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Will I pay tax?

Posted: Sat Jan 13, 2024 7:56am
12 replies6 members subscribed
Andy12

Posts: 51

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Location: Mar Menor

Joined: 22 Apr 2020

I have residencies. I rent In Spain. I still have my house in U.k.

Question is If I sell house in U k will I have to pay tax? I pay tax on U K

crissywissy

Posted: Sat Jan 13, 2024 9:11am

crissywissy

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Posted: Sat Jan 13, 2024 9:11am

It will be part of your world wide income so if you are tax resident in Spain then you’ll pay tax in Spain. You may also be liable for Capital Gains Tax in UK

Andy12

Posted: Sat Jan 13, 2024 9:33am

Andy12

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Posts: 51

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Location: Mar Menor

Joined: 22 Apr 2020

Posted: Sat Jan 13, 2024 9:33am

crissywissy wrote on Sat Jan 13, 2024 9:11am:

It will be part of your world wide income so if you are tax resident in Spain then you’ll pay tax in Spain. You may also be liable for Capital Gains Tax in UK

Accountant here says as it is a government pension I will  continue to pay tax in England at source. My understanding was as I don't own another property I won't be taxed if I sell in u.k to buy here.  A friend informed me I should check this before I sell in U. K

PeterC

Posted: Sat Jan 13, 2024 10:31am

PeterC

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Posted: Sat Jan 13, 2024 10:31am

Two different things: your government pension (assuming it is classified as a ‘Crown’ pension) will be liable to tax in the UK, but must be declared in Box 525 on your Spanish tax submission. It will not be taxed the same as other income but through some complicated system will slightly (?) increase your tax bill. Be aware that if you have been tax resident in Spain for some time you may be fined for non-submission and interest going back four years. A very common mistake by gestors etc in Spain is they seem unaware that the law on declaring this changed in 2016 and they think it is the same as Spanish Crown pensions, which do not have to be declared. Another good reason to do your own tax return, as the accountant will not pay the fines etc, you will.

Selling a property in the UK will bring a liability for capital gains so you need to weigh this up against your tax liability for assumed rental income.

Remember too that any asset held outside Spain worth over €50000 must be declared on Form 720, so houses, pension pots, investments etc come into this.

dave sierra golf

Posted: Sat Jan 13, 2024 4:12pm

dave sierra golf

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Posted: Sat Jan 13, 2024 4:12pm

Hola go very careful and seek advice     look for Spanish Solutions  in La Zena online     

I have been trying for a long time   (going into two years)    to stop paying taxes in the UK   and still fully taxed in Spain  

There is a vast difference in Spain to the UK     but then the UK tax man is of no help   

not even this so-called double taxation works ??

so keep in mind you only pay tax in the country you are resident    ???   so it is said   

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Andy12

Posted: Sat Jan 13, 2024 5:20pm

Andy12

Original Poster

Posts: 51

6 helpful points

Location: Mar Menor

Joined: 22 Apr 2020

Posted: Sat Jan 13, 2024 5:20pm

PeterC wrote on Sat Jan 13, 2024 10:31am:

Two different things: your government pension (assuming it is classified as a ‘Crown’ pension) will be liable to tax in the UK, but must be declared in Box 525 on your Spanish tax submission. It will not be taxed the same as other income but through some complicated system will slightly (?) i...

...ncrease your tax bill. Be aware that if you have been tax resident in Spain for some time you may be fined for non-submission and interest going back four years. A very common mistake by gestors etc in Spain is they seem unaware that the law on declaring this changed in 2016 and they think it is the same as Spanish Crown pensions, which do not have to be declared. Another good reason to do your own tax return, as the accountant will not pay the fines etc, you will.

Selling a property in the UK will bring a liability for capital gains so you need to weigh this up against your tax liability for assumed rental income.

Remember too that any asset held outside Spain worth over €50000 must be declared on Form 720, so houses, pension pots, investments etc come into this.

Seems unfair as I will need the money from house in England to buy here. I went for advice here and they said I didn't need to pay tax on my pensions here. They never mentioned completing any forms. 

PeterC

Posted: Sun Jan 14, 2024 5:58pm

PeterC

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Posted: Sun Jan 14, 2024 5:58pm

Moving to Spain means accepting the pluses and minuses - the are costs to wanting a bit of sun, and the system is not going to change just because you don't like it. Be very careful whose advice you take.

Andy12

Posted: Sun Jan 14, 2024 7:00pm

Andy12

Original Poster

Posts: 51

6 helpful points

Location: Mar Menor

Joined: 22 Apr 2020

Posted: Sun Jan 14, 2024 7:00pm

PeterC wrote on Sun Jan 14, 2024 5:58pm:

Moving to Spain means accepting the pluses and minuses - the are costs to wanting a bit of sun, and the system is not going to change just because you don't like it. Be very careful whose advice you take.

So whose advice do you suggest?

PeterC

Posted: Sun Jan 14, 2024 7:53pm

PeterC

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Posted: Sun Jan 14, 2024 7:53pm

Andy12 wrote on Sun Jan 14, 2024 7:00pm:

So whose advice do you suggest?

Do the research so that you rely on your own knowledge - anything else leaves you open to charlatans and barflies.

RichT

Posted: Sun Jan 14, 2024 8:32pm

RichT

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Posted: Sun Jan 14, 2024 8:32pm

Firstly, in the UK, if you sell a property which is not your main residence, then you will have to pay Capital Gains Tax (CGT). This appears to apply to you, as you state that you live in Spain - it doesn't matter if you are renting, it's the fact that your UK house is not your main residence. If you visit the gov.uk website, there is a useful Capital Gains Tax calculator.

Secondly, if you are already a tax resident in Spain, then if you sell your house in the UK, you will be charged CGT in Spain, but you can offset against that any CGT that you have already paid in the UK. 

Regarding your pension, PeterC's first post is correct.

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