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TaxRobin
TaxRobin, Tax Consultant
Category: Tax
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Experience:  International tax
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Hi, I live in the UK and selling my villa in Spain that I

Resolved Question:

Hi,
I live in the UK and selling my villa in Spain that I have had for 18 years. I'm 68 and disabled. I want to purchases two cheap flats to let in the UK. I pay all my taxes in both places.
It will cost me dearly to sell in Spain will I still have to pay capital gains in the UK (as 2nd home?) If I do could I use the money as a rollover.
Submitted: 3 years ago.
Category: Tax
Expert:  TaxRobin replied 3 years ago.
Hello and thank you for allowing me to assist you.
Unfortunately yes, you will have capital gains tax to pay if you sell. A second home, for example a holiday home in the UK or overseas, is subject to capital gains calculations.
The cost of your property is normally the amount you paid when you acquired it. If you spent money to improve that will lessen the gain.
Your sell price and the difference in your cost will be your gain and the amount that will be taxable.
If you sell or dispose of business assets (for example farmland that you farm) and reinvest the amount you received in certain other business assets then you could use a roll over relief but this would not apply to your personal second home unfortunately.
There is a Double tax agreement between the UK and Spain.
Article 13
CAPITAL GAINS
1. Gains derived by a resident of a Contracting State from the alienation of immovable property referred to in Article 6 and situated in the other Contracting State may be taxed in that other State.
Spanish tax payable under the laws of Spain and in accordance with this
Convention, whether directly or by deduction, on profits, income or
chargeable gains from sources within Spain (excluding in the case of a
dividend tax payable in respect of the profits out of which the dividend is
paid) shall be allowed as a credit against any United Kingdom tax
computed by reference to the same profits, income or chargeable gains
by reference to which Spain’s tax is computed
You would need to have your accountant apply for the credit on taxes you would pay in Spain when you file for UK.
Customer: replied 3 years ago.

Hi, I am paying a capital Gains and other taxes in Spain because I don't live there. is that correct ? and what can I expect to pay on a profit of £80,000 in the uk. Do i get any relief as I don't pay tax and only have my state pension of £112. a week.

Expert:  TaxRobin replied 3 years ago.
You have an annual exempt amount of £11,000. That amount of gain woudl not be taxable.
Your relief would also be to claim the tax paid in Spain. That is the relief I mentioned in the previous post. The Double Tax Relief.
The taxes you paid in Spain will act as a credit to teh UK tax .
Customer: replied 3 years ago.

Hi,

so are you saying that I would be paying CG on £80000- £11000- the Spanish taxes. (So how much would I pay on say £55000). What is the rate? and would I get any relief against last year as I only have a £6.000 yearly income with no extras.

when I asked about this in Spain they said I would not need to pay again in the UK.

Expert:  TaxRobin replied 3 years ago.
Your tax would be on the amount gain first so if your true gain is £80000 then the first £11000 of that is not taxable so that leaves £69000. Your rate would be 18%. £12420 in actual tax.
Your credit then would be looked at and that depends on how much tax you actually paid in Spain on the capital gain.
It is verey important that you get your gain correct. You must subtract your cost from your sell amount (less improvements and costs to sell).
TaxRobin and other Tax Specialists are ready to help you
Expert:  TaxRobin replied 3 years ago.
Hi Angela,
You are most welcome.
My goal is to give you excellent service.
Rating lets Just Answer know you were assisted and credits me for the time.