Home-country tax returns you may still owe while living in Spain

Key rules

• FBAR: US citizens must file an FBAR when foreign accounts, including Spanish ones, total over $10,000 at any time in the year.
• US return: US citizens and green card holders keep filing a federal return on worldwide income while living in Spain.
• Double tax: The foreign tax credit is usually the better way to avoid double tax, because Spain's rates are higher.
• UK nationals: Leaving the UK does not by itself require Self Assessment, but UK rental income and UK property sales still do.
• EU nationals: Most EU countries expect you to de-register when you leave, and you may still file for income at home.

US citizens: you keep filing from Spain

If you are a US citizen or green card holder, you file a US federal return (Form 1040) every year on your worldwide income, wherever you live. You must file if your gross income reaches the filing threshold for your status. For a single filer this is roughly the standard deduction, about $15,000 for 2025. If you are married filing separately, the threshold is tiny, so you will almost always need to file. Net self-employment income of $400 or more means you file regardless. The IRS changes these figures every year, so check the current one.

Living abroad gives you an automatic extension to 15 June. The checklist below has the other dates.

Foreign bank accounts

An FBAR is the US report on foreign bank accounts. You must file one when your foreign accounts, including Spanish bank accounts, total over $10,000 at any time in the year. You file it electronically with the US financial crimes unit (FinCEN), not with the IRS.

Form 8938 is a separate report attached to your tax return. It applies only when your foreign financial assets pass higher limits. If you live abroad and file as single or married filing separately, the limits are $200,000 at year end or $300,000 at any time. If you file jointly, they are $400,000 and $600,000. You may need both forms for the same accounts.

Avoiding double tax

Spain taxes residents on worldwide income, and the US taxes you as a citizen. Two tools reduce the overlap:

• Foreign tax credit (Form 1116). It gives a dollar-for-dollar credit for Spanish income tax paid, up to the US tax on that foreign income. Unused credit carries back 1 year and forward 10. With Spain's higher rates, this is usually the better fit.
• Foreign earned income exclusion (Form 2555). It excludes wages or self-employment income up to a yearly cap, about $130,000 for 2025. It does not cover pensions, dividends or capital gains. You need a tax home abroad and must pass the bona fide residence test or the 330-day physical presence test. Claiming it blocks credits on the excluded income and can reduce benefits such as the child tax credit.

The US-Spain tax treaty divides taxing rights, but it lets the US tax its own citizens as if the treaty did not exist, with limited exceptions. In practice the treaty helps mainly through the credit and some pension and social security rules. The decision block below compares the options.

If you missed past returns

If you missed returns or FBARs by honest mistake, a program for taxpayers abroad lets you file the last three years of returns and the last six years of FBARs, with a signed statement that it was not willful, and pay no penalty. You must have lived outside the US for at least one of the last three years and not be under IRS examination. Tax due and interest are still payable. If your failure was willful, speak to a specialist adviser before you file anything.

UK nationals: narrower filings

Leaving the UK does not by itself mean you must file Self Assessment. Your tax residence depends on the UK residence test for each tax year, not on your nationality. The year you leave may be split, with UK treatment before departure and non-resident treatment after.

You still need a return if you have UK income not fully taxed at source, such as rental income, self-employment or some pensions. You also need one for UK gains, such as selling UK residential property, which you must report within 60 days. Also file if HMRC asks you to. The UK-Spain treaty may move taxing rights: government pensions are taxed in the UK, and most private pensions in Spain.

Telling HMRC you have left is covered in the process below.

Other EU nationals: mostly departure notices

Most EU countries ask you to de-register from the local population register when you leave. This usually ends tax residence, though some countries keep taxing certain links. Examples:

• Germany: de-register at the local registration office. A German return may still be due for German income.
• France: tell the tax office and file for French-source income. Exit tax rules apply to certain gains.
• Italy: register with AIRE, the register of Italians abroad. It is mandatory for stays over 12 months and ends Italian residency.
• Netherlands: de-register from the municipal register, tell the tax authority and file a final return for the year you leave.

After that, ongoing filings depend on income or assets you still have at home. Check the current rules with your country's tax authority.

Spanish reporting alongside

Once you are tax resident in Spain, you also report worldwide income to Spain. If you hold more than a set amount of foreign assets, Modelo 720 applies. The checklist below gives its window.

Choosing between options

How should you reduce US double tax on income earned while living in Spain?

• Claim the foreign tax credit (Form 1116): Fits most people in Spain, since Spanish rates are usually higher. You get a dollar-for-dollar credit for Spanish income tax paid, up to the US tax on that income, and excess carries back 1 year or forward 10.

• Claim the foreign earned income exclusion (Form 2555): Fits if your income is wages or self-employment, you pass the bona fide residence or 330-day presence test and have a tax home abroad. It excludes up to about $130,000 for 2025, but not pensions, dividends or gains.

• Rely on the US-Spain tax treaty alone: Rarely enough by itself, because the US can still tax its citizens.

Use the foreign tax credit unless your income is mostly earned and Spanish tax is low.

Telling home-country bodies you are moving

• UK: tell HMRC, the UK tax office, that you are leaving, using form P85 or its online notice, with your departure date and new address: when you move

• UK: tell the pension service (DWP or the International Pension Centre) your new address and bank details, and report the move to Jobcentre or Universal Credit and DVLA by phone, online or post. Also tell your GP and the council, and register on the overseas electoral roll: when you move

• US: send the IRS Form 8822 or put your new address on your return, update the Social Security Administration by phone, online or through the US Embassy or consulate, and enrol online with the State Department's STEP. Update your state voter registration and DMV, and if you are a man aged 18 to 25 keep your Selective Service registration current: when you move

• Add the extra steps if you own home-country property or have income there: UK landlords register with HMRC under the Non-Resident Landlord Scheme and keep filing Self Assessment; US citizens keep filing a US return on worldwide income, claiming the Foreign Tax Credit or the Foreign Earned Income Exclusion, and report foreign accounts; Spanish residents declare worldwide income: once you have moved and each year after

• Send each notice quickly, and if you have a UK student loan, tell the Student Loans Company: before leaving or within 28 days of moving abroad

• Keep a copy of each notice, the confirmation email or portal reference, the postal receipt, and proof of your departure date (flight, lease end, and your padrón registration, the town hall residents' register, issued by your Spanish town hall). Keep tax records for as long as the tax office can query your returns: generally at least 22 months after the UK tax year, and about three years from filing in the US, longer in some cases: at the time you send each notice

• Ask each body to confirm your new address and status in writing: HMRC and the IRS for tax, the pension service and Social Security Administration for pensions and benefits, DVLA and your state DMV for licences and vehicles: after each notice is sent

• If notice is late or missed, act at once: contact the body, correct your address and repay any overpayment. Late notice can mean benefit overpayments to repay, wrong UK tax coding and later tax owed with interest and penalties, missed IRS letters, penalties for unfiled US returns or unreported accounts, and Medicare Part B late enrolment penalties. UK Universal Credit and most means-tested benefits end when you leave. Ask a cross-border tax adviser if a penalty notice arrives: as soon as you find a missed notice

Yearly checklist of home-country ties to keep in order

Yearly home-country ties to keep in order

• File your US federal return (Form 1040) by 15 June if you live abroad, attaching a statement that you live outside the US.

• Send Form 4868 if you need more time: it moves the filing date to 15 October, and abroad filers can ask for 15 December. Pay any tax due by 15 April, because interest runs from then.

• File your FBAR (the US report on foreign bank accounts) by 15 April. It extends automatically to 15 October with no request needed. The threshold is set out in the home-country tax returns article.

• File your UK Self Assessment return (SA100 with the SA109 residence pages) if you have UK income: by 31 October for a paper return, or by 31 January for an online return. The UK tax year ends 5 April.

• Pay your UK balancing payment and first payment on account by 31 January, and the second payment on account by 31 July.

• Report and pay UK tax on any UK residential property sale within 60 days of completion.

• File Modelo 720, the Spanish report on foreign assets, between 1 January and 31 March if any one category of foreign bank accounts, investments or real estate exceeds €50,000 on 31 December. After that, refile only if a category rises by more than €20,000.

• Check the rent flow on any UK property you let: apply to the Non-Resident Landlord Scheme to receive rent without tax deducted, or expect your letting agent or tenant to withhold basic-rate tax each quarter.

• Ask your mortgage lender for consent to let if you rent out a home-country property with a mortgage, and keep the mortgage payments up to date.

• Check any home-country student loan or other loan: the notice and repayment rules are in the article on mortgages, student loans and credit history at home.

• Check your passport expiry date and start renewing a few weeks ahead. For Schengen travel, the passport must have been issued within the last 10 years and be valid at least 3 months beyond your planned departure.

Frequently asked questions

Can the foreign earned income exclusion cover my pension or investment income?

No, the foreign earned income exclusion covers only wages and self-employment income, not pensions, dividends or capital gains.

Do I file Form 8938 as well as an FBAR for the same Spanish accounts?

Yes, both can apply to the same accounts, but Form 8938 has much higher thresholds. Living abroad, single filers meet it at $200,000 at year end or $300,000 at any time, and joint filers at $400,000 and $600,000. You attach it to your tax return, while the FBAR is filed electronically with FinCEN, not the IRS.

What can I do if I missed past US returns or FBARs while living in Spain?

You can use the Streamlined Foreign Offshore Procedures if your failure was not willful. You file the last three years of returns and six years of FBARs with a signed statement, and pay no penalty, though any tax and interest are still due. If you owe no tax, delinquent FBARs can often be filed alone, and willful cases need a tax lawyer.

Do I need UK Self Assessment after moving to Spain?

Not automatically, since leaving the UK does not by itself require a return. You still need one if you have UK income not fully taxed at source, such as rent or self-employment, or UK property gains. In the year you leave, split-year treatment may apply.

Do other EU nationals have to de-register at home when moving to Spain?

Yes, most EU countries require you to de-register from the local population register, which usually ends tax residence there. Germany uses the Meldeamt, Italy requires AIRE registration for stays over 12 months, and the Netherlands wants a final return for the year you leave. A return may still be due for income or property left at home.