Spanish rental income on your UK tax return: SA106 and foreign tax credit

Spain and the UK both tax the same rent

UK residents pay UK tax on worldwide income, so rent from a Spanish property goes on your Self Assessment as well as on the Modelo 210. You report it on the foreign pages (SA106), in pounds.

The UK profit is worked out under UK rules, so costs Spain doesn't let UK owners deduct can still reduce the UK figure.

Foreign tax credit relief

You can claim the Spanish tax paid on that rent as a credit against the UK tax on the same income. The credit can't be more than the UK tax on that income, so higher Spanish tax on gross rent is often not fully used.

The credit is also limited to the Spanish tax you'd pay after taking reasonable steps to reduce it. If Spanish tax is later repaid to you, for example after a successful overpayment claim, the credit falls too and you may need to correct your UK return. If the 2025 court ruling on deductions is upheld, HMRC could expect UK owners to claim Spanish deductions.

Imputed income

Spanish tax on imputed income (days the property wasn't let) has no matching UK income, because the UK doesn't tax you for using your own home. In general it gives no UK credit.

Exchange rates and dates

HMRC's notes say to use the exchange rate at the time the income arose. In practice HMRC's published monthly or average rates are commonly used; whichever you pick, keep it consistent. Spain taxes the calendar year; the UK tax year runs 6 April to 5 April, so you may need to split figures across two UK years.