Capital Gains Tax rollover relief/exemption

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02 Nov 2021 12:06 PM by cloudnine Star rating. 14 posts Send private message

Hello all,

I have a couple of questions on capital gains tax main home relief/exemption for under 65.


"Reinvestment relief is available to Spanish residents when they sell their main home and invest in a new one. To qualify for this relief, the property must be your main residence and you must have lived in it continuously for at least three years."

Q1. For a fiscal resident since 1 Jan, 2020, in order to qualify for the reinvestment relief, when will the 3 years be reached? Will it be 2 July, 2022 (upon being 183 days in Spain, hence becoming a tax resident for that year) or 31 December, 2022 (when year 3 is fully complete)?

"The main residence does not need to be in Spain to qualify for the relief, nor does the new home."

Q2. Can the new residence be located in England or only in the EU?

Thanks so much for any advice.





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02 Nov 2021 3:42 PM by mariedav Star rating in Ciudad Quesada. 1166 posts Send private message

From Abaco advisers

  • You can also be exempt from paying CGT if you have been a fiscal resident in Spain for three years and reinvest your money from your principal home in another principal home. However, you must continue to live in this new property for the next three years. The property you buy can be in any member EU state, but you must reinvest all the money. If you do not then you will be liable to capital gains tax in Spain on the difference.

 





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02 Nov 2021 6:57 PM by cloudnine Star rating. 14 posts Send private message

Hello mariedav,

Thanks for the info.

I have been a fiscal resident for 2 years so far (2020 and 2021). Next year (2022) will be my third fiscal year (which I need to have to be eligible for capital gains rollover relief). I am still unsure whether I would be classed as a fiscal resident for 2022 from 2nd July, 2022 (after being in Spain for 183 days of that year at that point) or whether I would have to wait until the end of December, 2022 to reach 3 years of being a fiscal resident. This is important as it may affect when I am able to sell my property (July, 2022 or Dec, 2022) and still be eligible for capital gains rollover relief/main home exemption. After residing in Spain for 183 days or more in any year, a person is automatically classed as a fiscal resident for that whole year so that's why I wondered if I could sell my home as early as July next year, rather than having to wait until the end of next year.

I hope I am making sense! 

THANKS TO ANYONE WHO CAN ADVISE.





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03 Nov 2021 7:53 AM by mariedav Star rating in Ciudad Quesada. 1166 posts Send private message

I think you'd need to speak to a gestor or solicitor about how that works but, just my opinion, wouldn't it be if you had completed three tax returns?
 

My reply was really the bit about only applying if you are purchasing a property in the EU which will become your main home.

 





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03 Nov 2021 9:07 AM by cloudnine Star rating. 14 posts Send private message

"wouldn't it be if you had completed three tax returns?

That's a good point. If I sold next year I would actually be declaring the house sale/request for exemption AND third tax return on the same return in June, 2023. Not sure whether that would present a problem.

I am looking for a competent tax professional who is well versed in capital gains tax, etc.

If anyone has used or knows of someone that is knowledgeable in taxes, please could you PM me. It would be really appreciated. THANK YOU.





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