Do I still pay UK tax?

When you move to Spain you usually stop being UK resident for tax and become Spanish resident instead. The two countries count years differently, so getting the paperwork right on both sides stops you paying too much, or too little.

Tell HMRC you’re going

Are you still UK resident?

The Statutory Residence Test decides your UK status for each UK tax year (6 April to 5 April):

• You are usually non-resident if you spend fewer than 16 days in the UK (46 if you weren’t UK resident in the 3 previous tax years)
• You are also usually non-resident if you work full time abroad and spend fewer than 91 days in the UK, with no more than 30 of them working
• You are UK resident if you spend 183 days or more in the UK
• When you leave part way through a year, “split-year treatment” usually divides it, so you only pay UK tax on foreign income for the time you lived here. You won’t get it if you come back within a full tax year

When Spain starts taxing you

Spain’s tax year is the calendar year, and there is no split year: you are resident or non-resident for the whole of it. You are a Spanish tax resident if any of these applies:

• You spend more than 183 days in Spain in the calendar year. Short trips away still count, unless you prove tax residence elsewhere with a certificate
• The main base of your business or economic interests is in Spain
• Your spouse (not legally separated) and dependent children under 18 live in Spain. You can prove otherwise

A resident pays Spanish income tax (IRPF) on income from anywhere in the world, and files the return in April, May and June for the year before. If you arrive in, say, September, you may be UK resident for that UK tax year’s first part and not Spanish resident for that calendar year at all. If both countries claim you, the 2013 UK–Spain tax treaty has tie-breaker rules. See NIE, TIE, padrón and how IRPF works.

UK income after you leave

• The UK can still tax UK rent and UK property gains. Spain taxes them too and gives a credit for the UK tax (see your UK home)
• UK bank interest received by a Spanish resident is taxable only in Spain under the treaty
• UK dividends are taxed in Spain; any UK tax is capped at 10% or 15% and credited
• The UK State Pension and private and workplace pensions are taxed only in Spain; UK government service pensions stay taxed only in the UK unless you are also a Spanish national (see UK pensions)

ISAs and UK savings

You can keep your ISA, and it stays tax-free in the UK, but you can’t pay in once you are non-resident. Tell your provider. Spain doesn’t recognise the ISA wrapper: as a resident you declare its interest, dividends and gains on your Spanish return. See Moving money and UK savings.

Modelo 720: declaring overseas assets

Spanish residents must report three categories of assets held abroad: bank accounts; shares, funds and insurance; and property. You only report a category if its total value is over €50,000. After the first return, you file again only if a category rises by more than €20,000. The deadline is 1 January to 31 March. There are penalties for late or wrong returns, so use a Spanish tax adviser (asesor fiscal) or a gestor.

The Beckham law

People who become Spanish tax residents because they move to Spain for work can choose a special regime (often called the Beckham law) for the year they arrive and the next 5 years. Spanish work income is taxed at 24% up to €600,000 (about £508,000) and 47% above. You must not have been Spanish resident in the previous 5 tax years, and you opt in on form 149 with the tax agency. You are then taxed under the non-resident income tax rules while still filing in Spain. Check the deadline to opt in, and get advice before you choose: it can’t be mixed with the normal rules in the same year.

What else to tell

• The Student Loans Company, if you’re leaving for more than 3 months, or you may build up arrears
• The Child Benefit Office. Child Benefit may only continue if you are covered by the Withdrawal Agreement or still pay UK National Insurance
• Your bank, pension providers and platforms, with your new address