British Expats & Tax Filing When Moving to Spain from the UK
Moving from the UK to Spain comes with significant tax implications. Failing to meet your tax obligations in both countries can lead to penalties and unexpected liabilities. If you are leaving the UK, you need to file your final UK tax return correctly, and upon arrival in Spain, you must register and comply with Spanish tax laws.
This guide will explain how to file your UK tax return as a leaver, what to do about any ongoing UK tax obligations, and how to register for and file taxes in Spain as a new resident.
We have created a dedicated website for Brits moving to Spain and want to be tax efficient.
Please note that you may need to pay tax in the UK and pay tax in Spain.
Tax Filing in the UK When Leaving for Spain
British Expats & Tax Filing When Moving to Spain from the UK
Do You Need to File a UK Tax Return Before Leaving?
If you are leaving the UK, you may need to file a Self-Assessment tax return in your final year. This is required if:
– You were self-employed.
– You earned rental income from a UK property.
– You had foreign income while living in the UK.
– You made capital gains on UK assets.
– You were a high earner (above £100,000).
Even if you did not previously file tax returns, you must inform HMRC that you are leaving by submitting a P85 form. This helps determine if you are due a tax refund or need to settle any remaining taxes.
Key Steps to follow
Determine your residency status: Your tax residency is based on the Statutory Residence Test (SRT). If you are leaving permanently, you will usually become a non-resident in the following tax year.
Complete and submit your P85: This form notifies HMRC that you are leaving the UK and helps assess whether you overpaid tax.
File your Self-Assessment tax return: If applicable, submit your final return online or via a tax accountant.
Manage ongoing UK income: If you still receive UK rental or business income, you may remain taxable under the Non-Resident Landlord Scheme (NRLS) or need to register for non-resident tax filing.
If you plan to return to the UK or want to claim a UK State Pension in the future, consider voluntary Class 2 National Insurance contributions to maintain your record.
Reporting in Spain After Arrival
When Do You Become a Spanish Tax Resident?
Spain considers you a tax resident if you meet any of the following criteria:
– You spend more than 183 days in Spain during a calendar year.
– Your primary economic interests (e.g., business, employment, assets) are in Spain.
– Your spouse and/or dependent children reside in Spain.
Once you become a Spanish tax resident, you must declare and pay tax on your worldwide income.
– Obtain a NIE (Número de Identificación de Extranjero) – This is required for tax registration.
– Register with the Spanish tax authorities (Agencia Tributaria) – You will need to complete Modelo 030 to register.
– Choose a tax regime:
– – Ordinary tax system (standard progressive tax rates apply).
– – Beckham Law (a beneficial tax scheme for high-earning expats, applicable in specific cases).
The Spanish tax year runs from 1st January to 31st December.
Annual income tax returns (IRPF) are filed between April and June of the following year.
Use Modelo 100 for personal income tax declaration.
If you have foreign assets worth over €50,000, you must file Modelo 720 to declare them
Taxes on UK Income While Living in Spain
The UK-Spain Double Taxation Agreement (DTA) ensures you do not pay tax twice on the same income. Key points:
– If tax is deducted in the UK, you can offset it against your Spanish tax bill.
– Income taxable only in one country (e.g., Spanish salary) is not subject to UK tax.
Key Deadlines and Compliance Tips
| Action | UK Deadline | Spain Deadline |
| File UK tax return (if required) | 31 January (online) | N/A |
| Submit P85 to HMRC | As soon as you leave | N/A |
| Register for Spanish tax | N/A | Within 30 days of residency |
| File Spanish annual tax return | N/A | April – June |
| Submit Modelo 720 (if applicable) | N/A | 31 March |
Reporting your taxes correctly when moving from the UK to Spain is crucial to avoid penalties and overpaying tax. Ensure you:
If required, please exit the UK tax system with a P85 form and Self-Assessment return.
Register for Spanish taxes promptly and file the correct returns.
Understand double taxation rules to avoid unnecessary tax liabilities.
For expert guidance, consider working with a specialist tax advisor to ensure compliance in both jurisdictions.
