How do dual UK and overseas tax returns work, for example with Italy or Spain?

If you are UK tax resident with income or gains arising in another country, such as rental property in Italy or Spain, that income is normally reportable in the UK on the foreign pages, alongside any return required locally. Double tax treaty relief or a foreign tax credit stops the same income being taxed twice.

UK residents are generally taxed on worldwide income, so Italian or Spanish rental income, pensions or investment income belongs on the foreign pages of the UK return, converted to sterling using a consistent exchange rate basis. Remittance basis claims can apply for eligible non-domiciled individuals, though this area has changed substantially and needs specific advice on current eligibility.

The local Italian or Spanish tax position, including any local return, withholding tax and local allowances, needs local advice, since local filing deadlines, forms and rules differ significantly from the UK system and are outside a UK accountant's expertise.

Where the same income is taxed in both countries, UK relief is usually given as a foreign tax credit, restricted to the lower of the foreign tax paid and the UK tax due on that income, following the relevant double tax treaty. This is entered on the foreign pages alongside the income itself.

Timing mismatches are common, since the Italian or Spanish tax year and payment dates rarely align with the UK's 6 April to 5 April year, so credit is sometimes claimed a year later than the foreign tax was actually paid, and evidence of the foreign tax paid should be kept to support the claim.

Rates, thresholds and deadlines quoted here reflect the 2026/27 UK position and current Companies House and HMRC guidance. Check GOV.UK, or ask us, before relying on them for your own company.