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-   -   Spanish resident - threshold for tax free income from UK (https://britishexpats.com/forum/spain-75/spanish-resident-threshold-tax-free-income-uk-942191/)

agree_to_disagree Jan 4th 2022 12:11 pm

Spanish resident - threshold for tax free income from UK
 
I'm wondering if there is anyone out these who has investments (shares or property) in the UK and if there is a threshold below which you do not get taxed on income from the UK.

Once you hit the threshold then you get taxed, for income above that threshold.

I am thinking of dividends, capital gain or income that are earned/paid from the UK to a Spanish resident.

This could be tax that either the UK or Spanish government might levy on earnings.

Listen Very Carefully Jan 4th 2022 3:15 pm

Re: Spanish resident - threshold for tax free income from UK
 
Every country has a tax agreement with other countries and they generally state what income is initially in which country They generally work like this-if you are resident in country A and get income from country B you have to declare all your world wide income to to country A ie the country in which you are resident The tax treaty defines which country has first dibs at taxing which income So being resident in France I get my police pension taxed initially in the UK but my UK state pension is taxed in France and paid tax free in the UK The french tax authorities then give me a tax credit equivalent to the tax I would have paid in France on my police pension
So there is no tax free allowance for UK income it all gets lumped in with your country of residence tax allowances In practice this means that you do not pay tax twice BUT a lot depends on the amount and the exchange rate so in theory it is possible to be taxed twice on the same income but rarely ever happens in practice for mere mortals
You need to look at the anglo spanish tax agreement for full details

agree_to_disagree Jan 4th 2022 3:31 pm

Re: Spanish resident - threshold for tax free income from UK
 
I already do a 720 declaration in which I declare my overseas interests.

However, what I have not being doing is using it as an income steam. Any gains are simply reinvested.

So what I need to know is if there is a threshold below which there is no/reduced tax due.

spainrico Jan 10th 2022 1:40 pm

Re: Spanish resident - threshold for tax free income from UK
 
nothing is taxed until it is taken out - so gains can be reinvested without a penalty - but once you cash in...

And it will be automatically withheld at standard tax rates - pending next declaration and final settlement.

agree_to_disagree Jan 10th 2022 9:58 pm

Re: Spanish resident - threshold for tax free income from UK
 
https://www.gov.uk/capital-gains-tax/allowances

Capital Gains Tax allowances

You only have to pay Capital Gains Tax on your overall gains above your tax-free allowance (called the Annual Exempt Amount).

The Capital Gains tax-free allowance is:
  • £12,300

HMRC have a calculator to figure out how much CGT you pay.

https://www.gov.uk/tax-sell-shares/work-out-your-gain


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