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Taxation advice .....UK or Spain ??

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Taxation advice .....UK or Spain ??

Post by amm1007 on Sun May 08, 2016 1:32 pm

Hi

I haven´t seen a pòst covering what I hope is a simple answer ( if there indeed is one ! )
But having been a permanent resident of Spain ( declared to HMRC ) from August 2008
I am now looking to sell some property and gift what is allowable to my children
and then go on a near permanent holiday , lol Smile

My question should be simple !
But the answer has been confused by HMRC rules .

It appears that if you hold a UK passport , and will be ( December 2016 )
receiving a UK pension, then the HMRC seem to be saying that UK taxation rules apply to me ?
Is this true ?

I don´t mind either way ( UK or Spain ) but would like to know any definitive answers
if such things exist !
Mainly on Inheritance tax

Hope someone has some advice or knowledge of a good website for info
Andy

Ps , Have the UK and Spanish wills sorted .



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Re: Taxation advice .....UK or Spain ??

Post by pete_l on Sun May 08, 2016 3:00 pm

Is the property you are selling in the UK or in Spain?

If it's in the UK and it is not your "primary residence" - and since you have lived in Spain since 2008 it wouldn't be - then in simple terms you'd pay CGT on the price increase since you bought it. You can check [You must be registered and logged in to see this link.] for more accurate advice.

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Re: Taxation advice .....UK or Spain ??

Post by Lurchio on Sun May 08, 2016 3:08 pm

Nothing to do with the UK passport, you have been here over 183 days in any one tax year, so you are a Spanish Tax resident. In all that time, it has also become your 'centre of economic interests', so again you are a Spanish Tax resident. Any UK Pensions will have to be declared as Worldwide Income to the Hacienda. Speak to HMRC, but for Gods sake ask to speak to a Technical Advisor, I have had nightmares with the 'helpline' telephone staff.
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Re: Taxation advice .....UK or Spain ??

Post by amm1007 on Sun May 08, 2016 3:12 pm

[quote="pete_l"]Is the property you are selling in the UK or in Spain?

Hi ...all my assets are in Spain...so all money and property .
Really my question is if CGT is applicable ...is it paid to the UK / HMRC ?
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Re: Taxation advice .....UK or Spain ??

Post by Lurchio on Sun May 08, 2016 3:26 pm

Also, Inheritance tax rules in Andalucía have changed since an EC Court ruling. Prior to the ruling there were TWO systems, the 'National' and 'Autonomous Community' rules, dependant on how long you had been resident in Spain (Five years was the baseline). Spain were penalised for having prejudicial regimes against a Europeans right to freely move around the EC. Basically as a result, if you are a 'Category One' relative ( Son, Daughter) then the first 176k euros is tax free. IF the gain is over that, they pay tax on the WHOLE amount, not the amount over 176k! Got to say, take professional advice, I did! Not connected with them AT ALL, but Belvin Franks specialise in this kind of thing. As a matter of fact, make sure you get the right advice off professionals on this one, its a minefield and you won't want a load of grief dumped on loved ones!
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Re: Taxation advice .....UK or Spain ??

Post by Lurchio on Sun May 08, 2016 3:30 pm

As regards your last, are you a Spanish FISCAL resident? If so, I think the tax is due in Spain, as it is part of your worldwide income in your circs. Did you have to declare it on a Modelo 720 (Worldwide assets over 50k euros). It can get complicated, eh? Professional advice mate.
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Re: Taxation advice .....UK or Spain ??

Post by amm1007 on Sun May 08, 2016 3:31 pm

Hi Lurchio

On the point of being a Spanish Tax Resident , agreed !
I pay taxes to Spain via my Banks and annual declarations , so it´s deducted at source .
Especially as I have no property or money banked in the UK now .
But do have 2 UK based annuities , as well as the UK state Pension to come .....so they ( if exceeding the threshold ) will be taxed at source by HMRC .

However !...2 weeks ago , I was reading all the HMRC site and others ( so called Experts for ExPats types aka Rubbish ) and there is indeed a section , whereby they explain ( for IHT ) that if ( regardless of living permanently in Spain ! ) you have income from the UK, have a UK passport , could have contributed a percentage of your Pension earned within the last 20 years ( so that´`s me ! ) then they consider you to be a Tax Payer of CGT / IHT to the UK . ( ???? )

I have phoned them....as you say no joy there !
and emailed them for clarification .....2 weeks ago now
no reply yet !
One of my Daughter´s hubbies is a Financial Expert ( by clearly mainly UK ) so have asked him to do some checking .
Really it is based on my Estate being paid to daughter´s in the UK , and they suggest I am using the UK IHT formula for taxation ..thus not payable to Spain .

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Re: Taxation advice .....UK or Spain ??

Post by Lurchio on Sun May 08, 2016 3:37 pm

Nightmare! HMRC have a dedicated e mail contact form for Non residents, it starts KCMT I believe. Try that one, its always got a quick reply (4 days) for me, and they seem to be more helpful.
Unfortunately, there is NO reciprocal Double Tax Treaty between Spain and the UK in relation to Inheritance Tax, so you'll have to get it from the horses mouth as to who gets what tax. Belvin Franks, check out the website.
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Re: Taxation advice .....UK or Spain ??

Post by amm1007 on Sun May 08, 2016 3:41 pm

Lurchio x 2
Yes, Spanish Fiscal and tax paid at source .
Had read about the EU v Andalucia , but we are now treated as a Spaniard would be .
176 K is not much, is it ? not compared to the UK 325 K GBP and value of your home now . I better look up Spanish IHT systems then .
Albeit , still not 100% that I will not end up paying the UK rate
so that is the main issue ......Professional advice then !!
Cheers
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Re: Taxation advice .....UK or Spain ??

Post by amm1007 on Sun May 08, 2016 3:45 pm

Lurchio wrote:Nightmare! HMRC have a dedicated e mail contact form for Non residents, it starts KCMT I believe. Try that one, its always got a quick reply (4 days) for me, and they seem to be more helpful.
Unfortunately, there is NO reciprocal Double Tax Treaty between Spain and the UK in relation to Inheritance Tax, so you'll have to get it from the horses mouth as to who gets what tax. Belvin Franks, check out the website.

Sent email to that help section .....it states 10 days now ......so waiting !!
OK, Belvin Franks here I come
Thanks !
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Re: Taxation advice .....UK or Spain ??

Post by Lurchio on Sun May 08, 2016 3:47 pm

You're welcome, its a minefield alright!
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Re: Taxation advice .....UK or Spain ??

Post by amm1007 on Sun May 08, 2016 3:58 pm

Lurchio wrote:You're welcome, its a minefield alright!

I am on the website now Smile
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( plus I have a house in France too ! )
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