If you are taxed in the UK
The UK taxes worldwide income and gains and gives credit for the Spanish tax. Since Brexit the Spanish side is harder, not the British side.
Credit — and no EU deductions in Spain
The UK–Spain treaty relieves double taxation by credit: Spanish property income and gains are reported to HMRC, and the Spanish tax paid is set against the UK liability. The Brexit change sits in Spain, not in Britain: a UK resident letting a Spanish property is taxed at 24 % on the gross rent with no deductible costs, where an EU resident pays 19 % on the profit. Capital gains on a sale are 19 % for all non-residents.
What you actually declare
While you own it
- Spanish imputed income tax at 24 % of the notional income, and IBI, are paid in Spain.
- No UK tax on simply owning it.
- Since 6 April 2025 UK inheritance tax follows residence: once you have been UK resident for 10 of the last 20 tax years, the Spanish house is in your UK estate, with credit for Spanish inheritance tax.
- Spanish wealth tax: Balearic rules, open to UK residents too, exempt the first €3 million of net Spanish assets per owner; the state solidarity tax can apply above that.
- The 90/180-day Schengen limit is an immigration matter, not a tax one — but it shapes how the house gets used.
If you rent it out
- Spain: 24 % of gross rent, no deductions; from the 2026 tax year one return a year, filed 1–20 April.
- UK: report the profit, computed under UK rules, and claim foreign tax credit relief.
- Because the Spanish base is gross and the UK base is net, the credit rarely covers the whole UK bill. Model it before you count on rental income.
When you sell
- Spain: 19 % on the gain, with the 3 % retention on account.
- UK: capital gains tax at 18 % or 24 %, computed under UK rules and reported on your Self Assessment return, with credit for the Spanish tax.
- The two computations differ on allowable costs and on exchange rates — the currency movement alone can create a UK gain.
Five questions for your own adviser
How does the 24 % gross rental charge compare with my expected profit?
What is my UK gain once sterling movement is included?
Will Spanish wealth tax apply to my share of the property?
Does ownership through a company create a UK benefit-in-kind charge?
How do the Spanish and UK tax years line up for credit relief?
