The UK government created ISAs (Individual Savings Accounts) in 1999 to encourage people to save. 13 million Brits now have one. 

But what happens when you move to a different country? 

You might be curious to know if you can continue to contribute to your ISA after moving to Spain, or if there is a Spanish equivalent that you can transfer over to. Let's take a look. 

Do ISAs exist in Spain?

Sadly not. 

You might have seen the terms 'Spanish ISA' or 'European ISA' being used by financial advisors when referring to a Spanish Compliant Investment Bond. Don't be misled, these investments are very different (read our review here). 

With an ISA, the interest, dividends and investment growth is tax-free. 

With an investment bond, you defer the tax  (i.e. paid later rather than right away) but the income and returns are NOT tax-free

Do I need to close my ISA before I move to Spain?

No. As explained on the UK government website, you can keep your ISA open if you move abroad.

However, it is not possible to add money to it after you move (unless you are a crown employee working overseas or their spouse/civil partner).

Also, as soon as you stop being a UK resident, you are obliged to inform your ISA provider.

Do the Spanish tax authorities recognise UK ISAs?

Unfortunately not. You can only enjoy tax-free income and profit from an ISA if you are a UK resident

Once you become a Spanish tax resident (i.e. after spending more than 183 days in Spain), you'll be expected to pay tax on any income and profit from selling investments each year.

So how will things work with my ISA once I'm in Spain?

Although you can keep your ISA open, things can become complicated.

Let's think about what an ISA actually is.

Firstly, an ISA is essentially a tax wrapper. Within it you will hold one or more savings or investment accounts. For example, you might have a savings account within a cash ISA and four different investment funds within a Stocks & Shares ISA.

As Spain doesn't recognise ISAs, all the Spanish tax authorities will see is the accounts within, i.e. the savings account and four investment funds.

As we've said, as a Spanish tax resident, you'll have to pay tax on the income and profit you make each year to the Spanish tax authorities.

This means that you'll have to pay income tax on the interest earned from your Cash ISA and the dividends and realised investment gains (see below for explanation) from your Stocks & Shares ISA. 

If my stocks & shares ISA increases in value, will I have to pay tax on the increase?

No. You'll only pay tax on income received (i.e. interest and dividends) and profit from selling funds within the ISA (i.e. when you make a full or partial withdrawal or change to a different fund).

To understand this, let's compare the funds you hold within your ISA to a property, such as a holiday home you own.

If the holiday home goes up in value, you won't pay tax on that increase as you haven't actually sold it. 

But if you sell it and make a profit, you'd have to report this profit on your tax return and pay tax on the capital gain (i.e. the difference between the cost of purchase and what you made from selling it).

Similarly, investment funds are the same. You will only pay tax if you change funds, receive dividends (which we can compare to receiving rent from a tenant for your house which, of course, you'd pay tax on) or make a partial or complete withdrawal.

(N.B. don't be confused by the fact that the fund will buy & sell investments - i.e. shares & bonds - during the year. This is irrelevant to you as a tax payer as you are simply the owner a unit of the fund and all that matters to you is the value of the fund itself.)

How can I download a tax statement for my ISA to give to my account?

Here lies another problem.

As ISAs are tax-free within the UK, ISA providers aren't accustomed to providing tax statements. To complicate matters further, the Spanish tax year runs from 1 January - 31 December which is different from the UK tax year (which runs from 6 April to the following 5 April). 

Therefore it will probably be a case of downloading a general statement of income and gains/losses and either working out the totals yourself or giving it to your accountant. What a headache! 

What about the Modelo 720?

The Modelo 720 is a form that must be completed by all residents of Spain and submitted to the tax authority if you hold assets overseas over a certain amount in certain financial categories.

If you have investments worth more than €50,000 in total (including your ISA), you'll need to declare your ISA on the Modelo 720 each year.

Note that no tax is due on the Modelo 720; it's for information purposes only.

As a result, this means more work: you'll need to work out the average balance between October - December of each year and take a note of the balance at 31 December. Plus you'll run the risk of fines (thankfully much smaller now than in the past) if you get things wrong, which can be added stress.

So, what should I do with my ISA?

Obviously this will depend on your personal circumstances, including factors such as when you'll need to cash in the ISA and whether you'll move back to the UK in the future.

Here are some general points to consider:

  • There's little benefit in holding on to a Cash ISA as, once you're a Spanish tax resident, you'll have to declare and pay tax on the interest. This would be the same as having any savings account. 
  • If you decide to close your Stocks & Shares ISA, it's best to do it during the tax year before you move to Spain to avoid paying tax on the gains once you are a Spanish resident.
  • If you decide to keep your Stocks & Shares ISA, for simplicity, you could consider switching to accumulation funds (i.e. funds which don't pay out dividends and only grow in value). This would mean that there would be no income or realised gains to pay tax on while resident in Spain until you sell the investments (i.e. switch funds, make any withdrawals or close the ISA completely). While this won't solve the issue whilst you are in Spain (it will simply delay the taxes), it might be worth considering if you plan to return to the UK eventually.


  • ISAs are only tax-efficient in the UK and aren't recognised in Spain. This means you'll pay tax on the income and profit you make.
  • Depending on how many transactions there are, it may be a lot of work to calculate the income and profit each year in order to do your Spanish tax return as ISAs aren't set up to pay taxes on.
  • Furthermore, there's no benefit in holding on to a Cash ISA once you are a Spanish resident compared to opening a regular savings account. 
  • If you plan to stay in Spain forever, you may want to consider closing your Stocks & Shares ISA and taking the profits the year before your move.
  • If there's a chance you might return to the UK, you have the option to keep your ISA open but be aware you may need to include it on your Modelo 720 if it's above a certain value.  You'll be able to avoid paying any tax if you choose accumulation funds if you wait to cash them in until you go back. 

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About the Author Louise Carr

I'm a UK-Spain cross-border tax specialist. After qualifying at PwC in the UK, I moved to Spain and continued my studies. My work focuses on tax matters and advising expats.

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