NT Code when moving to Spain while also having UK rental income

Hi there, I am planning to move to Spain with my family around the 15 of August. I would have spent 137 days in the UK by then. As I am moving with my family and my new home will be in Spain, I believe I will be treated as a Spanish Tax resident. We are moving under the new teleworker visa and I will carry on working for my UK employer remotely. I also plan to rent my UK home initially in case we decide to move back to the UK. My questions are as follows: 1) Will the split year rule apply to me for the tax year 2023/2024. If yes, will I then only be liable to pay tax in Spain from the 16 of August onwards or do I still have to pay taxes in the UK? 2) From the year 2024/2025 onwards will I be considered only a tax resident of Spain as long as I do not trigger any of conditions that make me a tax resident of the UK? 3) Can I apply for a NT tax code so that I pay 0% tax on my employment income in the UK from the 16 of August and only pay taxes in Spain? I would like to continue paying NI contributions as I will not be eligible for the Spanish Social Security system. 4) I am planning to submit an NRL1i form so that I get my rental gross and then file a self assessment return for my rental income? Am I eligible to do a self assessment if I have been assigned a NT tax code? Also, what will I declare as my income on the self assessment form, only the rental income or rental income plus the employment income? Will the employment income be classes as earned in Spain rather than the UK for the purpose of the self assessment? If yes, what band will the rental income be taxed on considering that the rental income alone will be below the personal allowance threshold? Many thanks in advance.

Hi ray33,

If you qualify for split year then you only report any foreign income for the UK part of the year RDRM12000 - Residence: The SRT: Split year treatment: .
If you do not qualify then you will need to report all your foreign income to the UK Tax on foreign income.  
The guidance at RDRM12150 - Residence: will help you work out if split year treatment applies.  
UK rental income remins liable to tax in the UK no matter where you are resident and you will therefore need to complete a tax return to show this.
For 23/24 you will declare your employment income and rental income and you will need to enclose HS304 Non-residents — relief under double taxation agreements (2021).
As for being a Spanish tax resident, you will need to submit a Residencia Fiscal en Espania Convenio certificate to confirm taxes are being paid in Spain.

Thank you.
 

Thank you for replying to my query. I will still be paid through my employers UK payroll for the time being. They will be applying for Form CA3822 so that I continue to pay NI contributions in the UK under the UK and EU social security agreement. For income tax can I change my payroll code to NT so that I pay 0% income tax on my payslip and then I pay my taxes in Spain which would avoid me having to pay taxes in both countries on my employment income and then claiming tax relief or refund under the double taxation agreement. For the year 24/25 do I also declare my employment and rental income in the UK's self assessment form or just my UK rental income since by then I will be a Spanish tax resident? Thank you Ray

Hi ray33,

It will just be the rental income you declare if you remain non tax resident for the tax year.

Thank you. 
 

Thank you for replying to my query. One last bit that I would need to check. I will still be paid through my employers UK payroll for the first 12 to 18 months. They will be applying for Form CA3822 so that I continue to pay NI contributions in the UK under the UK and EU social security agreement. For income tax can I change my payroll code to NT so that I pay 0% income tax on my payslip and then I pay my taxes in Spain which would avoid me having to pay taxes in both countries on my employment income and then claiming tax relief or refund under the double taxation agreement. It also helps me avoid any confusion as a result of the tax years starting at different times in each country. Kind regards, Ray

Hi ray33,

You could ask your UK employer to submit a S690 direction to opertate PAYE on a non resident employee's earnings.
Apply for a direction to operate PAYE on an employee's earnings

Thank you.

Thank you