Looked everywhere (that I know of), but can't seem to find a definative answer.
After Brexit and if there is 'no deal', it is possible that Brits who own and rent out their Spanish property will no longer be able to deduct expenses incurred against rental income. Of course this will increase the profits for tax purposes. Also, at the moment Brits suffer Spanish income tax at a rate of 19%, and this could go up to 24%. At the moment, when completing a tax return, the Spanish income is declared, and the fact that income tax was paid at 19%, an additional 1% has to be suffered against this income in the UK (assuming a tax rate of 20%)
My questions are:
If 24% tax is paid against the rental income, would this additional 4% be taken into consideration when completing the tax return , which would then allow a 'decrease' in the tax laibility to the UK?
Also, is there a mechanism that the expenses incurred can be set against the rental income for calculating the profits for UK tax purposes?
I guess these are 'long-shots', but if the additional tax paid is not factored in and/or the expenses cannot be used for UK tax purposes, I suspect there are going to be a lot of Spanish properties going up for sale.
Thank you all in advance