PhilRoy

I am sure someone in Spain has been in this situation!
I am English , married to a Spanish woman. I have a TIE.
I am retired and have an income from two rented properties in the UK and a Teachers Pension.
Do I carry on paying tax in the UK AND declare my U K assets in Spain?

Joppa

So you have a TIE, does it mean you are tax resident in Spain? Then you have to declare your world-wide assets outside Spain on modelo 720 and pay tax on your worldwide income. Most teacher's pension is taxable only in UK, which you still have to declare in Spain and may affect your taxable allowances.

VEDShappy

Short answer, yes.
Rental income from the UK will be be of interest to HMRC.
All income is to be declared to Spanish tax authorities.

bobd22

If your teachers pension is classed as a crown pension you pay tax in UK on it and I believe its same with property which is rented out in the UK the UK get the tax on it. However you still declare the amount to Spain as although they don't double tax you on it they need to know your full income and what tax you've paid to UK so they can ascertain your correct tax on any income that is taxed in Spain.
Sorry also as Joppa says you must make the 720 declaration for savings etc and property owned outside of Spain.

PhilRoy

Thank you Joppa. We have hired a Spanish Tax expert and we have completed the 720 and are declaring all our assets which we hold in the UK. Do you know if I have to continue declaring my income from the two properties that I have in the UK to the UK tax authorities (as well declaring the income to the Spanish Tax authorities)?

PhilRoy

Thank you VEDShappy. So I complete my tax submission as I usually do in the UK and they tax me as they normally do and then I submit those calculations to the Spanish tax authorities?

PhilRoy

Thanks bobd22. Re the Teachers Pension I thought as much. I was not sure about the income from the 2 rental properties I have in the UK. So you are saying I have to declare that to HMRC as I usually do, then having already told the Spanish authorities I own and rent out these properties, I let them know what the HMRC calculations are re my tax?

Joppa

You can only be tax resident in one country, so in your case, Spain. You no longer have to declare your UK rental income to HMRC but your teacher's pension will continue to be taxed at source by PAYE (this will be done automatically).

bobd22

Yes that's my understanding. The properties are taxed by UK you should register that fact with HMRC we rent a property and filled a form in with letting agent and got a letter from HMRC. The reason Spain need to know about tax in UK is you didn't used to have to tell them re crown pensions etc pre 2015. But that meant you ended up with 2 seperate tax allowances one UK and one Spain they closed that loophole basically. So by knowing they know you've had an allowance and ensure you are taxed at correct rate given total income. That's my understanding which gestor I use in Spain said was correct however I am far from an expert and new to spanish tax as only submitted 1 year and new to house letting in UK.

VEDShappy

Yes. I have self assessment with HMRC for this, the alternative is for the letting agents, if you use them, to deduct the tax at source.
Self assessment works for us.

bobd22

I'm not sure that's correct re property and I have a letter from HMRC saying I will have to pay them tax for our property we rent out. I'm no expert as only just started letting out our UK house. Maybe someone can confirm situation.

Joppa

Yes, you are correct. UK rental income is taxable in both UK and Spain (if you are resident), but you can deduct the UK tax from your Spanish tax liability.

VEDShappy

You might only be a tax resident in one country, but, depending where this is and how and where the income is generated means that you may be taxed in the source country. Such is the case with rental income from the UK

bobd22

Yes that's my understanding that the UK will claim that as the properties in the UK they will tax it.

PhilRoy

Thanks bobd22. I have submitted annual returns to HMRC on those 2 properties for about 12 years.I obtained my TIE a few months ago. I will phone HMRC tomorrow to let them know I am now Resident in Spain and will ask them what the correct protocol is re continuing to submit my Return to them.