Re: Income from property in UK taxed in UK and Spain
Posted: Wed Nov 09, 2022 11:45 pm
To be truly factual here, UK rental income is taxable both in UK and Spain. Usually you get better relief in Spain as it is deemed a public service so the excess of income over expenditure is not all taxed. However, if you have no other income that is taxable in UK, your UK tax allowance will be offset against your rental income and you will have to pay extra tax in Spain. UK gets first dibs on the income and this will be netted off against the calculated Spanish tax on your UK rental income. If your UK tax allowance is all used up by your government pension in UK, then you will pay a full 20% on your excess of income over expenditure on your UK rental income, and will almost certainly pay no more tax on it in Spain. Two caveats however, you must be able to prove that your UK property is let on a long term basis, and it is let to a family and not to a business. This can prove difficult as most UK rental agreements are on a rolling six months agreement. You need to get a signed statement from your tenants,and your letting agent,if you have one, to this affect.
If you have a UK government pension,then it is only taxable in UK and cannot be taxed in Spain. However,you need to declare it in Spain as Exempt income. This has the effect of increasing your total income in Spain and therefore will push your Spanish tax burden into a higher tax bracket. (If you have no Spanish income then it will make zero difference)
I have a UK government pension and a UK old age pension, and also have had some UK rental income so am quite well versed in both UK and Spanish tax systems if you have any further queries.
If you have a UK government pension,then it is only taxable in UK and cannot be taxed in Spain. However,you need to declare it in Spain as Exempt income. This has the effect of increasing your total income in Spain and therefore will push your Spanish tax burden into a higher tax bracket. (If you have no Spanish income then it will make zero difference)
I have a UK government pension and a UK old age pension, and also have had some UK rental income so am quite well versed in both UK and Spanish tax systems if you have any further queries.