Capital Gains Tax in Spain on shares sold in a Gibraltar Company by its individual shareholders resident in UK for tax purposes, and whose only asset is a property in Spain.

A recent request for a tax ruling by the UK resident individuals, who held the shares in a Gibraltar property holding company, has helped to clarify the position on this matter.

The Spanish tax authorities held that the taxable event was not related to gains generated by nonresident individuals in Spain, but subject to the conditions laid down by international tax treaties, in this case the Double tax treaty between the UK and Spain. This DTT provides that gains derived from the sale of shares and other movable assets are subject to tax in the country of residence of the seller.

Consequently the tax tribunal ruled that the gain is liable to CGT in the UK.

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