Readers’ forum: Spanish tax problem

A UK national emigrated to Spain a few years ago and has been non-UK resident for 2016-17 onwards. His main source of income is substantial UK dividends from a controlling interest in a UK-based manufacturing company. This has been reported on his UK tax return as excluded income so is not subject to UK income tax.

He is in dispute with the Spanish tax authorities. As a non-resident he is by ITTOIA 2005 s 399(2) ‘treated as having paid income tax at the dividend ordinary rate on the amount or value of the distribution’. In essence this seems to be a straightforward dividend tax credit and I suggested it may be possible to claim double tax relief for this on his Spanish tax return because the UK considers income tax to have been paid. The Spanish tax authorities are seeking to tax the whole of...