Britons who have a house or apartment in Spain and rent it out are advised to tell the UK tax authorities. This applies even if the amount earned just covers their maintenance costs.Gibraltar banks have been forced to disclose all the details of their accounts to U.K.government who have set up a special investigation department to prosecute all account holders who have not declared property or business holdings in Spain.
Owners are advised they should declare any extra income of this sort. If you haven't made a declaration before and hence it relates to a return outside the current tax period, then you will need to make a separate disclosure and explain the circumstances.
As with all dealing with the tax agency experts say that if you make a
voluntary disclosure this will be in your favour. They say: "Tell the tax man everything and in this way you should avoid a full-scale tax inquiry into your affairs."
Her Majesty's Revenue and Customs will advise you about the additional tax you will have to pay, including interest on any late payment, which is about 7.5 per cent a year. You are also advised to seek professional advice from an accountant before contacting the HMRC so as to avoid a penalty for negligence.
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