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Habsburgs never inherited Spain (there are lots of ways to prevent Habsburg takeover, so that part is easy) but, thanks to chain of lucky marriages and unexpected deaths they're getting English throne around 1520*. Just like IOTL Habsburgs possesions were divided between Imperial/Austrian and Spanish branch they're divided between English (which, just like Spanish IOTL, rules over Netherlands too) and Austrian. How would situation develop compared to OTL? At least initially Habsburgs are going to be weaker and from French POV international situation is better-Habsburgs are only in the north. Spain without Burgundian inheritance could concentrate more energy in colonies and North Africa while England would need to keep large land army on continent to protect Low Countries from French attacks-at least Netherlands are culturally and geographically closer to England than to Spain, so English Habsburgs may have less problems with local population. Obviously, Habsburg on the throne is not going to break with Rome. What abot Scotland? Is it going to be like Portugal was to Habsburg Spain?


*
Possible scenario, for those interested in such details: in Spain-posthumous daughter of Juan de Asturias lives. In Austria-Emperor Maximilian I has a son with Bianca Maria Sforza, who succeede him as Holy Roman Emperor, meanwhile Charles Habsburg rules in Low Countries, not being King of Spain, he looks for wife closer to home and marries Mary Tudor the Elder. Then on British Isles we have chain of events a bit similar to that from Iberia IOTL: James V of Scotland dies as child, just like all his siblings did IOTL, while Henry VIII has jousting accident and suddenly Charles Habsburg's wife has the best claim to the throne.
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