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Just wondered if anyone is able to give me advice please? I am in the throws of getting residencia. I am in receipt of a UK state pension and also receive rental income in the UK. Do I pay tax on the income in the UK or Spain?
Posted: Mon Apr 27, 2020 2:43pm
Super helpful member
If you spend > 6 months in Spain (in a year) you become tax-resident.
If you are granted Spanish Residency before end June this year, you will be deemed tax-resident for 2020. You will reconcile your taxes in June 2021.
If you are granted Spanish Residency between in July-December this year, you will be deemed tax-resident in 2021. You will reconcile your taxes in June 2022.
What is reconciliation ? ... you continue to pay your UK taxes (PAYE) as normal. Then, in June 2021 (or 2022 as appropriate) you pay the income tax for the previous period Jan-December in Spain. This is a lump sum payment (or may be split into two payments). Only then, do you claim back your UK tax. So there is a cash flow to be managed.
Posted: Mon Apr 27, 2020 4:17pm
Legendary helpful member
Just to qualify what Kelvin has said - it's the date on your padrón that the tax office look at first.
If you moved here before the end of June 2019, then you were fiscally resident for 2019, and have to submit a resident tax return for all your income in 2019.
If you moved after the end of June, then for 2019 you were fiscally non-resident. If you bought a property in 2019, you have to pay non-resident tax before the end of 2020.
All covered in my guides:
Jim's guides - your complete guide to Spain
Posted: Mon Apr 27, 2020 7:17pm
Thank you very much for your replies
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