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Income tax - UK and Spain

Income tax - UK and Spain

Postby Jonnno » Mon Jun 29, 2020 11:51 pm

Hi
Can anyone please point me in the direction of an income tax site to compare UK and Spanish tax. Thanks.
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Re: Income tax - UK and Spain

Postby A.N.Other » Tue Jun 30, 2020 5:36 am

There is no such thing nor can there be because the systems work in very different ways however in most cases you can reckon on paying more tax in Spain than in UK.

As a rough example in Spain an income of €20,000 can produce a tax bill of around €3,000 which will rise more quickly as income does.

The same income in UK (approx £18,000) will produce a bill of around £1,400 and rise more slowly.

I recently did a 'fag packet' calculation for someone for an income of €50,000 and the potential tax bill was €17,000, in UK it would have been £6,500.
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Re: Income tax - UK and Spain

Postby Steve4878 » Tue Jun 30, 2020 7:31 am

The UK has a basic tax free allowance of £12500, then its 20% for the rest of the income, unless you fall into the higher tax bracket.
The tax free allowance in Spain is (I believe) only 6500 Euro, 7500 over 65 years and 8500 over 70 years. After the allowance you pay a basic 19% tax, rising to 22% dependent on income.

If you have any UK income that is not taxable in Spain, such as a Crown or Civil Service Pension then as stated you won't pay Spanish tax on that, as its only taxable at source in the UK, but it will still be taken into consideration in Spain thus causing you to lose the tax free allowance here and go straight into the 19 or 22% tax.
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Re: Income tax - UK and Spain

Postby Steve4878 » Tue Jun 30, 2020 7:34 am

If you try to hide your UK income and get caught, you can be fined upto 50,000 Euro.
Once you have residentia you are duty bound to be liable as a tax resident and must declare all sources of income worldwide. UK state pension whether paid into your UK or Spanish bank is taxable in Spain. Income from a UK property is also taxable in Spain. However any tax paid on UK income which is then taxed in Spain can be claimed back from the UK tax office.
Like most countries, if you live in them you become liable to pay taxes in them.
Gaining income from overseas (UK as an example), is still income and is taxable in your country of residence.
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Re: Income tax - UK and Spain

Postby mondo » Tue Jun 30, 2020 8:06 am

I live in Spain. I feel it is only right and proper that I pay my taxes in Spain.. Spain uses it's police to protect me, the armed forces to protect the country. It maintains the roads I drive on, provides the hospitals I use, the fire brigade, the coast guard and basically everything.

So why would I not want to pay my way? If costs a bit more it is still worth it, and it is simply the right thing to do.

.
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Re: Income tax - UK and Spain

Postby partygoer » Tue Jun 30, 2020 8:20 am

Steve4878 wrote:If you try to hide your UK income and get caught, you can be fined upto 50,000 Euro.
Once you have residentia you are duty bound to be liable as a tax resident and must declare all sources of income worldwide. UK state pension whether paid into your UK or Spanish bank is taxable in Spain. Income from a UK property is also taxable in Spain. However any tax paid on UK income which is then taxed in Spain can be claimed back from the UK tax office.
Like most countries, if you live in them you become liable to pay taxes in them.
Gaining income from overseas (UK as an example), is still income and is taxable in your country of residence.




OH has a state pension = taxed in Spain

Also has rental income in UK = taxed in the UK

I have a private pension=taxed in Spain
Also a Crown Pension = taxed in UK

We have been fiscal residents here in Spain for 2 years.

I have spoken with HMRC on several occasions, who have confirmed our taxation

Tax on rental income in the UK is payable in the UK. Tax has never been paid in Spain for our UK property rental income.
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Re: Income tax - UK and Spain

Postby Nikkifinca » Tue Jun 30, 2020 9:52 am

Partygoer... can you tell me who advised you that you don’t have to pay Spanish tax on Uk rental income? My accountant disagrees and I pay tax on it in the Uk, that amount is offset against the amount I pay here.
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Re: Income tax - UK and Spain

Postby Nikkifinca » Tue Jun 30, 2020 9:59 am

Steve4878. To clarify you can only claim back tax paid in Spain on Uk income if it is double taxation. As taxes are higher in Spain Spanish tax can be due on Uk income but the amount already paid in the Uk is taken into account. This can leave you with a Spanish tax bill which is not reclaimable from hmrc. Add to this the mismatched taxation years (jan-Dec in Spain and Apr-Apr in Uk) and it tends to get complicated!
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Re: Income tax - UK and Spain

Postby Espanabums » Tue Jun 30, 2020 11:11 am

Rental income is taxed in the country where the property exists. If this is UK then it also needs to be declared in Spain as income, the tax paid to HMRC is taken into account.
If you have a long term contract for your rental income then the rental income is treated very favorably in Spain and under normal circumstances, there is no further tax to pay.
Let us be clear though, all your world wide income needs to be declared as income in Spain for tax calculation, including interest on UK tax free income like ISA's or premium bonds. The only difference is with Government/Crown pensions that are only included as exempt income, but still used to determine the final tax rate in the calculation of your tax liability in Spain
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Re: Income tax - UK and Spain

Postby Pete31 » Tue Jun 30, 2020 12:45 pm

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