UK–Spain Double Taxation Treaty: Complete Guide for British Expats 2026

Yes. The Convention between the Kingdom of Spain and the United Kingdom for the Avoidance of Double Taxation (signed 21 October 1975, in force since 1976, updated by Protocol 2013) is a bilateral tax treaty between two sovereign states — it is not an EU instrument. Brexit did not affect it. The treaty continues to apply in full for all UK nationals and Spanish residents deriving income from the UK, and vice versa.

It depends on the type of pension. Private and occupational pensions: Art. 17 CDI UK–Spain — taxed ONLY in the country of residence (Spain). UK State Pension: treated as a government pension under Art. 18 — taxed ONLY in the UK. Government service pensions (civil servant, military, NHS, teacher): Art. 18 CDI — taxed ONLY in the UK, unless you are a national AND resident of Spain (in which case it is taxed in Spain). In practice, most British retirees in Spain pay tax on their private pension in Spain at the IRPF progressive scale, and on their State Pension in the UK (PAYE).

Art. 6 CDI UK–Spain: income from immovable property is taxed in the country where the property is situated. If the property is in the UK, it is taxed in the UK. However, if you are a Spanish tax resident, Spain also has the right to tax your worldwide income — but applies a tax credit for taxes paid in the UK under the "método de imputación" (Art. 23 CDI). In practice: you declare the UK rental income in your Spanish IRPF and deduct the UK tax already paid. No double payment — but you must declare in both countries.

Art. 10 CDI UK–Spain: dividends can be taxed in both countries. The UK can withhold at source (up to 15% under the treaty; currently 0% for basic rate UK taxpayers on most dividends under UK domestic law). Spain taxes the net dividends as savings income at 19-27% (progressive scale). You can credit the UK withholding tax against your Spanish tax. The key is to ensure you claim the treaty rate at source and correctly declare the gross dividend in Spain.

Art. 13 CDI UK–Spain: gains from immovable property are taxed in the country where the property is situated. So the gain from selling a UK property is taxed in the UK (UK CGT). However, Spain as country of residence taxes worldwide gains. You apply a tax credit in Spain for UK CGT paid. Both countries must be informed. Importantly, Spain uses a different calculation method (acquisition cost vs disposal proceeds in EUR, with exchange rate effects), so the taxable gain in Spain may differ from the UK CGT amount.

Art. 4 CDI UK–Spain establishes a "tie-breaker" hierarchy: (1) permanent home — resident where you have a permanent home available; (2) centre of vital interests — closest personal and economic ties; (3) habitual abode — where you stay most; (4) nationality. In practice, most British expats in Spain who spend >183 days in Spain will be Spanish tax residents. The tie-breaker only applies when both countries claim full tax residency. Having a UK property alone does not make you UK-resident if your centre of life has moved to Spain.