Chiclanagir

Does anyone have knowledge as to whether if living in Spain permanently you are still entitled to your UK personal allowances. I have a house still in the UK which is rented out and is our only means of income and have just received our self assessment taxation form back stating that we will have to pay tax although we should be under the threshold.

jdr

If you are under the threshold, you wont be paying much....
The Spanish taxman will be interested......
Read some of the back posts on tax, I think the Spanish tax man takes his cut
from your worldwide assets.

JAJ

If you are a British citizen - yes you are entitled to the personal allowance. As are a number of other groups, eg EEA citizens.

As noted, the Spanish taxman will probably be interested in the income.

Jeremy

kathml

If you are living permanently in Spain you are a spanish resident Legally you should be paying Spanish Taxes on all income brought into Spain which means you are not a British resident so therefore you cannot claim british allowances

If you are retired income would include any pension

Nige

Have a look at this web page on the very informative Inland Revenue site?

http://www.inlandrevenue.gov.uk/pdfs/ir138.htm

it is all a question of whether you are 'resident' in Spain/UK for tax purposes etc. If you have taken up 'residency' in Spain , in other words you are no longer a 'Non-Resident' and you live in Spain for the majority of the year (refer to the rules !) then you would need to consider submitting an annual tax return to the Spanish authorities and not the Inland Revenue. There is a double taxation agreement between both countries so you won't pay tax twice. Although the tax regimes in Spain will be different to the UK. For example, all world wide assets need to be declared and a 'wealth tax' is paid on these assets according to the annual rate. Also income received from letting your house in UK would be declared. But you would be entitled to tax free threshold depending upon your circumstances. This tax free threshold may be enough to make your income from letting 'tax free' but it depends on the figures.

I am sure that for every 'action' there is a 'reaction' so it's best to establish the full facts before deciding on any particular route.

JAJ

Not true. From the Inland Revenue website:

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Am I entitled to claim personal allowances?

You can claim personal allowances, which will reduce the amount of tax charged on your income, for any tax year in which you are resident in the UK, or you either become, or cease to be, resident.

In addition, even if you are not resident in the UK , you may claim personal allowances if

* you are a Commonwealth citizen (this includes a British citizen) or a citizen of the Republic of Ireland; or
* you are a present or former employee of the British Crown (such as a civil servant or a member of the armed forces); or
* you are a widow or widower of an employee of the British Crown; or
* you are a UK missionary society employee; or
* you are a civil servant in a territory under the protection of the British Crown; or
* you are a resident of the Isle of Man or the Channel Islands; or
* you are a former resident of the UK and you live abroad for the sake of your own health or the health of a member of your family who lives with you; or
* you are a national and/or a resident of a country with which the UK has a double taxation agreement allowing a claim for personal allowances. You can get details of the agreements which allow this from FICO (International) at Bootle.

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The point about claiming personal allowances if non-UK resident is important because UK tax may still be an issue on UK-source income.

Jeremy

kathml

Have been rereading notes on Inland Revenue web site & while agree you could be correct you are only quoting one paragraph out of hundreds
As far as I can gather you would be required to fill out UK tax return for letting income & in addition fill out Spanish tax return if you live there for more than 180 days in the year then hopefully the double tax agreement would sort out where tax had to be paid
However you could run into problems in the first year because of differing dates of tax year in each country

Initially read the IR website start with booklets IR20 & IR140 & then proceed to all the rest It may also be worth seeking professional help

JAJ

It's not a question of whether I could be correct or not. I *am* correct.

You stated that non-UK residents were not entitled to claim the UK personal allowance. I quoted the specific circumstances where they are. There is no 'maybe' about this - or if you have contrary information, a reference would be welcome.

Spanish tax is a different question.

Jeremy