Cost of Living in Fuerteventura

[GMT]

I'm not sure whether anybody mentioned this before but maybe Pete Garyga should take into consideration that if he sells his property in the UK, goes to Fuerteventura after that, and then takes residency (fiscal as well) in Spain (any part of Spain), he will have to declare the capital gain (if there is any) coming from the sale in the UK in the next Spanish tax return, which is taxed at 19%. If he were over 65 years old this wouldn't apply to him. Please somebody correct me if I'm wrong.

Perhaps he knows already though.

Thanks.

[Pete Garyga]

I'm not sure whether anybody mentioned this before but maybe Pete Garyga should take into consideration that if he sells his property in the UK, goes to Fuerteventura after that, and then takes residency (fiscal as well) in Spain (any part of Spain), he will have to declare the capital gain (if there is any) coming from the sale in the UK in the next Spanish tax return, which is taxed at 19%. If he were over 65 years old this wouldn't apply to him. Please somebody correct me if I'm wrong.

Perhaps he knows already though.

Thanks.

Thanks for the info, I wasn't aware of that.

[Spitfire58]

Would he not be able to complete a tax return in the U.K. before taking up Spanish fiscal residency & therefore paying (if any) CGT in U.K. which I assume would likely be a lower rate

[windermeregolfer]

Would he not be able to complete a tax return in the U.K. before taking up Spanish fiscal residency & therefore paying (if any) CGT in U.K. which I assume would likely be a lower rate

Sorry, but unless I have missed something  my understanding is if you are selling your main residence in the UK there is NO CGT and based on a friends experience a couple of years ago if you buy a new house and move in whilst still trying to sell your old one and rent the old one out you get a years grace before having to pay CGT on a second home.

[GMT]

I mentioned about the CGT because of what is happening to us now. We sold our property in the UK in May 2019, we came to Spain at the very end of May 2019, we applied for residency in June 2019. At present our accountant is doing the annual tax return here in Spain for 2019, which covers up to June 2019. She told us that because we are under 65 and we haven't been fiscal resident for at least three years here in Spain, we have to pay CGT. She also said that if we had become residents in July rather than June we wouldn't have paid CGT, i.e. if we had rented in the UK and then come to Spain and applied for residency in July we wouldn't have paid CGT. She said that some customers of hers had to pay CGT just for a day, i.e. they became residents on June 30. A practical joke! I thought Pete, and anyone else, may benefit from our inexperience in order to plan wisely for the future.


https://blog.abacoadvisers.com/calculati...-in-spain/

[Jason W]

Just wondering if you took professional advice either in the UK or Spain prior to applying for residency and if so what if any claim you might have against such adviser.
The sale in the UK  would be whilst you were UK resident, the date for UK taxes is the date of exchange of contract not the completion date. So, albeit no tax is payable in the UK as it is exempt as private residence, it would however strictly form part of your UK taxes whilst resident. I would take a second opinion if the amount of tax warrants it. Had the property been chargeable to UK tax (which it is not) you would be looking at double taxation which doesn't seem right. It would be reported in 2 tax returns.

[stewart1875]

I mentioned about the CGT because of what is happening to us now. We sold our property in the UK in May 2019, we came to Spain at the very end of May 2019, we applied for residency in June 2019. At present our accountant is doing the annual tax return here in Spain for 2019, which covers up to June 2019. She told us that because we are under 65 and we haven't been fiscal resident for at least three years here in Spain, we have to pay CGT. She also said that if we had become residents in July rather than June we wouldn't have paid CGT, i.e. if we had rented in the UK and then come to Spain and applied for residency in July we wouldn't have paid CGT. She said that some customers of hers had to pay CGT just for a day, i.e. they became residents on June 30. A practical joke! I thought Pete, and anyone else, may benefit from our inexperience in order to plan wisely for the future.


https://blog.abacoadvisers.com/calculati...-in-spain/

thats interesting,
if i understand that properly it means that this COVID 19 lock down may have inadvertently worked in my favour ! 
 i sold my house in the U.K. during jan  this year, bought in fuerte in feb with plans to relocate in April and apply for residency at that time. however as i am not able to fly over until mid July will this mean i will be outwith the 183  day tax rule for this year ?

[windermeregolfer]

Would he not be able to complete a tax return in the U.K. before taking up Spanish fiscal residency & therefore paying (if any) CGT in U.K. which I assume would likely be a lower rate

Sorry, but unless I have missed something  my understanding is if you are selling your main residence in the UK there is NO CGT and based on a friends experience a couple of years ago if you buy a new house and move in whilst still trying to sell your old one and rent the old one out you get a years grace before having to pay CGT on a second home.

Sorry I should have said not pay CGT in the UK

[GMT]

Just wondering if you took professional advice either in the UK or Spain prior to applying for residency and if so what if any claim you might have against such adviser.
The sale in the UK  would be whilst you were UK resident, the date for UK taxes is the date of exchange of contract not the completion date. So, albeit no tax is payable in the UK as it is exempt as private residence, it would however strictly form part of your UK taxes whilst resident. I would take a second opinion if the amount of tax warrants it. Had the property been chargeable to UK tax (which it is not) you would be looking at double taxation which doesn't seem right. It would be reported in 2 tax returns.

I know it's hard to believe but unfortunately that is the reality. You don't pay CGT in the UK because it's your first home (and anyway we weren't doing any tax returns because we were employees), right, but you pay here in Spain, because they want you to pay given that there is no double taxation, we are under 65, and we haven't been fiscal residents for more than three years. Unfortunately, we didn't take professional advice neither in the UK nor in Spain prior to applying for residency, and the Spanish solicitor we had at that time is a sort of crook anyway, not reliable; we have changed solicitor now. It's very likely that  if we had applied for residency after June 30 we wouldn't be in this situation, as we wouldn't have needed a tax return for 2019 and next year we wouldn't have had to include the UK sale. I'm afraid it is what it is.

[GMT]

I mentioned about the CGT because of what is happening to us now. We sold our property in the UK in May 2019, we came to Spain at the very end of May 2019, we applied for residency in June 2019. At present our accountant is doing the annual tax return here in Spain for 2019, which covers up to June 2019. She told us that because we are under 65 and we haven't been fiscal resident for at least three years here in Spain, we have to pay CGT. She also said that if we had become residents in July rather than June we wouldn't have paid CGT, i.e. if we had rented in the UK and then come to Spain and applied for residency in July we wouldn't have paid CGT. She said that some customers of hers had to pay CGT just for a day, i.e. they became residents on June 30. A practical joke! I thought Pete, and anyone else, may benefit from our inexperience in order to plan wisely for the future.


https://blog.abacoadvisers.com/calculati...-in-spain/

thats interesting,
if i understand that properly it means that this covid 19 lock down may have inadvertently worked in my favour ! 
 i sold my house in the U.K. during jan  this year, bought in fuerte in feb with plans to relocate in april and apply for residency at that time. however as i am not able to fly over until mid july will this mean i will be outwith the 183  day tax rule for this year ?

I suppose you should be off the hook.