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Brace for Brexit 19: Higher taxes for Brits owning Spanish homes

UK resident landlords of Spanish properties will pay more tax on rental income and on gains from any former Spanish home sold after the end of the transition period on 31 December 2020.

18th Dec 2020
Tax Writer Taxwriter Ltd
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Alistair Spence Clarke founding partner of Spence Clarke & Co spoke Rebecca Cave about the surprising affects that Brexit will have on the taxation of properties in Spain which are owned by UK residents.

Why does the UK leaving the EU make a difference to the tax treatment of Spanish properties held by UK residents?

Alistair: It’s all tied up with the Spanish non-resident tax law. There are different tax rates and treatments based on the residence status of taxpayers – whether they are EU/EEA residents or not. Once the transition period comes to an end on 31 December 2020 all UK residents immediately lose their status as EU residents for Spanish tax purposes.

How much extra tax will UK landlords have to pay? 

Alistair: The tax rate on rental income jumps from 19% to 24%, for non-EU residents, but the big problem will be the loss of the right to all deductions from rental income. In other words, tax will be charged on gross rental income, not net income.

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Replies (14)

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Caroline
By accountantccole
18th Dec 2020 12:45

French rules updated this week saying you can't have new branches controlled from the UK .
But hey, blue passports.....

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By 0098087
18th Dec 2020 13:26

Love it..we got our country back..and the most likely people to own these properties are the older residents who hate foreigners, voted to leave and vote Tory..just love it..so so funny..How's your Daily Mail and Hitler poster?

Thanks (1)
Replying to 0098087:
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By Rgab1947
04th Jan 2021 12:55

Oh really.

Are you a Stalinist reading only the Red Flag?

Silly comment as would be the above comment and disrespectful to valid held views democratically expressed.

No I was and am not a Brexiteer. Just respect that others may hold another view and the democratic process.

Thanks (4)
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By jonharris999
18th Dec 2020 14:07

Thanks for this info. Will this also apply to Spanish citizens who are UK residents?

Thanks (3)
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By Paul Crowley
19th Dec 2020 15:50

Fair play to them
Stick it to the foreigner

Thanks (0)
blue sheep
By NH
20th Dec 2020 11:17

If you are no longer a club member and no longer pay the club fees you don't get the same benefits as members, simple as that

Thanks (3)
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By Shafeen
21st Dec 2020 20:27

Shouldn't that be 31 December 2020, not 2021.

Thanks (1)
Replying to Shafeen:
rebecca cave
By Rebecca Cave
22nd Dec 2020 12:06

I've corrected that year.

Thanks (0)
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By Dspate
04th Jan 2021 11:14

Is the position any different if you are an EU Citizen as well as a UK citizen (i.e. dual citizen) but resident in the UK? i.e. is it residency rather than citizenship that matters? I thought a principle of EU law was that all EU citizens must be treated equally?

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Replying to Dspate:
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By Rgab1947
04th Jan 2021 12:57

Interesting question. Would be keen to hear an experts opinion on that.

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By JOHNB10
04th Jan 2021 11:38

What happens those with Irish passports resident in Northern Ireland who are still EU residents?

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By Kentwillumsen
04th Jan 2021 13:56

The issue will sort itself out; supply and demand rules:
Spain still have in excess of 2-3mill empty properties they hope to sell, mainly to Britsh citizens.

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By pradous
10th Jan 2021 12:32

Hello. The "old" Spanish law allowed qualified expenses in excess of income to be carried over for up to 4 years. Will it still be possible for UK tax residents to deduct expenses that were incurred prior to the end of the transition period in their quarterly returns starting 1Q21?

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By madeofstars
08th Mar 2021 09:48

And how about citizens of other EU countries now resident in the UK? Surely it cannot be legal for their EU citizen equal treatment rights to be taken away? They still have Schengen area movement rights, and had to apply for permission to stay in the UK, so would they not have EU tax law treatment rights too?

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