09 Dec 2006 12:00 AM:

I was considering purchasing off plan. At the start of my investigations into this I was told 2 things by the agent:
1. CGT in spain is reducing to 19% in January2007 and if you are a UK citizen you will only have to pay the 19% and not the 40% which I woul dhave to pay if the property was in the UK.
2. If you sell your property but buy another with the proceeds then you do not pay CGT.

I have since been advised that both of the above are incorrect.  Firstly a UK citizen is liable to UK CGT bo matter where the property is situated and therefore if you are a 40% tax payer then you will be liable for 40% CGT - although , I understand,that you may be allowed a tax credit for the CGT paid in Spain.
Secondly I was advised that the CGT is payable on the gain even though you are 'rolling' the profit into another property.

This makes a significant difference to any profit!!

You can see more about this at www.taxationweb.co.uk



Thread: CAPITAL GAINS TAX

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