Proceeds from House Sale

 Help required, please!  We will be selling our house in England sooner than expected.  We will of course be seeing an Independent Financial Advisor, but if anyone has any do's and don't's from their experience, we'd love to hear from you!   Thank you,  Donna  (Alicante Province).  PS The names of good IFA's would be useful.

Wh y do you need a finacial adviser in the UK to sell your house? Is it for investment advice? if so, do not put it in the stock market!!!!

 Hi, KP,

No, we don't want a FA to sell the house!  What we want is to find out is how to legally keep as much of the money  we get from its sale as possible given the current apalling savings rates.  Also, someone told us yesterday that if we were fiscal residents here in Spain, we might have to pay tax on this sale money to the Spanish Government.  Do you know if this is true?  nd if we no longer have a UK address, can we have a UK bank account?  That kind of thing...

Tax is not due on any property that is your main residence in the UK so no tax should be payable on it if this is the case.

Roberto has just posted a reply to another member regarding taxes due on property in Spain so there is no point me repeating it, it is best to look at that thread as all he says is correct. When you sell your home in Spain you may be liable to UK tax anyway as you will still be domiciled in the UK, tax on any investment property in the UK is taxed at 18% less any deductions you may have, property in Spain is also taxed at 18% with even less deductions allowable ..... basically what tax you don't pay in Spain you may end up paying in the UK anyway as there is a double taxation rule.. sorry.

It is always best to speak to a tax specialist if you don't understand these things as everybodys circumstances are different, failing that, a few nights on the computer searching the various sites will confirm everything you need to know.

As for investing the money...well.... I would definatley not put it in anything that is not guaranteed return of capital at least.

 If it were my money I would play it safe and keep it in the UK or at least with a UK based bank. Yes, you can still have a UK bank account with a Spanish address as you can with a visa card. There are lots of ads in the Spanish press about offshore investments but remember if it looks too good to be true it probably is and there is very little protection from companies based off shore!

 Thank you, again, Kp.  Where is Roberto's thread, please, and we'll look it up?  Slight confusion- we are resident in Spain with our own house here.  We pay taxes here.  Does that mean we are domiciled here?  Donna and Andy

The post I made was for someone selling property in Spain, so not perhaps relevant here? KP is correct though, if you are fiscal resident in Spain, all your worldwide assets / income should be declared here and will be taxed accordingly. Since the property in the UK is clearly not your principal residence any more, I suppose the sale would attract CGT - although maybe it will be exempt if you've owned it for a long time? Really not sure - also not sure if you don't mention it, if the Spanish authorities have any way of knowing / finding out about it anyway?

Yes, you can keep a UK bank account and give them your new Spanish address, possibly depending on which bank, but very few if any banks will offer to open new accounts for people without a UK address these days (I think HSBC may be the exception, and their savings rates are the worst), instead they will refer you to their off-shore counterparts - but beware, as few of these come under the UK's savings guarantee scheme. Internet banking is not supposed to be available to customers outside the UK for some stupid reason, which is a nuisance, especially since telephone service from UK banks sucks. If you do keep funds in a UK bank, you can request for the interest (such as it is) to be paid gross (i.e. no tax deducted) - which you will then have to declare in Spain (and pay 18% tax on).

As for what best to do with the proceeds of the sale - I'm currently working on setting up my own Ponzi scheme specially for ex-pats in Spain who need a home for their hard-earned (needs must when the Devil drives); I'll post details once it's up and running!!!

 Thanks so much, Roberto.  I look forward to your new site- providing we have any money left!   Donna.  The more info. we have, the better.

"Internet banking is not supposed to be available to customers outside the UK for some stupid reason,"

Hi, Roberto , what's all this then, it has never been mentioned to me. I use it with hsbc & lloyds tsb & all accts. are @ my address here in Spain. I even set up internet banking via power of attorney on my fathers accts. from here in Spain.I use it all the time.

Not sure actually, maybe I got it wrong, but when you go to the log in page on Halifax's website, for example, there's a note that says "If you are not a UK resident, or are trying to access this site from outside the UK, please read this important message.", and following the link takes you to this message:

"This site is intended for use by UK residents only. All products or other financial services accessible through this website are offered in the UK only.

If you are currently outside the UK (for example, when you are on holiday) and wish to use the service to view information about your accounts, you may do so. However, before using this site, you must ensure that you would not be breaking any laws or regulations within the jurisdiction by doing so.

You must not make any transactions or open any accounts using this site if you are outside the UK".

It's the last paragraph that made me think you are not supposed to use the service, apart from checking your accounts, if not UK resident, although the site doesn't actually prevent you from doing so (or so I'm told, er-hem)

And I know from personal experience, and also studying all the T&C of the major UK banks, that if you do not have a UK address and proof that you live there, it's nigh on impossible to open a new account these days.

Hi Musicdonna,

If you owned the house in the UK before you bought the house in Spain and you were resident in the UK with a holiday home in Spain, then there is no tax due on the UK home to either UK/Spanish tax authorities if the UK home was and always has been your main home.

If you then move that money to Spain you will pay tax on any savings income that generates here just as you would in the UK. These rates are due to be reviewed soon so it may not be that beneficial. Also remember that the exchange rate is very bad at the moment for bring £ to Spain and should the £ gain on the euro again and increase in value then if you take the money back to the UK you could lose a small fortune!!!

To be resident in Spain you would have to sign off with the UK government and declared that you were moving lock stock and 3 smoking barrels to Spain, then the UK government would transfer any social security benefits (for your health cover for 24 months only) to Spain until you have arranged your own health cover and they would also inform the Spanish tax authorities you have done this through the proper channels. If your main reason in doing this is to work here in Spain and pay taxes here in Spain then that is a good move but remember that some of the taxes and expemptions are worse in Spain than they are in the UK!

If you do not work or are not going to be employed by a registered company in Spain and are under retirement age you will not get Spanish healthcare in Spain just as would happen in the UK.

Also remember that if you pay tax on your money that is held in a UK bank and it is more than you would have paid in Spain then there would be no tax due in Spain as you do not pay it twice!

As you bought the house in Spain before you sold your house in the UK then the Spanish house will attract some tax when you sell it but that will depend on how quickly you register the house in Spain as your main residence, so do it quickly is my advice.

Roberto, let me know of your little investment scam, sorry scheme!!! and I will send you a few thousand myself!!!)

Mmmm......that's two on board already and I haven't even got beyond the thought stage. Perhaps a nice little pyramid scheme, that way you lot can do all the leg work and I'll just watch my stash grow? And of course, the more "investors" you bring in, the more likely I'll be able to pay you your dividends. Excellent!