Your Investments When You Move to Spain

Your furniture fits in a container. Your investments don't move so neatly. The day you become tax resident in Spain, Hacienda (the Spanish tax office) starts caring about everything you own, wherever it sits. That means the brokerage account back home, the ISA, the 401(k) and the crypto on a foreign exchange. This guide covers what changes when you settle in Barcelona, which returns you'll file, and the questions to take to an adviser before you move rather than after.

Two honest caveats first. Tax rules change, and the figures below are the ones published at the time of writing, so check the current numbers before you act on any of them. And this is a friendly map of what changes, not tax or investment advice. Nobody here is telling you what to buy or sell. The aim is that you walk into an adviser's office knowing the right questions.

When Spain starts treating you as resident

It all starts with residency. Spanish law makes you a tax resident if any one of these applies:

• You spend more than 183 days in Spain in a calendar year. Short trips away still count as days here, unless you can prove you're tax resident somewhere else.
• Your main base of business or economic interests is in Spain. That can be enough on its own, even with fewer days.
• Your spouse and your dependent children under 18 live here. If they do, Spain presumes you do too, unless you prove otherwise.

Two consequences catch people out. First, Spain treats you as resident or non-resident for the whole calendar year, not from the day you land. Second, a resident is taxed on income and gains from anywhere in the world, wherever the account sits and whoever pays it. If your old country also sees you as resident that year, the tax treaty between the two countries (where there is one) settles who taxes what. That's the first thing to check for the year of your move.

How Spain taxes your investment income

Interest, dividends and gains from selling investments go into the savings part of your income tax return. That return is the IRPF (Impuesto sobre la Renta de las Personas Físicas). Savings income is taxed on its own scale, separate from your salary. Both halves of that scale, state and regional, are set in national law. So Barcelona pays the same savings rates as Madrid (the Basque Country and Navarre run their own systems):

• 19% on the first €6,000.
• 21% on the slice from €6,000 to €50,000.
• 23% from €50,000 to €200,000.
• 27% from €200,000 to €300,000.
• 30% on anything above €300,000.

A few rules matter more than the rates.

• Your gain is worked out from what you originally paid. Spain compares the sale price with your purchase price, plus the costs of buying and selling. There's no general rule that resets your cost to the value on the day you arrive. So growth that built up before the move can be taxed here if you sell after becoming resident. That's why the timing of any sales around your move is one of the first questions for an adviser.
• Losses help. Losses on sales can be set against gains, and unused losses carry forward for four years.
• Spanish banks withhold, foreign ones usually don't. A Spanish bank or broker holds back 19% of interest, dividends and gains when you cash in fund units, and reports them to Hacienda. A foreign broker generally won't, so the sums are yours to do at filing time.
• Tax already paid abroad is credited. If a dividend was taxed at source in another country, Spain lets you deduct that tax. The credit is capped at what Spain would have charged on the same income.

One practical tip. Keep statements showing what you paid for each holding and when. You'll need both the purchase price and the date to work out Spanish gains later, possibly years from now.

The Modelo 720: telling Hacienda what you hold abroad

The Modelo 720 is an information return. It doesn't charge any tax. It tells the Spanish tax office what you own outside Spain, so it can check that the income from it turns up in your tax return. It's filed online with the state tax agency, the Agencia Tributaria, which almost everyone simply calls Hacienda.

It covers three separate blocks, and each block has its own threshold:

• Accounts abroad. Current, savings and deposit accounts with banks outside Spain. You report them if the combined balance on 31 December, or the combined average balance over the last quarter, is above €50,000.
• Investments abroad. Shares, bonds, funds, ETFs, life insurance and annuities held or managed outside Spain. You report them if their combined value on 31 December is above €50,000.
• Property abroad. Homes, land and rights over them. You report them if their combined purchase value is above €50,000.

The filing window runs from 1 January to 31 March and covers what you held on the last day of the previous year. After your first return, you only file again for a block if its combined value has grown by more than €20,000 since the last return you filed. You also file if you've sold or closed something you declared before.

A few details people miss:

• Each holder declares the full value. On a joint account, every Spanish-resident holder reports the whole balance and their percentage share. Being an authorised signatory on someone else's account abroad, say a parent's, can be enough to bring it into your return.
• ETFs count. Hacienda's own guidance confirms that ETFs held abroad belong in the investments block.
• Most pension plans don't, until they pay out. Hacienda's guidance says rights in a foreign pension plan aren't reported while you're still saving into it. They come into scope once the plan starts paying you, or if it lets you cash it in the way a life insurance policy does.
• Your first one comes quickly. If you become resident this year and you're over a threshold, your first 720 is due between January and March of next year.

What happens if you get the 720 wrong

The 720 used to be famous for its penalties. Each missing item of data cost a fixed €5,000, with a €10,000 minimum. Undeclared assets could be taxed as unexplained gains with no time limit, plus a 150% fine on top. In case C-788/19, the EU Court of Justice found that parts of this system broke EU law. Spain then rewrote the rules.

Today the ordinary penalty rules apply, the same ones used for any other information return. Filing late or not at all costs a fixed €20 for each item or set of data you should have included. The minimum is €300 and the maximum is €20,000. Those amounts are halved if you file late before Hacienda contacts you. The fines apply separately to each of the three blocks.

That's a big improvement, but don't read it as permission to skip the form. The 720 is how Hacienda cross-checks your foreign income. Undeclared dividends, interest or gains are a separate problem, with their own back tax, interest and fines. If you've missed a year, the cheapest fix is usually the one you make before Hacienda writes to you.

Crypto held abroad: the Modelo 721

Crypto has its own version of the 720, called the Modelo 721. It covers crypto held for you by a custodian outside Spain, such as a foreign exchange that keeps the private keys on your behalf. The rules mirror the 720. You file if the combined value on 31 December is above €50,000, and the window is 1 January to 31 March. You file again if the value grows by more than €20,000 or you stop holding something you declared.

Hacienda's guidance ties this return to coins held by a custodian provider, so ask your adviser how your own wallets are treated. Either way, gains when you sell crypto go into your income tax return like any other gain.

Wealth tax in Barcelona: how Catalonia does it

Spain's wealth tax, the Impuesto sobre el Patrimonio, is a national law with a regional twist. Its revenue goes to Catalonia, and Catalonia sets key parts of it for people who live here. The headline points:

• A lower tax-free allowance. Catalan residents get €500,000. The national default, which applies where a region hasn't set its own figure, is €700,000.
• Your home has its own exemption. Your main residence is exempt up to €300,000 of its value, separately from the general allowance.
• A steep scale. Catalonia's current scale starts at 0.21% on the first slice above the allowance. It rises in steps to 2.75%, with a top rate of 3.48% on taxable wealth above €20 million.
• Everything counts. As a resident you're taxed on your worldwide net wealth: the Barcelona flat, foreign shares and bank balances, minus your debts. It's measured on 31 December each year.

You have to file if there's tax to pay once the allowance and deductions are applied. You also have to file if your gross assets are worth more than €2 million, even when no tax is due. A cap links it to your income tax. Wealth tax and income tax together can't exceed 60% of your income tax base. The cap can only cut the wealth tax by up to 80%, though, so at least a fifth of it is always paid. Wealth tax already paid abroad on foreign assets can also be credited.

Who does what? The return is filed online on the state form, in the spring, with a deadline at the end of June. The Agència Tributària de Catalunya (ATC), Catalonia's own tax agency, publishes the Catalan rules and offers help with filing by appointment.

The solidarity tax on large fortunes

On top of the regional wealth tax sits a national one, the Impuesto Temporal de Solidaridad de las Grandes Fortunas. It was introduced as a temporary measure and is still being applied, with Hacienda updating its return for the most recent tax year. It only reaches people whose net wealth is above €3 million.

It uses the wealth tax's valuation rules and exemptions and a €700,000 allowance. The first €3 million of taxable wealth pays nothing, then rates of 1.7%, 2.1% and 3.5% apply on the higher slices. It's run by the state rather than by Catalonia, and it has its own return.

The key detail for Barcelona is that whatever Catalan wealth tax you've actually paid is deducted from it. Because Catalonia's scale is already steep, that deduction often cancels most or all of the solidarity tax. How it lands for you depends on your numbers, including the income tax cap above, so work it through rather than assume.

Foreign funds, ETFs and the traspaso trap

Spain has one feature that surprises newcomers in a good way. If you sell units in one investment fund and the money goes straight into another fund, the gain isn't taxed yet. This formal fund-to-fund transfer is called a traspaso. The new fund keeps the old fund's purchase price and date, and the tax waits until you finally cash out.

The catch is that this deferral has conditions, and many expat portfolios don't meet them:

• ETFs are excluded. The law specifically leaves out exchange-traded funds, whatever market they trade on and whatever index they track. Selling one ETF to buy another is a taxable sale.
• Foreign funds have to be inside the Spanish system. A fund from abroad only qualifies if it's an EU-regulated fund, based in an EU country and registered with Spain's securities regulator for sale here. The switch also has to go through a distributor registered in Spain.
• The money can't touch your account. If the proceeds land with you first, even briefly, the deferral is lost.

In practice, a US mutual fund, a UK-based fund or units held on a foreign platform generally can't be switched tax-free. You don't need to sell everything because of this. Just learn the rules before you rebalance, because in Spain each of those switches counts as a sale. Some people restructure before they become resident, and others keep what they have and buy differently from then on. Which suits you is a question for your adviser, not for us.

ISAs, 401(k)s and other home-country wrappers

UK ISAs. UK rules let you keep an ISA after you move abroad, and the UK keeps treating it as tax-free. You can't pay new money in while you're not UK resident, though. Spain is a different story. Spanish income tax has no exemption for foreign wrappers like an ISA, so Spain generally looks straight through it. Interest, dividends and gains inside it are treated like any other savings income for a Spanish resident. The holdings inside it can also count towards your Modelo 720 and wealth tax totals.

US citizens and US accounts. If you're American, the US taxes you on worldwide income wherever you live, so you keep filing a US return from Barcelona. The US-Spain treaty and foreign tax credits exist to stop double taxation, but the two systems don't always line up neatly. Two areas deserve specific advice. One is retirement accounts like a 401(k) or an IRA. What Spain taxes, and when, depends on the account type and how you draw on it, so get advice before you take money out. The other is funds. Many funds based outside the US count as passive foreign investment companies under US rules, which brings an extra IRS form and its own tax treatment. So the European funds a Spanish bank offers you may be a poor fit. Our guide to moving to Spain from the US covers the US filing side.

Other pensions and wrappers. Each country's tax-favoured accounts are built for its own tax system, and Spain doesn't automatically honour that status. Ask how each one is treated here, and whether it belongs on your 720, before you assume anything carries over.

Moving for work? The Beckham regime

People who move to Spain for a job, and some entrepreneurs and other newcomers, can opt into a special regime nicknamed the Beckham Law. It changes the investment picture too. Only income earned in Spain is taxed, with all your work income counted as Spanish, so investment income from abroad generally stays outside Spanish income tax. You don't file the Modelo 720, and for wealth tax you're only taxed on assets in Spain. Family members who aren't on the regime themselves may still have to file.

The regime covers the year you arrive and the following five. It isn't automatic, so you have to opt in, and it doesn't suit everyone. Our Beckham Law guide explains who qualifies and what it's worth.

Your first year as a resident, in order

• Before you move. List every account and holding with its purchase price and date. Talk to an adviser about any sales, about how your funds are held, and about whether the Beckham regime fits.
• Your first resident year. Spain taxes your worldwide income for the whole calendar year. Spanish banks and brokers withhold as you go, and foreign ones generally don't.
• From 1 January to 31 March of the next year. File the Modelo 720 and the Modelo 721 if you're over a threshold.
• In the spring, up to the end of June. File your income tax return, plus the wealth tax return if it applies to you.
• After that. If your net wealth is high enough for the solidarity tax, its return has its own, later window.

What to ask your adviser, ideally before you move

• Which year will I become tax resident in Spain, and does a treaty with my current country change anything for that year?
• What would selling, keeping or restructuring each holding mean for tax, before and after I become resident?
• Which of my accounts, investments and crypto go on a Modelo 720 or 721, and in which block?
• Do any of my funds qualify for a traspaso, and what happens when I rebalance my ETFs?
• How will my ISA, 401(k), IRA or pension be taxed here, and when?
• Am I near Catalonia's wealth tax allowance or the filing threshold once my home is counted?
• Does the Beckham regime fit my situation, and what would it change on the investment side?
• Who files what, and when, in Spain and in my old country?

Bring a list of every account and holding, where it's held, and what you paid. A good adviser will want that before giving you any answer worth having.

How Locallista helps

None of this is hard to understand once someone lays it out. The hard part is that it touches two or three tax systems at once, with Spanish forms and deadlines that don't wait for you to settle in. We're a directory of English-speaking local service providers, built so you can find someone who'll walk you through it in plain English.

Every business is screened before it's listed, reviews are phone-verified, and the ranking reflects real expat experience, not who paid the most. It's free to browse and free to get in touch. When you're ready, find a vetted English-speaking tax lawyer in Barcelona or a tax consultant in Barcelona for the cross-border side. If you'd like help with the portfolio itself, look at our investment consultants in Barcelona. You'll find them all, along with accountants and notaries, in our legal, financial and administrative directory for Barcelona. If you're self-employed too, our guide to finding an English-speaking accountant in Barcelona covers the autónomo side.

Frequently asked questions

Is the Modelo 720 a tax on my foreign assets?

No. It's an information return, so filing it doesn't cost you anything in itself. Tax on those assets comes through your income tax return, and through the wealth tax if you're above Catalonia's allowance. The 720 is how Hacienda checks that the income from them is being declared.

Do I have to file the Modelo 720 every year?

No. You file it the first time a block goes over the threshold. After that, you only file again for a block if its value has grown by more than the set margin since your last return, or if you've sold or closed something you declared before. Accounts, investments and property are each tracked separately.

Can I switch between ETFs without paying tax, like a Spanish fund traspaso?

No. Spanish law leaves exchange-traded funds out of the traspaso deferral, wherever they're listed. Selling one ETF to buy another counts as a sale, and any gain goes into that year's income tax return. Traditional funds can qualify, but only if they meet the Spanish conditions.

Is my UK ISA still tax-free once I live in Barcelona?

Only in the UK. You can keep the ISA and the UK still treats it as tax-free, although you can't add new money while you're not UK resident. Spanish income tax has no exemption for it, so income and gains inside it are generally taxable here like any other savings income.

Will I pay wealth tax in Barcelona?

Only if your net wealth is above Catalonia's tax-free allowance. Your main home has its own separate exemption on top of that. Even if no tax is due, you still have to file a return once your gross assets pass the filing threshold. Add everything up once a year, using values on 31 December.

I keep crypto on an exchange outside Spain. What do I need to file?

If the exchange holds the keys for you and the total value at year end is above the threshold, you file the Modelo 721 between January and March. Gains when you sell go in your income tax return either way. If you hold your own keys, ask your adviser how the rules apply to your wallets.

Should I talk to an adviser before or after I move?

Before, if you can. Some of the decisions that matter, like whether to sell anything and how to hold your funds, are easier while you're not yet resident. After you arrive, the first deadlines come round fast: the Modelo 720 early in the year after you become resident, then your income tax return.