Do I have to pay CGT in Tenerife?

[soldup]

I eventually sold my home in Tenerife (non resident)& am ready to pay CGT in UK having owned it for 20 years but although I am a UK tax payer the Tenerife authorities want CGT paid there too.

It will cost me a lot more to pay in Tenerife than in UK because in UK I get entrepreneurs relief

Tenerife estate agents have suggested that if you dont pay CGT in Tenerife theres no penalty as long as you dont want to buy property in Spain within the next 4 years

They say that having taken the 3% retention & plus valia the Spanish taxman doesnt bother chasing for the rest.

Can anyone please offer me advice? If I dont pay in Tenerife what if anything can the Tenerife taxman do?

[Goldenmaniac]

If you have no further assets in Spain after you sell up it is unlikely that the authorities will chase up the Ganancia Patrimonial (CGT) having received the 3% retention - but the 3% WILL NOT be deductible against Uk tax under double impositions whereas the actual submitted calculation could be.

The four years is the number of tax years they can claw back in Spain but in real terms it's 5 years and 3 months.

Remember it's not a straight sum of sale minus purchase price because there are corrective co-efficients to increase the calculable value of the purchase for the years between purchase and sale see here http://www.agenciatributaria.es/AEAT.internet/Inicio_es_ES/La_Agencia_Tributaria/Campanas/No_residentes/Impuesto_sobre_la_Renta_de_No_Residentes/Cuestiones_destacadas/Ganancias_patrimoniales_derivadas_de_la_venta_de_u n_inmueble.shtml
Eg you bought in 1993 for 90k euros and sold in 2013 for 175k euros
capital gain is
175.000 less (90.000 x 1,3037 = 117.333) = 57.667 x 21% = 12.110,07
3% 175.000 = 5250
difference to pay 6.860,07
However the total of 12.110,07 should be deductible under double impositions in UK whereas the retention is not.
The plus Valia is a local authority tax and is not deductible under double imposition agreements
PM your actual figures and I'll work it though approx if you like

[delderek]

I eventually sold my home in Tenerife (non resident)& am ready to pay CGT in UK having owned it for 20 years but although I am a UK tax payer the Tenerife authorities want CGT paid there too.

It will cost me a lot more to pay in Tenerife than in UK because in UK I get entrepreneurs relief

Tenerife estate agents have suggested that if you dont pay CGT in Tenerife theres no penalty as long as you dont want to buy property in Spain within the next 4 years

They say that having taken the 3% retention & plus valia the Spanish taxman doesnt bother chasing for the rest.

Can anyone please offer me advice? If I dont pay in Tenerife what if anything can the Tenerife taxman do?

Just pay your 3 percent retention. The Spanish system will be happy with that. Forget about the UK-Spain systems are not that good,,,but only transfer the proceeds in lots of around pds 9000.00. Or get it changed into a sterling draft in Tenerife and pay into your UK account. (foreign currency imports attract more investigation)

[soldup]

I am so very grateful for your replies. I wish I had found this site years ago as I struggled with Tenerife paperwork.

I have already moved the cash to Uk at great expense & learnt a great deal about bank charges & exchange procedures the hard way

I will be sending a PM when I work out how to do it

Thanks again

[seanocelt]

Good luck, and i hope you take up Goldenmaniac's free offer of an estimate-she has helped many on the forum and is very reliable.