WDF – Offshore Property Sales – Spain

Spain is a country whereby HMRC can easily access details of property sales over there by their mutual agreements. Bank accounts held there, and property sales are regularly passing my desk when HMRC believe they have not been declared and clients receive the wrath of the revenue.

Much of the Revenues information is generally in the right ballpark but not always entirely accurate.

They may be out by a tax year or the figures they provide may not be accurate.

However, you can guarantee that they are on the right track and there will be that bank account or that property sale.

Therefore, do not worry if the information HMRC hold does not tally entirely with that that I may discover while dealing with your enquiry. However, it is the foot in the door for HMRC and must be addressed accordingly.

Many non-resident landlords may go to live abroad and rent out their previous private residence or other properties that they have acquired or inherited. The law is that wherever you reside UK tax is due on property is let out in the UK. Eventually HMRC may catch up with you through either their scans of the UK land registry and other widely available sources or through letting agents declaring the information to HMRC as they are obliged to.

Other people may have had a holiday home there that they then sell for one reason or another.
HMRC will get this information passed to them by the Spanish authorities, but it does not always result in tax being due in the UK.

This is because the Spanish authorities will deduct capital gains tax at source before you receive the sale proceeds. This is allowable against any UK capital gains tax due.

Alternatively, you may not have made a profit on the sale of the property when allowing its original cost and any allowable expenditure.

A specialist can soon advise you of this but whatever the outcome liaison with HMRC will have to be carried out to establish the correct position and have it agreed by the UK authorities.

As always even innocent taxpayers have the costs involved or engaging an advisor however it is invariably money well spent and relieves the stress of you personally having to deal with HMRC