This guide explains how UK and Spanish tax rules apply when moving to Spain from the UK. It covers tax residency, pensions, income reporting, capital gains, wealth considerations and how the UK–Spain tax treaty works, helping you understand your obligations before and after relocation.
One of the most common areas of confusion for British nationals is how UK and Spanish tax rules interact once you relocate, particularly after Brexit.
Understanding when you become tax resident in Spain, what income must be declared, and how the UK–Spain double taxation agreement works is essential to avoiding costly mistakes.
This guide provides a detailed overview of the key UK and Spanish tax considerations for people moving from the UK to Spain. It is designed to help you understand the rules, the timing and when professional advice may be appropriate.
We also have more detailed guides about both Spanish and UK tax obligations for expats in our tax library.
This article is for general information only and does not constitute tax, legal or financial advice. Tax rules are complex and depend on individual circumstances. You should seek professional advice before making decisions or submitting tax returns.
Your tax position changes significantly once you become resident in Spain. In general, you are considered Spanish tax resident if any of the following apply:
Spanish tax residency is assessed on a calendar-year basis (i.e 1st January to 31st December), not the UK tax year. This timing difference alone can create complexity in your first and final years of residence.
Once you are Spanish tax resident, Spain has the right to tax your worldwide income and assets, subject to the provisions of the UK–Spain double taxation agreement.
Leaving the UK does not automatically end your UK tax obligations. Your ongoing UK tax position depends on your residency status under the UK Statutory Residence Test and the type of income you continue to receive.
Common UK income sources that may remain taxable in the UK include:
Other income, such as private pensions and investment income, may shift to Spanish taxation once you become resident there.
In some cases, the UK may allow split year treatment in the year you leave, meaning you are treated as UK resident for part of the tax year and non-resident for the remainder. Split year treatment is not automatic and only applies if specific conditions are met.
Spain does not operate a formal split year system in the same way. This can result in overlapping tax exposure in the year of arrival, making planning and timing particularly important.
The UK–Spain double taxation agreement exists to prevent the same income being taxed twice. It determines which country has primary taxing rights over different types of income and provides mechanisms for relief where tax has already been paid.
Key points include:
Although the treaty provides relief, it does not remove reporting obligations. Income often still needs to be declared in both countries, with credits or exemptions applied.
Spanish tax residents must declare worldwide income, including:
Spanish tax rates are progressive and vary slightly by autonomous region. In addition to state tax, regional tax bands apply, meaning your location within Spain can affect your overall liability.
Spain has additional reporting and wealth-related obligations that often surprise new arrivals.
Some regions apply Spanish Wealth Tax, which is based on the value of worldwide assets above certain thresholds. Exemptions and allowances vary by region.
Separate from tax itself, residents may be required to file asset declaration forms for overseas assets, including bank accounts, investments and property. Penalties for non-compliance can be severe, even where no tax is due.
UK pensions are a major area of concern for British nationals moving to Spain.
Spain does not recognise many UK pension tax advantages in the same way, making pre-move planning particularly important.
Spanish tax residents are liable to Spanish Capital Gains Tax on worldwide disposals, including UK property and investments. Timing a sale before or after becoming resident can have significant tax consequences.
UK Capital Gains Tax may still apply in some situations, with relief available under the tax treaty.
Many issues arise because people assume UK rules continue to apply or underestimate Spain’s enforcement approach. Common mistakes include:
Before making any final decisions about moving to Spain, it is worth getting Spanish tax advice to ensure you fully understand your obligations and potential liabilities. Tax residency, reporting requirements and the interaction between UK and Spanish rules can have long-term consequences if handled incorrectly.
Booking a consultation with a Spanish tax specialist can help you get clear, tailored answers to your questions based on your personal circumstances, allowing you to move forward with greater confidence. They will be able to help clarify if you:
Early advice can help avoid penalties, reduce unnecessary tax and give you confidence that, when you move, you will be fully tax compliant in both jurisdictions.
