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taxadvisor.uk
taxadvisor.uk, Chartered Certified Accountant
Category: Tax
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Experience:  FCCA - over 35 years experience as a qualified accountant (UK based Practitioner)
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We own property in the UK and want to move to Spain permanently

Resolved Question:

We own property in the UK and want to move to Spain permanently and become Spanish residents. Do we have to pay UK tax on the income the properties make or do we just pay Spanish tax?
Submitted: 2 years ago.
Category: Tax
Expert:  taxadvisor.uk replied 2 years ago.

and welcome to the site. Thank you question.

Property income arising in the UK is chargeable to UK income tax.

Under double tax arrangements, any tax suffered in the UK should be available tax credit relief when you file your tax returns in Spain.

As you would be living in Spain months or more per year, you would be classed as a non-resident landlord by the tax office.

There are special rules relating to how you pay tax on this rental income once you are a non-resident landlord. Approval by HMRC on completion of form NRL1i would enable you to get your rent in full and you pay tax on your rental income by completing a self assessment return.

More information on tax on your UK income when you live abroad is covered here
https://www.gov.uk/tax-uk-income-live-abroad/rent

Here is a link to the form NRL1i

https://www.gov.uk/government/publications/non-resident-landlord-application-to-receive-uk-rental-income-without-deduction-of-uk-tax-individuals-nrl1i

I hope this is helpful and answers your question.

If you have any other questions, please ask me before you rate my service – I’ll be happy to respond.

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Customer: replied 2 years ago.

Thankyou reply but can you provide further clarification?

I currently earn £980 a month in a self employed position online and £500 a month as wages from an employer. Myself and my husband currently earn approx £8500 a year from property. If we move to Spain, my husband's income will be only property income. Please can you advise us on what we have to declare in Spain and in the UK? Which way would be the best way of doing so as to benefit us? Can you also please provide us with an approx calculation on how much we would have after tax? Hope you can help. Many thanks.

Expert:  taxadvisor.uk replied 2 years ago.

Thank you reply.

Once you move to Spain, you would be declaring rental income from the UK to the UK tax authorities.

I presume your employment income in the UK would cease unless you remain on their payroll but perform all your duties from Spain. If that were the case, you could request HMRC to give you a NT tax code meaning no deduction of tax under PAYE.
You would declare your self employment and employment income to Spainish tax authories puposes, if these continue once you have left the country.

If you are taxable on any income in the UK, being UK nationals you would be entitled to UK personal allowance against that income before you are taxed.

The personal allowance year 2014-15 is £10,000. Anything over than up to £31,865 would be taxed at 20%.

I can't advice you on taxation in Spain, I'm afraid.

I hope this is helpful and answers your question.

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