With the UK currently set to leave the EU by the end of January 2020, anyone who owns a Spanish holiday home needs to be prepared for the impact of Brexit on taxation.

Spanish tax law makes specific provision for EU/EEA residents that benefits people living in member states over others from outside the EU bloc. In some cases, this is expected to lead to a considerably increased Spanish tax bill.

The changes Spanish holiday home owners are likely to face include:

  • Higher tax on rental income with no deductions allowed in respect of costs
  • Higher tax on deemed rental income
  • Compulsory use of the state system for inheritance
  • Loss of capital gains tax benefits
  • Loss of deferral on exit tax
  • New 10 per cent tax on dividend paid to a UK company that owns less than a 10 per cent share of a Spanish company

If you have a Spanish holiday home, it is vital that you start planning for the effects of Brexit now.

Link: How Brexit will affect the taxation of Spanish holiday homes

Ashby Berry Coulsons is the trading name of Ashby Berry Coulsons Ltd. Registered in England & Wales, Company registered number 07945386.
Registered to carry on audit work in the UK and Ireland by the Institute of Chartered Accountants in England and Wales.
Registered office 2 Belgrave Crescent, Scarborough.