Taxes on Property Lets

[pauline]

I have inherited my Mother's property in Spain. My husband and I have decided not to try and sell the property for the time being - partly because of the market, and partly because we can use the underbuild apartment that it has for ourselves, whilst renting out the main Villa upstairs, as it is totally seperate. This way we should be able to pay for the upkeep of both properties with a little spending money left over.
My Question : As a non-resident, letting the property as a long-term let, what are the consequences of me not declaring the income to the authorities ?

[BigPete]

My understanding is that If you are a non resident and you have unearned income, you are obliged to pay the tax on it in your country of origin. If you are resident in Spain then you should pay the taxes there.

There was an interesting article on the subject here -
http://www.tumbit.com/blogs/1032-uk-tax-break-for-owners-of-spanish-holiday-homes.html

[MrGrumpy]

I know plenty of people who own a second home in Spain that they rent out for holiday lets and make a resonable income from it. Almost all of these people rent 'in the black' and the income goes untaxed by both the UK and Spain. To the best of my knowledge they have always got away with it.
However, that's not to say that the penalties, if you should get caught, wouldn't be severe. You would incurr a fine for tax avoidance in both countries, together with an intensive tax investigation into all your affairs in both countries, followed by a bill to pay whatever taxes they deemed you to owe - plus interest.

[OldTimer]

Regardless of the legal and moral issues here, are the chances of being caught out by the authorities, whether in Spain or in the UK, any greater as a Spanish or UK resident ?

[JoGreen]

Regardless of the legal and moral issues here, are the chances of being caught out by the authorities, whether in Spain or in the UK, any greater as a Spanish or UK resident ?

I would say that it depends on where you are legally resident for tax purposes.

[Chico]

Regardless of the legal and moral issues here, are the chances of being caught out by the authorities, whether in Spain or in the UK, any greater as a Spanish or UK resident ?

Legally Resident in UK / Letting a property in Spain : Both Tax authorities have a chance on finding you out, one will probably tell the other, both will probably fine you.

Resident in Spain / Property in Spain : Still illegal, but less chance of being found out.