My client is resident and ordinarily resident in Spain but receives some UK interest. I have read the relevant section of the DTA and it seems to suggest that the interest is taxable in both countries on the following basis:
UK - tax restricted to 12% of the gross interest
Spain - fully taxable in Spain with relief for the UK tax paid
Is this the correct interpretation as a colleague has told me I am wrong. If it is correct, how does it work in practice (ie can you ask the banks to withhold just 12% or is a repayment claim necessary)?
The dividend section seems a little more complicated and a brief explanation would be greatly appreciated.