of over 60k from the spanish gov. What really *beep* me off is that they will be taxing me on gains made before i became a spanish resident. They may as well also demand back income tax from when i was working in the uk.

If we were uk residents and sold the house as it not being primary residence then the bill would be in the region of £6k after allowences and the 2015 cutoff date are taken into account. Of course that may change.
Regards

Bob

elusive
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Re: CGT

Postby elusive » Wed Oct 06, 2021 3:13 pm

What really *beep* me off is that they will be taxing me on gains made before i became a spanish resident.
------------
Yeah thats a good point. What also annoys me is that we have no gain as the uk house is our only property, our old family home before coming here. It is not a second home/investment. The rent we get from that helps to pay towards the rent here. How that can be compaired to someone rich enough to own 2 properties is beyond me. There should be different laws for the two totally different situations. Its probably the main reason why we wont stay here longterm. So haciendas loss in the long run.

Robano
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Re: CGT

Postby Robano » Wed Oct 06, 2021 3:26 pm

Does this 2015 rebasing only apply to people living out of the UK Do you know?
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elusive
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Re: CGT

Postby elusive » Wed Oct 06, 2021 5:49 pm

https://www.gov.uk/guidance/capital-gai ... l-property

The 2015,if im reading the above correct is in relation to non residents selling off uk property. I think before that if you were a non res you didnt pay anything?

Then theres the normal CGT for uk res selling uk property

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Wicksey
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Re: CGT

Postby Wicksey » Thu Oct 07, 2021 6:53 pm

elusive wrote: Wed Oct 06, 2021 3:13 pm The rent we get from that helps to pay towards the rent here. How that can be compaired to someone rich enough to own 2 properties is beyond me. There should be different laws for the two totally different situations. Its probably the main reason why we wont stay here longterm. So haciendas loss in the long run.
It does depend on the values of the properties, as I know people who put all the proceeds from their UK home into one here and have a property of 400K€ +. We however have split our money to buy two very small and cheaper houses together costing less than our friends' one big house here. I don't consider myself rich but we do have two properties.

We will also suffer a large CGT tax bill when we come to sell our UK rental house but there's not much we can do as we are not returning to England and will eventually need that money to go towards a larger house in Spain. The UK bill will be a fraction of what they charge here, a right pain, but we're going to just have to pay it when the time comes. My gestoria says we can move back to the UK for a period and de-register as a tax resident here without losing our residencia, but as we have animals and as I have no desire to upsticks and go back for a couple of years it's not feasible for us. We could not leave our home here long term unattended and in the end the whole palava of moving back temporarily would probably cost a good proportion of what we are trying to save :roll:

I would say, if you are thinking of moving back to the UK anyway, then you may as well move back into your house and sell it later on without any CGT due.


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