Spain and the UK have new Double Taxation agreement

Double Tax Agreement 2014, Spain, UK

A new Double Taxation Agreement (DTA) between Great Britain and Spain has started from the 12th June 2014. The agreement covers the avoidance of double taxation on residents of both countries where tax is paid in the other country.

The agreement covers the following taxes:

Income tax for individuals

Capital Gains Tax for individuals and companies

Corporation Tax for companies

The DTA covers these taxes from ALL sources in the reciprocal country, in this case Spain and the UK. Earnings, pensions, interest on bank accounts, gains on sales of property, shares and other assets are all covered.  The agreement does not cover the relief of perceived double taxation from Inheritance Tax (Ley del impuesto sobre Sucesiónes y Donanciones).

The agreement also covers the exchange of information between the two countries for residents of each country. The exchange of information section of the agreement includes the following:

“the administration and enforcement of the domestic laws concerning taxes of every kind”

There is a section

“Without regard to whether that income is treated as income of that Partnership, trust, group of persons or similar entity under the tax laws of the first mentioned state”.

In effect, one country can have different treatment of income from the other. This may be relevant for trusts.

Points to Note about the new DTA

1. The provision of information on gifts and inheritances is covered by the Exchange of Information section, even though it is not included in the double taxation sections of the agreement (see above).

2. The taxable entity on death is different. In the UK the taxable entity is the estate of the individual who has died. In Spain, it is the recipient of the bequest that is taxable. The request for relief of double taxation will continue to be dealt with on a case by case basis.

Spain has also signed tax agreements with Isle of Man, Jersey and Guernsey. For clarification, these agreements are NOT double taxation agreements with these jurisdictions. The agreements signed are exchange of information agreements (TIEA) which allows for the provision of information between Spain and the other location.

This article is provided for information purposes only and does not constitute advice. It is essential that advice is taken from a suitable qualified individual. For assistance in finding an English Speaking Tax Adviser in Spain please email Barry Davys ( with your name, location and which kind of tax you are concerned about.

Full text of Double Taxation Agreement from HMRC

You may also be interested in

Spanish Residency                La Renta                Retiring in Spain                Spanish Tax Facts 2014

Author:  Barry Davys


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