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V0270-23 15 February 2023 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · residencia fiscal

Spanish resident must pay tax on UK property sale profit

A taxpayer moving to Spain after selling their UK home asks whether the gain must be included in their Spanish personal income tax. The DGT confirms that as a Spanish tax resident, the gain is subject to Spanish tax on worldwide income, with no deduction for UK local tax credits.

The question raised

Whether, in the Personal Income Tax return which they would be required to file as a consequence of acquiring tax residency in Spain, they must include the gain obtained upon the transfer of the real estate.

The DGT's ruling

If the taxpayer is a tax resident in Spain, they shall be taxed on their worldwide income in accordance with the Personal Income Tax Act (LIRPF). The gain from the disposal of real estate in the United Kingdom may be taxed in both Spain and the United Kingdom. Spain must eliminate double taxation through the credit method, but it cannot deduct taxes that were not effectively paid in the United Kingdom due to local tax reliefs.

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