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Capital gains tax
Re: Capital gains tax
by Paulr » Mon Oct 15, 2018 7:35 pm
Great analysis Pete, well explained. We're hanging onto our UK property for that very reason.
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Paulr - Posts: 1122
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Re: Capital gains tax
by nigieboy » Wed Oct 17, 2018 9:25 am
Thanks for advice...I have read cgt in spain is
19%...and if I inderstand Marcliffe I would only pay this on any gains after residency, should I sell my uk property.
19%...and if I inderstand Marcliffe I would only pay this on any gains after residency, should I sell my uk property.
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nigieboy - Posts: 436
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Re: Capital gains tax
by marcliff » Wed Oct 17, 2018 10:26 am
CGT is 19 to 23 per cent on a sliding scale for residents. Over 50,000 and it attracts 23% on any increase in value after you become resident.
Now, it would totally depend on your circumstances on whether you retain the property in UK or not.
For us, it was a no brainer. We had property here as non-residents for over 12 years. For the last 3 or 4 we had been living here almost 6 months of the year so knew that we wanted to live here on a permanent basis.
Others who come over and buy should definitely wait until they decide they like it here or not. Many find it is so different and are missing their families that they want to go back after a while and have no property to go to.
Others, of course, need the money from the sale of their UK property to fund a property in Spain. Not everyone is lucky enough to be able to afford two houses so, for them, they would have no choice especially if they are getting to an age where a mortgage is difficult to get or do not have the income to afford one.
We rented our house out in UK for 5 years when we lived in Cyprus and then Germany. When we got back, we had to spend more to get the place done up than we made as the place had gone to rack and ruin despite paying an agency to look after it. Things like window frames not being maintained so rotted, oven door falling off, side panel of bath ripped off to get to leaky tap and ceiling below ruined due to drip. Painting over wallpaper with gloss paint (and around wardrobes) etc etc. For this reason we decided against renting out.
When we did move over, we still had 3 properties. A house in UK, a holiday apartment here in Spain and the house we moved to permanently. The bills kept adding up, council tax in UK in particular was a huge drain at some 150 pounds a month. Then council tax for 2 properties here. The holiday apartment was rented but only for a few months a year which just about covered the utility standing charges and the IBI but not the tax bill on the income. Then the standing charges in UK as we had to pay for gas and electricity and water (couldn't get it disconnected or the pipes would freeze in the winter) and telephone etc. Also impossible to stop the TV license (you ever tried to do it?).
So, we decided the only prudent thing was to sell up in UK but we had already made up our minds we wanted to stay here because we had been coming here for so long and knew exactly what we were getting into.
We sold in December 2010 and moved across and become Spanish residents in Jan 2011. No CGT, the money from the house sale is in a bank account in UK and lets us do what we want, holidays, new kitchen, improvements, new car etc so we are quite happy.
However, everyone has their own personal set of circumstances. You need to know the pitfalls either way either on lifestyle or taxes. Don't let anyone tell you what is best for you or what to do as your needs will be different to theirs.
Just weigh up the pros and cons and do what is right for you, not for them.
Now, it would totally depend on your circumstances on whether you retain the property in UK or not.
For us, it was a no brainer. We had property here as non-residents for over 12 years. For the last 3 or 4 we had been living here almost 6 months of the year so knew that we wanted to live here on a permanent basis.
Others who come over and buy should definitely wait until they decide they like it here or not. Many find it is so different and are missing their families that they want to go back after a while and have no property to go to.
Others, of course, need the money from the sale of their UK property to fund a property in Spain. Not everyone is lucky enough to be able to afford two houses so, for them, they would have no choice especially if they are getting to an age where a mortgage is difficult to get or do not have the income to afford one.
We rented our house out in UK for 5 years when we lived in Cyprus and then Germany. When we got back, we had to spend more to get the place done up than we made as the place had gone to rack and ruin despite paying an agency to look after it. Things like window frames not being maintained so rotted, oven door falling off, side panel of bath ripped off to get to leaky tap and ceiling below ruined due to drip. Painting over wallpaper with gloss paint (and around wardrobes) etc etc. For this reason we decided against renting out.
When we did move over, we still had 3 properties. A house in UK, a holiday apartment here in Spain and the house we moved to permanently. The bills kept adding up, council tax in UK in particular was a huge drain at some 150 pounds a month. Then council tax for 2 properties here. The holiday apartment was rented but only for a few months a year which just about covered the utility standing charges and the IBI but not the tax bill on the income. Then the standing charges in UK as we had to pay for gas and electricity and water (couldn't get it disconnected or the pipes would freeze in the winter) and telephone etc. Also impossible to stop the TV license (you ever tried to do it?).
So, we decided the only prudent thing was to sell up in UK but we had already made up our minds we wanted to stay here because we had been coming here for so long and knew exactly what we were getting into.
We sold in December 2010 and moved across and become Spanish residents in Jan 2011. No CGT, the money from the house sale is in a bank account in UK and lets us do what we want, holidays, new kitchen, improvements, new car etc so we are quite happy.
However, everyone has their own personal set of circumstances. You need to know the pitfalls either way either on lifestyle or taxes. Don't let anyone tell you what is best for you or what to do as your needs will be different to theirs.
Just weigh up the pros and cons and do what is right for you, not for them.
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marcliff - Posts: 9694
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Re: Capital gains tax
by nigieboy » Sun Nov 18, 2018 3:26 pm
Thank you for your responses..am now looking at gifting the uk home to the children and the tax implications on them
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nigieboy - Posts: 436
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