Does anyone know whether an individual who is an Australian national with Spanish residency status who owns a UK proeprty which is rented out receive the benefit of the UK personal allowance to set against rental income? Guidance that I have read does not appear to be able to give a definitive answer on this but given that the entitlement to personal allwoances for Commonwealth citizens was withdrawn from 6 April 2010 and I can't see anything in the UK-Australia or UK-Spain double tax treaty that may grant the personal allowance, I am not optimistic. Any comments are gratefully received.
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Sections 35 and 56 ITA 2007
Unfortunately the answer is no. Sections 35 ITA 2007 states that an individual may make a claim for personal allowances if, inter alia, they meet the requirements of section 56. Section 56 state that the claimant has to be either resident in the UK or meet the conditions in s56(3) and I cannot see that your client falls into any of the categories within this sub-section.
HMRC Guidance
The HMRC Guidance makes it clear that an Australian national does not qualify for the UK personal allowance unless he is also resident in Australia.
However, if he moved across the Spanish border to either France or Portugal, he would qualify as a resident of those countries.