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Spanish rate of tax on uk savings and rental income
Posted:
Fri May 18, 2018 3:38 pmby edwina1959
Hello, we are new to forum. We are thinking of buying a property in or around Quesada and are hoping to get an approximate amount of what we would pay in Spanish taxes on our UK savings income and rental income from UK property of £22000 per year, Any advice would be appreciated
Re: Spanish rate of tax on uk savings and rental income
Posted:
Fri May 18, 2018 3:59 pmby marcliff
You will get a tax allowance in Spain dependent on your circumstances.
Basic allowances are €5500 plus €3400 married allowance (it doesn't work exactly like that but those are the rates.)
There are other allowances depending on children, elderly parents etc plus a low income allowance (variable depending on income).
If your rental income is from a UK property then it will be taxed in UK. The amount of tax will be taken into account from your tax bill in Spain. Expenses such as mortgage interest, property maintenance costs etc can be deducted.
Tax on rental income is 19% if the Spanish tax is higher than you've already paid in UK.
If you complete a P85 and have your income on interest paid free of tax in UK then you will pay 19% on interest above your allowance.
Re: Spanish rate of tax on uk savings and rental income
Posted:
Sat May 19, 2018 7:12 amby Dsj
... and what about UK ISAs and SIPPs ? Does the Spanish Tax regime ignore the tax wrapper i.e. for assets held within an ISA or SIPP interest, dividends and capital gains will be subject to Spanish tax.
Re: Spanish rate of tax on uk savings and rental income
Posted:
Sat May 19, 2018 2:21 pmby edwina1959
Many thanks for your replies. I have read that spain does ignore Isas etc. Most of my savings are in isas so I think I would have to pay tax on all my savings. I read on another forum that this had put some people off taking residency as they woul pay tax on savings and were worried about changes to wealth tax after brexit