Spanish tax

Hola , I am looking to move to quesada , I have sufficient funds plus spouse has Eire passport (e u).
I would look to rent as advised - "try before you buy"
My problem is my property in UK , if I rent out , I am subject to Spanish tax. ( Is this correct ) if I sell , same thing tax . Has anybody been in this situ . What is best resolve ?

You will be liable to tax on rental income in UK. You will also have to declare it in Spain but any tax paid in UK will be taken off the tax liability in Spain.

If you sell in UK before you become resident in Spain (which will be the first year you spend more than 6 months in Spain) then you will not pay tax. If you sell in the year you qualify for tax residency, ie being here more than 6 months in any one calendar year, you will be liable for capital gains tax on that property to the Spanish tax office.

In other words, become a resident in Spain before July 2023 (say) you will be liable to taxes in Spain for the year 2023. If you become a resident in Spain after July 2023 (say) you will not be liable for income or other taxes in 2023 but will be liable for all income in 2024.

Even if you sell in UK before moving to Spain, if it is in the first 6 months of the year you will be liable to tax. The rule is 6 months and 1 day in any one tax year (which is Jan to Dec in Spain).

Hola , please correct if wrong but capital gains tax is only paid if property used as buisness ( rented )
I have lived in property - no buisness or rental so don't qualify for capital gain tax so full value of property should be my "nest egg"

If property sold before Spanish residency acquired surely this has nothing to do with Spanish tax government.

Haggamania wrote:Hola , please correct if wrong but capital gains tax is only paid if property used as buisness ( rented )
I have lived in property - no buisness or rental so don't qualify for capital gain tax so full value of property should be my "nest egg"

If property sold before Spanish residency acquired surely this has nothing to do with Spanish tax government.

As Marcliff explained, if your property is sold before you become tax resident in Spain, it is not subject to Spanish capital gains. So, as you say, if your property is sold before Spanish residency acquired, it is all fine. However you were asking about the implications of renting for a while before buying. You could of course have sold up in UK also before renting , and just banked the money in anticipation of buying in Spain eventually, in which case again, no problem

It is just if you decide to rent sufficiently long to become tax resident in Spain before selling your UK property that a problem could arise. You then sell your UK property and you may well be liable to Spanish capital gains because you have sold it while being a Spanish tax resident. It is not like the UK where your primary residence is entirely exempt from capital gains. It used to be, pre-Brexit, that as a Spanish tax resident if you sold your main or primary residence and reinvested the proceeds in another main or primary residence, you would not be charged capital gains. But the property had to be in the EU, which obviously no longer applies to UK properties.

It is a little bit of a mine field, the Spanish capital gains charge could end up pretty steep ( they don't allow, for example for inflation etc, they'll tax you flat on the difference between the purchase price and sale price and that means if you bought your UK property a long time ago, it is likely to be a large amount.) But forewarned is forearmed; tbh any capital gains charge on your house is likely to be substantially higher than any money you might make out of renting your property in the Uk for a while before selling it . So really worth looking into this carefully and contemplating selling up before you become tax resident .

Hi thanks a lot , confirms for me exactly what I thought . Will be all sold up , money in bank , looking for rental in due course.

Same with driving , it's a minefield but it's licence (Brit) only valid for six month then need to pass theory and test ,

Thanks again.

Firstly in your first bit about the rent you are confusing UK rules with Spanish rules. In UK the CGT may only be on rented property but not in Spain. Once you move to Spain the UK house is no longer your main residence so CGT is liable on it.

Secondly, you cannot be a partial year tax resident in Spain. Once you become a resident and have lived here for more than 6 months in one calendar year, you become a fiscal resident for the entire year. Again, not like UK where partial tax residency is allowed.

You should plan very carefully on what you are going to do and, especially, when you move over.
Sell your house in Feb and become a resident before June (thus being in Spain for over 6 months) you become liable to taxes for the entire year, not just the 8 or 9 months you actually do live here.

However, move over after June and the Spanish tax people don't want to know you until the following year. Sell your house any time in 2023 but don't become a resident until ,say, September or October and you don't even fill in a tax return in 2024. You fill one in for the year 2024 but anything in 2023 is ignored UNLESS you have been resident in Spain for 6 months and 1 day in 2023 then your tax return in 2024 will be for the whole of 2023.

Contact a solicitor or it could cost you a lot of money. Don't assume UK and Spanish tax laws work the same way.