At Just Law Solicitors we are of the view that it is best to speak to us before you move to Spain. Why? Well firstly now you need to make the application for your visa before you come to Spain.
So if for example, you are looking for a non-lucrative visa here in Spain this has to be done before you make the move to Spain. Secondly, the issue of tax raises its head. If you spend more than 183 days a year in Spain you will have to pay tax.
At the present time, there is a double taxation agreement in place between the United Kingdom and Spain, so you don’t have to pay the same tax twice. In the UK there is no capital gains tax payable when you sell your home.
However, this is not the case in Spain. For example. Mr. Smith bought his house in the UK for £100,000 in 2000. He has been living there permanently. He sold the house for £160,000 on 01.03.2021 and moved to Spain the same day. In the UK no capital gains tax is due as it is his home.
He is a tax resident in Spain in 2021. Unlike the UK you pay capital gains tax on your main residence in Spain and in some cases your UK property when you’re a tax resident in Spain. In this case, Mr. Smith made a profit of £60,000. Capital Gains tax is calculated at 19/21/23% and he would have to pay £12.680.
He could avoid this by
(i) selling his property and reinvesting in his Spanish home;
(ii) waiting until he is 65 to sell his house; or
(iii) spending less than 183 days a year in each Spanish tax year or
(iv) selling his Uk property and then renting a house in the UK for a sufficient period of time before moving to Spain.
This example would apply in 2023
As with all our posts, this isn’t legal advice and if you have a tax issue in Spain we can help. Pablo one of our lawyers is a tax specialist We also have native English-speaking lawyers and we can also help with a property purchase in addition to residencia or residency in Spain.
Est. 1992 www.justlawsolicitors.com
Marisa Moreno Castillo
Senior Lawyer and Consul for Denmark.