United Kingdom · overseas property
UK residents with a rental property abroad: SA106 and foreign tax credit
A UK resident letting a home in France, Germany, Spain or Italy files twice: locally, then on the SA106 foreign pages, where the foreign tax becomes a capped credit. Checked 28 October 2026.
Updated · Yann Lephay
Direct answer
Our reading: pay the country where the property is first, then report the same rent in your UK return. The overseas letting is a separate overseas property business on the SA106 foreign pages, and the tax you paid abroad becomes Foreign Tax Credit Relief, capped at the UK tax on that income: when the local tax is higher (Spain's 24% on gross rent often is), the excess is not refunded. A loss abroad cannot reduce your UK rental profits. Since 6 April 2025 the remittance basis is gone; only new arrivals eligible for Foreign Income and Gains relief can leave foreign rent out.
Two returns for one rent (UK tax year 2025-26, checked 28 October 2026)
| Step | Where | What | When |
|---|---|---|---|
| 1. Local return | Country of the property | Tax on the rent under local rules (for example Spain: Modelo 210, 24% of gross rent for a UK resident) | Local calendar |
| 2. Register | HMRC | Register for Self Assessment if you do not already file | By 5 October 2026 for 2025-26 |
| 3. UK return | SA100 with SA106 foreign pages | Overseas property income and expenses, converted to pounds, plus the foreign tax paid | Online by 31 January 2027 |
| 4. Credit | SA106 | Foreign Tax Credit Relief, capped at the UK tax on the same income and by the treaty | With the return |
Example: why the credit is capped (our calculation, basic-rate taxpayer, 2025-26, figures in pounds)
| Line | Spanish flat | Note |
|---|---|---|
| Rent | £10,000 | Gross rent received |
| Spanish tax (24% of gross, no expenses for a UK resident) | £2,400 | Paid with Modelo 210 |
| UK profit after £3,000 of expenses | £7,000 | Overseas property business |
| UK tax at 20% | £1,400 | Before relief |
| Foreign Tax Credit Relief | £1,400 | Capped at the UK tax |
| UK tax left to pay | £0 | £1,000 of Spanish tax is not recovered |
Who this page is for
For: individuals resident in the UK under the Statutory Residence Test who let a home in France, Germany, Spain or Italy. Not for: people who arrived in the UK recently and may claim Foreign Income and Gains relief, companies and partnerships, and furnished holiday lets run as a business.
Why the order matters
The UK credit is for foreign tax you have actually paid on the same income. Settle the local return first so you know the figure; if you file the UK return before the foreign tax is final, you may have to amend it. HMRC says you may get back less than you paid abroad when the treaty sets a lower rate or the income would have been taxed at a lower rate in the UK.
Losses stay abroad
HMRC treats a UK property business and an overseas property business as separate businesses. A loss on the flat abroad can be carried forward against later profits of your overseas property business, but not set against rent from a UK property.
Before 6 April 2025 and after
Up to 5 April 2025, a UK resident domiciled abroad could use the remittance basis. That regime has ended. From 2025-26 the exception is Foreign Income and Gains relief, for eligible people in their first years of UK residence; everyone else reports the foreign rent.
Hard stop
Stop if you moved to or from the UK during the year (split-year treatment), own the property through a company, have a residence dispute, or want to claim relief under a treaty you have not checked. A UK adviser who handles foreign property should prepare the return.
Related routes