Uk property tax

Yes, I think we're all agreed that rental income arising from a property in the UK, is taxed in the UK. We also seem to agree that this income would need to be declared in Spain, but that this would then come under the terms of the double taxation treaty. But you also said "If there is a case of double taxation it needs to be claimed back in the UK". That's the part where we differ. As I said, BF are not infallible, but the quote clearly states that "The UK tax paid on this income can be offset against the Spanish tax on the same income." That has always been my understanding of how the double taxation treaty works in this instance. The UK govt. document also makes it pretty clear (to me) under the heading "Elimination of Double Taxation (Article 22 .1..a.i).

I am not doubting your personal experience (only perhaps the knowledge of your assesor!), but by your own admission, you've never actually tried claiming the UK tax back from HMRC. I think if you did, you'd find that they err on the side of BF (or refer you to the aforementioned article). Equally, you said you never got any tax back from the Spanish tax office. That's probably because you went about it the wrong way: if you file a self assesment tax return, paying tax on income that you don't need to, how can you then put in a claim for a refund? Doesn't make sense to me.

Another example (just Google it!): 

Income from property (i.e. rental income) in the double tax treaty is treated the same as other forms of income, so if you are resident in one country but rent out a property in another then you will probably have to pay tax in both countries but can use the treaty to get relief in your country of residence. (https://www.quabbala.co.uk/the-double-tax-treaty-uk-spain/)

Incidentally, just thinking about this further, I think we all know that if a non-resident owns property in Spain which is rented out, they have to file a 210 and pay tax in Spain on that income. This income probably is supposed to be declared in the country of tax residency as well (let's assume the UK) - but under the terms of the double taxation treaty, it won't be taxed again in the UK. I have certainly never heard of any instance of anyone claiming the tax back from Spain, because they are paying tax on the rental income in the UK as well. So why should it be any different the other way round? 

This message was last edited by Roberto on 11/10/2017.

This message was last edited by Roberto on 11/10/2017.

I'm assuming we are all rental property owners in this discussion?  Aside from the humour I have been 'inserting' in the post, I have been making some assumptions of our own experience and knowledge along the way, can I clarify we are all on the same page?

If you rent out property, in any country, you have the rental income and the running expenses (maintenance, repair, cleaning, office expenses etc etc.).  So the NET worth of your income from the property is calculated using local goods and services, which will be calcuklated in the country of the property or business.   This is the area that an accountant will assist with (or gestor?) and the taxation liability will arise from your earnings on the 'bottom line' as it were.

So after dealing with the liability part, in the country of origin, this then presumably becomes money transferred into the country your resident in, and this becomes the taxation liability in ther other country, is this the discussion we are having because there is some complicated advice coming through perhaps?

I truly believe advice from someone who knows the taxation laws, allowances, liabilities and computations is required, at least once, to provide the correct methods and regulations for people going forward.

Being as there are (probably) very few multi property moguls on the EOS site, this shouldnt be an expensive exercise and will give good peace of mind for the client?

Not sure I entirely follow your post, but I think you're saying that the OP should really seek (& pay for) professional advice rather than rely on the "assumptions" of forum members who may not necessarily know what they're talking about? If that's the case, then yes, I guess we're all on the same page. Nobody here is saying they know all the answers, but if someone chooses to throw out a vague question on a public forum, then they can reasonably expect to get lots of vague replies, & a lot of discussion, of varying usefulness. The original question was "I will be renting out my UK property, this will be my family’s only income. Does anyone know if I will have to pay any Spanish tax." The answer really isn't complicated: no, nobody knows, because there's not enough information provided here to give a definitive answer. But meanwhile, the banter is entertaining & interesting, isn't it?

We seem to have skipped by the poster saying they’re  looking to move to Spain in the future and looking to rent out a family property.  So they need to take advice in the UK before getting up to speed with gestors etc (imho).  

I’m not sure the best advice is to go much further than that right now!!!!   Also get tenancy agreements checked out etc.  

The local tax office may advise (if they make an appointment because you can’t drop in there anymore).  Then maybe the OP can come back and advise us 😳