I have Spanish residencia and have been submitting my tax return ( Renta ) to the Spanish tax Authorities (Agencia Tributaria since 2007. Last year I received an inheritance being my share from the proceeds of the sale of his house in the UK which was left in a trust. The share left to my step siblings was used to fund care home costs for my stepmother. My Spanish Tax Advisor informs me that I should pay capital gains tax in Spain but a Spanish Tax Solicitor has quoted the following"As the property is in England he theoretically will need to declare the gain in England and pay the CGT.Whatever he has paid in England through the double taxation agreement will be compensated in Spain.I wish to avoid double taxation so your advice would be much appreciated. Regards, ***** *****
I have received the following information from my solicitor:-
Further to our conversation my understanding is that Mrs. Brant had right to occupy the property constitutes an n accordance with the declaration of trust. She was also the sole legal owner and as such this constitutes an interest in possession..
As Mrs Brant was living in the property when it was sold she is able to claim that it was her principal private residence and therefore no capital gains tax is payable.
Your interest was in the proceeds once the property was sold.
Do feel free to ask your IFA to liaise with us.
My solicitor advises that as the house was my father´s wife´s primary residence no capital gains is due. My concern is whether the proceeds are liable for any form of taxation in the UK.