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Spanish tax changes post Brexit

Spanish tax changes post Brexit

Postby Shiva » Mon Mar 02, 2020 8:56 am

The CAB Spain have drawn attention to the announcement by Spanish Tax authorities on tax implications of Brexit for UK citizens . Link here: https://www.citizensadvice.org.es/faq/b ... ident-tax/
Takes effect from January 2021.
From what I can see the most obvious impact is that the non residence tax rate goes up from 19 to 24 percent and also the CGT exemption clause whereby you get CGT exemption on sale of main residence in an EU country if you reinvest proceeds in another main residence in an EU country ( as far as I get this it would affect people selling in UK and buying in Spain or selling in Spain to buy back in UK, but haven't quite got my head round that clause and who it affects precisely , but it will be people moving to and for as UK no longer counts as an exempt eu country...)
There's other stuff about treatment of dividends and company profits etc but don't quite get it all and who it affects. Can anyone can do a user friendly simple interpretation....?
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Re: Spanish tax changes post Brexit

Postby Paulr » Tue Mar 03, 2020 9:20 pm

Yep, these are the rules for Third Country Nationals living in the EU, which UK citizens are, now that we've left the EU, albeit with a "stay of execution" until the end of the transition period. Something else to get used to, along with Schengen and other changes that may not even have dawned on us yet :roll:
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Re: Spanish tax changes post Brexit

Postby marcliff » Tue Mar 03, 2020 10:17 pm

At the bottom of all that is only one bit of good news. It states that the UK has an agreement on dual taxation with Spain which is not covered by the Brexit agreement therefore the "complementary" tax will still not apply.
I assume this means the agreement on not being taxed twice on the same income will still be in force. I do remember posting similar a couple of years ago when I pointed out the dual tax agreement was between UK and Spain and not UK and the EU.

The exemption for selling your main home in Spain means you do not pay CGT on the property if you are using all of it to finance another property anywhere in the EU (which includes UK at the moment). After next year you will have to pay CGT on your main home in Spain if you are buying in UK. It does mention a country outside the EU so, again I am assuming, but you will get the exemption if you are buying in, say, France. Just not in UK (or any other non-EU country).

May I point out that no agreements (apart from those mentioned in the Withdrawal Agreement) have yet been made. There may be many things agreed or not agreed over the next 9 months or so, even an extension on the transition period.
However, as the UK government has stated UK will not remain part of the Early Warning and Response System for communicable diseases between EU countries (bit of a kicker with what's going on at the moment) because it could affect Brexit agreements makes it seem likely a lot more things will change then we've previously guessed at.

Whilst neither me nor my wife have any wish to move back to UK, we are seriously discussing it because, as we get older, we have to think of our children. When we pass on the children will inherit and, as UK citizens, will be responsible for quite high taxes on our home. Add that to the community charges, non resident imputed taxes, utility standing orders plus inheritance taxes, it may be we could be leaving them problems in the future. Unless they get an extremely quick sale, the money we leave could run out rather quickly.

Total shame as we love it here. My wife especially with no arthritis, having had brilliant medical care, loving the weather, the way of life and so on. It's just something we have to talk about.
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