Leaving UK Tax Residence When You Move to Spain: Rules for Britons

Leaving UK tax residence when you move to Spain is not a single form you file: HMRC decides your status for each tax year with the Statutory Residence Test, and Spain applies its own test to each calendar year. In the year you move, both countries can treat you as resident, and the 2013 UK and Spain tax treaty then decides which one counts for treaty purposes. The HMRC and Agencia Tributaria pages cited here do not distinguish between Britons covered by the Withdrawal Agreement and others. This article is for informational purposes only and is not legal or tax advice; verify current requirements with the relevant Spanish authority or a licensed professional.

Can you be tax resident in the UK and Spain at the same time?

Yes, and the year you move is when it usually happens. HMRC says you can be resident in both the UK and another country, and tells dual residents to check the other country’s residence rules.

Spain’s rules, set out by the Agencia Tributaria (AEAT), the Spanish tax agency, make you a resident (residente fiscal) when either of two facts holds:

• you stay in Spain more than 183 days during the calendar year, the año natural, and sporadic absences count as days in Spain unless you prove tax residence in another country;
• the main base of your economic activities or interests, the núcleo principal of your interests, is in Spain. The same page adds a presumption: if your spouse who is not legally separated and your dependent minor children live in Spain, you are presumed resident unless you prove otherwise.

The mismatch sits in the length of the year. AEAT says a person is resident or non-resident for the whole calendar year, because a change of residence does not interrupt the tax period. The UK, by contrast, usually splits the tax year in 2 when you move: a resident part and a non-resident part.

An illustration: you leave the UK in the spring and spend well over 183 days in Spain. Spain can treat you as resident for the whole calendar year, including the January to spring months you spent in the UK, which the UK treats as UK resident time: part of the previous tax year if you leave after April 5, or the UK part of a split year if you leave before.

When that happens, AEAT says to turn to the treaty the two states signed. The official pages cited here do not explain how the tie breaker combines with a UK split year; ask an adviser.

HMRC’s Statutory Residence Test, in order

HMRC’s RDR3 guidance notes set out three groups of tests, applied one after the other for each tax year: the automatic overseas tests, then the automatic UK tests, then the sufficient ties test. RDR3 starts with a shortcut: 183 days or more in the UK in the tax year makes you resident, with no need to consider any other test.

How many UK ties make you resident

The ties are a family tie, an accommodation tie, a work tie and a 90 day tie; if you were UK resident in 1 or more of the 3 previous tax years, a country tie is added. RDR3 defines each one. The number you can hold depends on your days in the UK, as HMRC’s Tables A and B on the same page show:

Split year: when UK residence ends partway through a year

If you are UK resident for the tax year in which you leave, the whole year is not necessarily taxed as a UK year. HMRC says that when there is an actual or deemed departure from the UK in a resident year, you need to consider split year cases 1 to 3, each with its own conditions.

Two limits matter:

• HMRC’s leaving guide says you may be non-resident the day after you leave, depending on your situation and on how split year treatment applies to you.
• You will not get split year treatment if you live abroad for less than a full tax year before returning to the UK.

The pages read for this guide do not set out each condition of the three departure cases; read them in HMRC’s notes or ask an adviser. Spain offers no equivalent: Spanish residence is decided for the whole calendar year.

How the 2013 UK and Spain treaty settles a tie

HMRC’s Spain tax treaties page says the double taxation convention entered into force on June 12, 2014, and has applied in the UK to Income Tax and Capital Gains Tax since April 6, 2015. The Multilateral Instrument (MLI), a multi-country agreement that amends tax treaties, has modified it, with effect in the UK for those two taxes from April 6, 2023. HMRC publishes a synthesised text of the treaty as modified; the Spanish version sits in the Boletín Oficial del Estado (BOE), Spain’s official gazette.

For an individual resident in both countries, Article 4 applies these tests in order and stops at the first one that gives an answer:

1. Permanent home. You are resident only where you have a permanent home available to you.
2. Center of vital interests. With a permanent home in both, you are resident where your personal and economic relations are closer.
3. Habitual abode. If that cannot be determined, or you have a permanent home in neither, you are resident where you have a habitual abode.
4. Nationality. With a habitual abode in both or in neither, you are resident in the state of which you are a national.
5. Mutual agreement. If you are a national of both or neither, HMRC and the Spanish tax authorities settle it between them.

A Briton who keeps a UK house available while renting in Spain has a permanent home in both, so the answer moves to the second test. Selling or letting the UK home changes the first one, which puts the sale or rental decision in the same plan.

What the treaty assigns once you live in Spain

The synthesised text and the BOE text set these rules for a resident of Spain:

• Other pensions (Article 17): taxable only in the state where you are resident, subject to the government service rule.
• Government service pensions (Article 18, paragraph 2): taxable only in the UK, unless you are both resident in Spain and a Spanish national. HMRC’s own guide says most UK government pensions, such as civil service pensions, are only taxed in the UK.
• Dividends (Article 10): the source country may tax them, capped at 10 percent of the gross amount in the general case.
• Gains on real estate (Article 13, paragraph 1): may be taxed where the property is. HMRC adds that double taxation agreements do not apply to tax on gains from selling UK residential property.
• Other gains (Article 13, paragraph 6): taxable only in the state where the seller is resident.

To claim treaty relief on UK income, HMRC lists a Spain form that you send first to the tax authority where you are resident, which confirms your eligibility and forwards it to HMRC or returns it to you. For the Spanish side of proving where you live, the tax residence certificate guide explains the Agencia Tributaria procedure, written for Americans, so use it only for the Spanish steps.

Telling HMRC you have left, and what the UK still taxes

HMRC says you must tell it if you are leaving the UK to live abroad permanently, or going to work abroad full time for at least one full tax year. The route depends on how you file today:

• No Self Assessment: fill in form P85 and include parts 2 and 3 of your P45 if you have one. The P85 guidance says the online claim is for people who have already left: if you have not left yet, you must print and post it. HMRC’s pages differ on one case: the P85 guidance (updated August 23, 2024) says you do not need the form if you send a Self Assessment return for the year you leave, while the leaving guide says to fill in a P85 if you will work full time abroad for a UK-based employer for at least one full tax year, and also send a Self Assessment return with SA109.
• Self Assessment: complete the residence section, form SA109, and send the return by post, or file it with commercial software that supports SA109 or through a professional. HMRC’s own online services cannot be used to tell it you are leaving, and the same guide gives October 31 as the deadline for paper returns.

Once non-resident, you do not pay UK tax on income or gains you get outside the UK, but UK income stays in view. HMRC lists pension, rental income, savings interest and wages as UK income you usually still pay tax on, and you usually have to file Self Assessment if you rent out UK property, work for yourself in the UK or have taxable UK savings interest. The same page says non-residents do not usually pay UK tax on the State Pension or on interest from gilts; see the State Pension and S1 guide.

Three other points from HMRC’s pages:

• Personal Allowance. British citizens living abroad still get a UK Personal Allowance on their UK income; the claim is made on form R43 after each tax year with UK income.
• Selling a UK property. A non-resident must report every sale of UK property or land by the deadline, even with no tax to pay, and report and pay any tax on UK residential property within 60 days of completion.
• National Insurance. You cannot claim back National Insurance you paid if you leave permanently.

Returning to the UK within five years

The RDR3 notes contain a rule for short absences, temporary non-residence. It applies if you had sole UK residence in 4 or more of the 7 tax years before the year you leave and your period of non-residence lasts 5 years or less. To fall outside it, the period must be longer than 5 years: 5 years plus one day.

If the rule catches you, you may pay UK tax in the year you return on certain income and gains received, or remitted to the UK, while you were away. The non-resident guide repeats the point for Capital Gains Tax: a former resident who returns to the UK within 5 years of leaving can owe it.

Your first move: count your UK days before you book the flight

Write down the date you plan to leave, then list the days you expect to spend in the UK this and next tax year, the homes you will keep and the family who stay behind. Set that list against the tables above. From the first full tax year after the move, a reader with no UK home, no UK work and fewer than 16 days in the UK meets HMRC’s first automatic overseas test; the year of departure itself depends on the split year cases.

Get a tax adviser who works with both HMRC and the Agencia Tributaria if you keep a UK home, plan to work in both countries, hold a UK government pension, expect a large gain or pension payment in the first years, or arrive in Spain early enough in the calendar year to pass 183 days there. Once the Spanish side applies, your first Spanish return follows the Spanish annual return process.

The Spain Navigator puts every step of your move to Spain in order, from the visa to settling in.