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Posted Thu, 04 Jan 2024 13:24:35 GMT by
So we have have a villa in Spain where we have paid 24% tax on gross income from holiday letting. On my tax return if I add the income in the EEA property section and then foreign tax credit, this still calculates that i pay income tax on the balance. eg, so say the income was £1000 and tax paid in Spain was 240. on my calculation in my draft UK tax return, the balance ie 760 is then taxed at 20%, so double taxation, That cannot be right. Help please. Where in my tax return do i deal with this, so i don't pay any UK income tax as there is a double taxation agreement? so that while there was an income of £1000, all tax paid, so not added for purpose of calculating income tax due. Or do i have to reclaim that tax paid separately and if so how do i do that? thank you
Posted Thu, 11 Jan 2024 09:18:39 GMT by HMRC Admin 20 Response
Hi Rob Graham,
You need to declare the £1000 as income and then claim the £240 as foreign tax credit relief.
If the UK tax is less it will be limited to what that is.
Thank you.

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