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HMRC internal manual

Double Taxation Relief Manual

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HM Revenue & Customs
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Double Taxation Relief Manual: Guidance by country: Spain: Income from property

Individuals who own property in Spain and who are not resident in Spain pay Spanish income tax in respect of the deemed rental value of their Spanish property. This Spanish tax is not creditable against United Kingdom income tax liability because there is no UK tax payable in respect of the deemed Spanish income.

Where Spanish income tax is payable in respect of actual income from a Spanish property and actual rents are taxed in the United Kingdom the Spanish tax payable may be credited against the UK payable on the Spanish rental income.

The charge to Spanish capital tax in respect of the value of the property may be deducted in computing the amount of the Spanish rental income with an appropriate adjustment for private use of the Spanish property.

The Exchange of Notes concerning the taxation of time share rights referred to at DT17550 in most cases removes the liability of United Kingdom residents to Spanish tax in respect of their ownership of Spanish time shares, except where the owner is a developer or trader in time shares. Any enquiry concerning the application of the Exchange of Notes should be referred to Business International, Tax Treaty Team.