Double Taxation in Spain: A Guide for US and UK Expats

Becoming a tax resident in Spain (spending 183+ days here) means you are liable for taxes on your worldwide income. However, thanks to Double Taxation Agreements (DTAs) with countries like the US and UK, you should rarely pay tax twice on the same Euro—if you file correctly.

These treaties define which country has the primary right to tax specific income streams (e.g., salaries, pensions, property rent). This guide breaks down the essential rules for US and UK expats to ensure compliance and avoid overpayment in 2026.

Table of contents

• What is tax residency?
• Spain-UK Double Tax Treaty Highlights
• Spain-US Double Tax Treaty Highlights
• Government Pensions vs Private Pensions
• How to claim relief (Tax Credits vs. Exemptions)
• FAQs
• Related guides

What is tax residency?

You are automatically considered a Spanish tax resident (liable for worldwide income tax) if you meet any of these conditions in a calendar year:

• You spend 183 or more days in Spain.
• Your “centre of vital interests” (spouse, children, or main economic activities) is in Spain.

Note: If you are not a resident but own property, you must file Non-Resident Income Tax (Modelo 210).

Spain-UK Double Tax Treaty Highlights

The 1976 treaty (updated 2014) remains fully in force post-Brexit, using the Credit Method for most income.

• Private Pensions (SIPP, etc.): Taxed ONLY in Spain (the country of residence). You must present proof of Spanish tax residency to the UK administrator to stop them withholding tax at source.
• Government Pensions (Civil Service, Military): Taxed ONLY in the UK (the country of origin). You must still declare this income in Spain as “exempt income,” which can affect the tax bracket applied to your other Spanish income.
• Rental Income: Taxed primarily in the country where the property is located. Spain then gives you a credit for the tax paid to HMRC.

Spain-US Double Tax Treaty Highlights

The US is unique due to Citizenship-Based Taxation, meaning US citizens must file a US return (IRS Form 1040) regardless of where they live.

• The Saving Clause: The treaty allows the US to tax its citizens as if the treaty didn’t exist. You must still file both Spanish (Modelo 100) and US tax returns.
• Foreign Tax Credit (FTC): For taxes paid to Spain, you generally use the Foreign Tax Credit on your US return to offset the US tax liability, preventing true double taxation.
• Social Security: Under the Totalization Agreement, US Social Security benefits are generally taxable only in Spain if you are a Spanish resident.

Government Pensions vs Private Pensions

This is the number one source of DTA confusion for expats:

• Public (Government/State) Pensions: Almost always taxed only at the Source (UK Government Pension taxed in the UK).
• Private Pensions (e.g., 401k, Private SIPP): Almost always taxed only at your Residency (Taxed in Spain).
• Tax-Free Wrappers: Spain does not recognize the tax-free status of US Roth IRAs or UK ISAs. Any interest, dividends, or gains within these wrappers are typically taxable in Spain.

How to claim relief (Tax Credits vs. Exemptions)

Relief is claimed on your annual Spanish tax return (Modelo 100) using one of two methods:

1. Credit Method: You declare the full foreign income in Spain but claim a deduction (credit) for the tax already paid to the foreign country (e.g., US or UK). This is the most common method.
2. Exemption Method: The income is declared in Spain but is exempt from taxation (e.g., UK Government Pension). It is still included to determine your overall marginal tax rate.

FAQs

Do I pay tax on my UK ISA or US Roth IRA? Yes. Spain treats these as standard investment accounts, and gains/dividends are subject to Spanish Savings Income Tax.

I have rental income from the UK/US. Where do I pay tax? You pay tax in both countries, but Spain will provide a credit for the tax already paid to the UK/US, ensuring you don’t pay tax twice.

Do I need a Certificate of Tax Residency? Yes. You may need this document (issued by the AEAT) to send to your foreign financial institutions or pension providers to prove you are a Spanish resident and should not have tax withheld at source.

Related guides

• The Beckham Law Spain 2026 Guide
• Non-Resident Tax in Spain (Modelo 210) Explained
• Registering for Public Healthcare

This guide is informational; international tax is highly complex and hinges on specific circumstances. Book a call with our specialist tax partner.