Tax return for UK National now resident in Spain

I am assisting a colleagues parents with preparing their tax return. They retired to Spain and became resident in Spain in Sept 2020 and started paying Spanish tax on their UK income Jan 2021. They have each drafted a “DT-Individual Spain” to claim relief at source from UK tax which they intend to submit with the 2023-24 Tax Return. We appreciate that once this application is accepted by HMRC that they will not need to include on their UK Tax Returns UK State Pensions, NHS Pension and private pension (currently taxed at source) but their Government Pension will remain taxed in the UK and will need including together with any other UK income. The question surrounds the submission of the “DT-Individual Spain” and the 2023-24 Tax Return given we are now in November. Should the 2023-24 when submitted include the UK State Pension and if so should the “DT-Individual Spain” be submitted at the same time or should it be delayed until the final 2023-24 tax liability is paid? The alternative is to submit the “DT-Individual Spain” in the belief it will be accepted before January 2025, but this potentially causes issues if it is not processed in time. The concern is around HMRC processing and the repayment of tax due for 2023-24 falling into a ‘black hole’ with prior years refunded and not 2023-24.

Hi ,
 

The form can be submittted at the same time but as it has not already been aprroved, they should consider including HS304 with the tax return to then allow the actual DT from to be processed for the other year. The Spanish residence certificate should aslo be included -  See :  HS304 Non-residents — relief under double taxation agreements (2024)  . Thank you .

Thank you for your reply. Asking a follow-up question as I am finding conflicting information; Is a NHS pension paid by NHSBSA treated as a government service pension and taxable in the UK or is it taxable in Spain?

Further question(s) if you don't mind. I've looked and cannot find. On completing HS304: 1) Which Article Number of the DTA is relief for pension income claimed (I appreciate that we only claim for pension income that is not a government service pension. eg an appropriate private, NHS (sometimes) and state pension? We exclude government service pensions from this form) 2) Likewise, Which Article Number of the DTA is relief for property rental income claimed?

Pentonia, Surely the NHS pension is also a Government Service pension, so taxable only in the UK unless they have Spanish citizenship, when Spain gets the tax, as would be the case with what you describe as their Government pension. The next question is, what income do they have that would warrant them still submitting UK tax returns - one for HMRC to opine on...

Hi Pentonia,
A list of government and non government pension can be found at:
DT claims and applications - Types of income: Pensions and Annuities
The list advises that a NHS pension paid by NHSBA is non government, so would be taxable in Spain, if that is your country of residence.  Article 17 of the UK / Spain tax treaty covers pensions and article 6 covers income from property:
2014 UK-Spain Double Taxation Convention
Thank you.