Capital gains tax for OAPs house sale

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olive
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Capital gains tax for OAPs house sale

Postby olive » Mon Oct 07, 2019 9:21 pm

At some stage we will have to sell our campo home and move into a town as age creeps on.

Am I right in thinking there will be no capital gains to pay if we are both OAPs at point of sale ? Is that Spanish retiring age? If so , what age would my partner need to be? She is currently working. We think it is 66 and ten months. House is in joint names. Intending then renting in Spain.

How critical are dates? How punitive is the tax if one or both are not retired? Ball park house figures - Declared purchase price 150k selling price 300k

elusive
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Re: Capital gains tax for OAPs house sale

Postby elusive » Mon Oct 07, 2019 9:42 pm

You have to have lived in it for the previous three years aswell.

Isnt it 20% tax on the gain? if your joint owners and one isnt oap its split down the middle ie half the profit is taxed.sure cid etc will clarify

Beachcomber
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Re: Capital gains tax for OAPs house sale

Postby Beachcomber » Tue Oct 08, 2019 6:45 am

You have to be able to prove you are a fiscal resident normally by presenting resident tax returns for the past three years.

The property must have been your primary residence for at least three years.

The law refers to being 65 years of age or over regardless of current retirement age.

Unless it has changed recently the CGT rate for residents ranges from 19% to 23% depending on the amount of the gain. Given the value of the gain in your case the tax would probably be the upper figure of 23%.

olive
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Re: Capital gains tax for OAPs house sale

Postby olive » Tue Oct 08, 2019 8:55 am

Thanks Beachcomber.

The residency and tax return elements isn't a problem.

On my notional figures, a 23% tax would be 30 to 40k,

Am I right in saying that there isn’t a tax bill if you invest some of the sale proceeds in a downsizing property as your main residence and keep the rest of the capital?

Beachcomber
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Re: Capital gains tax for OAPs house sale

Postby Beachcomber » Tue Oct 08, 2019 10:14 am

When you reinvest you have to pay CGT on the balance, ie. the portion not used for the reinvestment.

If you and/or your wife are close to 65 it is worth waiting. Remember, the law says 65 years of age or older. It does not refer to retirement age which could be higher.

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marios
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Re: Capital gains tax for OAPs house sale

Postby marios » Wed Oct 23, 2019 9:07 am

Just to resurrect this thread is the above quote the same if you reinvest back your main residence from Spain into buying your main residence in UK.

El Cid
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Re: Capital gains tax for OAPs house sale

Postby El Cid » Wed Oct 23, 2019 10:02 am

Yes, you can reinvest outside Spain.

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Re: Capital gains tax for OAPs house sale

Postby marios » Wed Oct 23, 2019 12:30 pm

Thanks Cid.

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Re: Capital gains tax for OAPs house sale

Postby Beachcomber » Wed Oct 23, 2019 1:53 pm

But I think the exemption only applies to reinvestment within an EU or EEE member state.

El Cid
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Re: Capital gains tax for OAPs house sale

Postby El Cid » Wed Oct 23, 2019 3:47 pm

I read that it was OK if the other country had a tax information exchange agreement, which I assume the UK has with Spain. Worth checking out though - assuming you can find anyone who actually knows!

Sid

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Re: Capital gains tax for OAPs house sale

Postby Beachcomber » Wed Oct 23, 2019 4:41 pm

The way I read this indicates 'and' rather than 'or' but my interpretation is open to challenge, I hope I am wrong:

"...los contribuyentes residentes en un Estado miembro de la Unión Europea o en un Estado miembro del Espacio Económico Europeo con el que exista un efectivo intercambio de información tributaria..."

https://www.agenciatributaria.es/static ... Q_GF07.pdf

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Re: Capital gains tax for OAPs house sale

Postby blueskies » Mon Nov 01, 2021 11:40 am

marios wrote: Wed Oct 23, 2019 9:07 am Just to resurrect this thread is the above quote the same if you reinvest back your main residence from Spain into buying your main residence in UK.
El Cid wrote: Wed Oct 23, 2019 10:02 am Yes, you can reinvest outside Spain.

Sid
Beachcomber wrote: Wed Oct 23, 2019 1:53 pm But I think the exemption only applies to reinvestment within an EU or EEE member state.
El Cid wrote: Wed Oct 23, 2019 3:47 pm I read that it was OK if the other country had a tax information exchange agreement, which I assume the UK has with Spain. Worth checking out though - assuming you can find anyone who actually knows!

Sid

Hi all,
Does anyone know if what El Cid read as his post above (that it was okay to reinvest the proceeds from a Spanish house sale into another country, ie UK, as long as it has a tax information exchange agreement) is correct?
Thx


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