Declaring UK rental income in Spain - a change?

[Chica56]

I know this has been debated here before but a friend of mine had a Hacienda inspèction after the 720 was introduced and was told that she should have declared her rental income from UK property here in Spain...........like many of you my gestor has always said no do not do that just declare in the UK, which is what she had done, so have the rules changed?

If I understand the rules correctly then we should declare this income as we are required to declare worldwide income but.............anyone have any ideas? Has it changed along with pension declaration?

[ashtondav]

My understanding is that if you are tax resident in Spain you pay tax in Spain on all worldwide income and gains. I do not see why there would be an exemption for UK BTL. Neither do I understand why I gestor would suggest Spanish tax evasion.

Of course I may be completely incorrect.

[El Cid]

UK rental income has always been taxable in Spain.

It's just yet another example of so called professionals not having a clue about UK/Spain tax issues.

Sid

[Beachcomber]

Including imputed tax on proprieties that are not rented out.

[El Cid]

Good point Beach. About the only immediate tax "danger" of filing a Form 720 that includes details of a UK property is that Hacienda can immediately check it you have paid the imputed tax on it.

The vast majority of UK property owners who are tax residents in Spain have no idea that UK properties are subject to exactly the same tax as second properties in Spain. I am pretty certain that most Spanish gestors don't know either.

Sid

[ashtondav]

Hadn't thought of the imputed tax. How do they agree a "catastral value" for a uk house?

[katy]

They do not know right now. Waiting for a test case. No one has declared one yet

[Beachcomber]

To calculate the taxable base on a property with no valor catastral you take half of the escritura (deed) value and multiply it by 1,1%. This applies to both Spanish and overseas properties.

By the way, someone has declared the imputed tax on an overseas property... I have, but what may confuse them is that I bought the property in the early 1980s for far less than the €50.000 limit so I did not need to declare it on the 720.

[anyroads]

Blimey...

If the popular press is to believed. Most people do not declare it in the UK, never mind Spain.

anyroads

[Wicksey]

...........like many of you my gestor has always said no do not do that just declare in the UK, which is what she had done, so have the rules changed?

Get yourself a new gestor!

You are right that everything has to be declared here although net rental income does attract a discount (currently for 2014 only 40% has to be declared .... rising to I think 50% next year). Government pensions to be shown next year too.

[Beachcomber]

You actually declare the full amount of rental income and the PADRE program decides on the discount according to which box you tick.