If you are a UK tax resident, yes: the UK taxes you on your worldwide income and gains, so your Spanish property comes into your UK tax affairs, even though Spain taxes it first. The good news: the UK-Spain double taxation treaty stops you paying tax twice on the same income. Here is what you need to know, to be confirmed with your adviser for your own situation.
If you do not let the property
In Spain, you declare a deemed income for the second home every year, as explained in our article on annual taxes. In the UK, a property you only use yourself does not create any income to declare.
If you let it
Rent is taxable first in Spain, where the property is located. As a UK resident you must also declare it on your Self Assessment return, on the foreign income pages. You can then claim Foreign Tax Credit Relief for the Spanish tax already paid, which reduces or cancels the UK tax on that income. The UK and Spanish rules on deductible expenses differ, so the two calculations rarely match exactly.
Your Spanish bank account
The UK has no annual form just for declaring a foreign bank account. Any interest it earns is foreign income, though, and goes on your Self Assessment return. Keep the statements: they also serve as proof of where your money came from and went.
Inheritance tax
The UK has no wealth tax, but inheritance tax is the point to watch. Since April 2025, long-term UK residents (UK resident for at least 10 of the previous 20 tax years) are within UK inheritance tax on their worldwide assets, including a Spanish home. Spain can also tax the inheritance, under Catalan rules. Plan this with an adviser when you buy, not later.
When you sell
The capital gain is taxed first in Spain, with 3% of the price withheld by the buyer if you are not a Spanish resident. As a UK resident you also report the gain to HMRC, which gives credit for the Spanish tax under the treaty. Watch the deadlines: UK reporting rules for property gains have their own timetable.
None of this is complicated, as long as you know from the start. A Spanish gestoría handles the Spanish returns, and your UK accountant adds the Spanish figures to your Self Assessment. The cost is modest compared with the risk of getting it wrong.
