Advice on capital gains tax when repatriating funds from spain

cjones1066

Hi all

im currently in the process of selling my holiday property in spain . I would like some tips and advice on how to bring the money back to the UK paying the least amount of tax. Im also reading things that my age may affect this (im over 65) . If anyone knows anyone the specializes in this kind of thing or can give advice.

Thanks in advance

Ian_W

Hmmm, it's 5yrs next month since we sold a property in Spain and I believe the CGT regimes in both counties have changed a bit in that time.

The basics as I understand them are:
The gain is the difference between the purchase price and the price you sell for, less your buying and selling costs (often a lot more in Spain than the UK). If you have made any capital improvements to the property the costs of those can also be deducted from the gain, these would be things that improve the value of the property rather than repairs or replacements of existing facilities. Then you can deduct your annual CGT exempt allowance of currently £10,100, if jointly owned you each have an allowance but would each need to declare half the gain and then apply the allowances individually. What gain is left is taxed at 18%. However, if you have paid a withholding tax (the buyer used to keep 5% - I think it's now less - of the purchase price and was responsible for paying this to the Spanish taxman, their liability if they didn't!) you can deduct this and any other Spanish CGT paid from the UK tax owed.

You used to be able to get taper and indexation relief relating to the length of time you owned the property but they were abolished when it went to a flat rate of 18% rather than 20 or 40% depending on your income.

AFAIK your age isn't any benefit and any half decent accountant should be able to help you do your tax return. Oh, and do try to sell before 6/4 as there are strong rumours that CGT is likely to go up to 25% in the next tax year.

Edited to add:
In respect of your age are you referring to Entrepreneurs’ Relief? AFAIK holiday homes abroad are considered an "investment" rather than a "business" even if let out and were never classified as Furnished Holiday Lets (which are a business, at least until 6 April!). I think you'd need expert advice as to whether you qualify but personally I doubt it.