Starting the process of selling and visa application - Page 4

Good Morning, just reading this thread trying to get my head around it all. Am I right in my understanding then, if you sell your house, its best to wait 6 months before applying for your NLV to avoid CGT? Many thanks

Hello there. We got the tip off someone on here and subsequently found out independently too. The Spanish tax year runs Jan to Dec. If you are in spain for more than 183 days within this tax year you become a tax resident and will also pay capital gains on a sale of a property in the UK. So if you moved late July early August you won't have been in Spain for more than 183 so the following year you won't pay capital gains. If you were to move earlier then the following year the spanish tax system will recognise you as a taxable resident and tax you on the property sold in the UK. 

JBTxx

Pardon me for hijacking your thread, but I find the tax situation a little confusing! Surely if you take up residency on a given date, then you're only subject to tax on transactions from that date on? So if I register on, say, 1st May, having sold my house in April, then my first tax return in Spain would only cover 1.5.22-31.12.22 and thus exclude any CGT on a sale pre-1.5.22?

I'm not selling my house before moving, as I'm renting, but I am waiting here in the UK for an inheritance to fund my move. It is tax-free here in the UK, but would be subject to tax in Spain, so I'm a little worried. If I wait till I move before checking this, I could potentially leave a big hole in my finances!

Any advice appreciated.

Put simply, if you are living in Spain for 183 days in a calendar year then you are tax resident for the whole of that year.

The best thing is to take advice from a lawyer/accountant here in Spain.

We sold our house in May 2019 and moved to Spain that month. We had previously received specific professional advice that we would not pay tax in Spain on our house sale in the UK. We found out that was not correct. Fortunately, we had all the receipts for work we had done on the house in the UK over the previous 12 years and this was offset agains the capital tax, so the amount we had to pay was minimal.

The situation is that if you move to Spain and are here for 183 days in that year, you will be a fiscal resident and liable to tax on your worldwide income (subject to the dual tax agreement between the UK and Spain, where certain UK Gov pensions have tax deducted in the UK and not in Spain.). So if you move permanently to Spain in May 2022, you will be taxed as a Spanish resident for the year 2022. The tax year in Spain runs from January to December. 

Please check how your inheritance will affect your tax situation before you move. 

Good luck with your move and I hope this helps?

Hello. Its not the easiest to understand and can be a worry. Count back 183 from December and don't arrive in spain before this date. That's how we are doing it he move. We are 5 weeks away from completion of UK sale so will tour the UK in our caravan, do our NLV paperwork and book our  consulate appointment date inline with us reaching the July date so we fall into not being a tax resident on entering Spain. I'm sure they'll be quite busy with expats doing the same to avoid the tax rule, plus they're still on strike so may have a backlog,so we may even book an appointment now and book a June date so we get our timings correct... This forum and the people have been invaluable to us.  

JBTxx

Thanks for the replies, much appreciated. I'm going to hang fire on actually moving to Spain till past the half-way point. Won't stop me going ahead with the purchase of a house there though! 

HiWe are in exactly the same position as yourselves - coming out to Camposol next month to get a feel for the place then putting our house on the market - hoping to be in a position to move by next Jan/Feb when my husband is retiring 

We are looking at maybe using a relocation agent - we’ve been quoted £1000 but they do a lot of the leg work including translating documents etc

Good luck with your plans - maybe we could meet up for a drink when we are all settled!!!!

Sounds a great idea 👍😀

Not sure if this is repeat advice but there’s a really helpful Facebook page devoted to the NLV process. Franki did you have to take a Padron to get your TIE? I was told that it wasn’t necessary with NLV but sent away wasted journey etc …

Good luck to all 💁🏼‍♀️