Income tax - UK and Spain

Jonnno wrote:My original reason to post this item was related to payment of tax on a UK government pension.

My accountant originally arranged for tax on my NHS pension to be paid in Spain and that has been the case for several years. That is now being challenged by my new accountant. I dont know the rights and wrongs of that but at present trying to unravel.

So info on other peoples actual experiences (rather than other peoples theories) would be welcome. Thanks.

Espanabums wrote:

Pete31 wrote:Hi, so if you have sold a house in the uk how do they know over here if you have sold it?

If you sold a house in UK that sale should be reported to HMRC, with a view to capital gains tax, via self assessment. If you do not normally submit a self assessment return In UK, the sale will be notified to HMRC by both your conveyancing agent and Estate agent. Even if you sold the house privately and did your own conveyancing, HMRC would get to know about the sale through the land registry.

If you are a Spanish resident, you should have declared the asset using the modelo 720 form and again when it is sold and you no longer hold it as an asset. If you have been letting the property you should have been declaring the income. If you have not been letting the property, you should still declare it on your Spanish tax return as you are liable to pay imputed tax much as non Spanish residents pay imputed tax on their holiday homes.

If you are not a Spanish resident you will be liable for capital gains tax on your sale of a UK property if it was sold within the full year that you became a Spanish resident.

If you have recently moved to Spain and declared to HMRC that you are changing from being tax resident in Spain, rather than tax resident in UK, then HMRC will share Information with Spain during the transition.

Whilst we are in transition due to Brexit, you may be able to use the proceeds of your UK house sale to fund you purchase of a Spanish property, without incurring capital gains tax.

Tax offices throughout Europe are now fully joined up with reporting of capital movements.

Espanabums wrote:

partygoer wrote:
We may be talking at cross purposes here but here goes
See...

https://www.gov.uk/tax-uk-income-live-abroad/rent.

OH is registered on the non resident landlord scheme with HMRC which means that tax on the income is not taken at source by the Agent who manages our property.. but is declared on the OHs UK annual self assessment form.The HMRC issue an NRL number so that our Agent knows they cannot take tax off of the income.
I've attached a picture of the document from the HMRC that states..
'You must still pay tax on your rents in the United Kingdom'.

All income is declared to both HMRC and Agencia Tributaria annually.

There are 3 ways to pay tax in UK on rental income,

1 let your tenant deduct the tax due and pay a reduced rent to you and the tax deducted from that rent is paid by the tenant to HMRC (in my opinion very dodgy as you are relying on your tenant to settle your tax bill)

2 Your letting agent deducts the tax on your behalf and gives you the residue and pays the tax over to HMRC (not favoured by letting agents as it is extra work)

3 Claim your rent in full (minus letting agent fees etc.) and settle your own tax affairs with HMRC via self assessment.


HMRC will not routinely communicate with Agencia Tributaria/Hacienda/Spanish tax authority, annually, and so you need to declare your UK rental income when you submit a Spanish tax return