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Benefits Of A Spanish Compliant Investment Bond As A British Expat


One of the major goals of every investor is to find ways to reduce costs and enhance the growth of their investments. Different kinds of investments have different rules that apply to them and influence their growth and profitability. To make the right choices, you need to have a good understanding of how these investments work and the best ways to maximize them.



Written exclusively for Expat Network by Jason Swann of Holborn Assets


If you’re a British expat and you’re a Spanish tax resident, you can leverage the many benefits that Spanish Compliant Investment Bond provides for you. Let’s consider some of these advantages and how you can benefit from them.


What is a Spanish Compliant Investment Bond?

Spanish Compliant Investment Bonds are unit-linked life insurance policies that are tax-efficient. They are sometimes known as the “Spanish ISAs” and are widely known for their tax benefits.

To qualify as Spanish Tax Complaint, an investment bond must meet certain criteria such as an initial investment of €25,000, a medium to long-term investment design, element of risk, etc.


Advantages of Spanish Compliant Investment Bond

Tax Deferral

As a British expatriate, having a Spanish compliant investment bond exempts you from annual taxation on your investment growth. Any growth you make from your compliant policy per year is tax-free; your income on the investment only becomes taxable when you make withdrawals.

This tax deferral until withdrawal, increases your gross investment value and in turn, gives you a higher rate for compound interest. On the contrary, if you hold a non-Spanish compliant investment bond, you will be required to pay tax on the growth of your investment bond each year.

Let’s assume you have an investment bond worth €100,000, and it grows by an additional €10,000 by the end of the year. The growth of €10,000 is considered a taxable income. So, assuming the annual tax rate is 10%, you will have to pay a tax of €1,000.


Withdrawal Tax Relief

Spanish tax authorities consider part of your withdrawals on your compliant investment bond as your original income. For instance, say you invest €1,000,000 and it grows to €2,000,000 after some time. This means an additional one-third of the original capital.

When you withdraw money from this investment, only one-third of the amount is taxable. In this case, you’ll pay tax on only €100,000 if you withdraw €200,000.


Exemption From Modelo 720

Taxation authorities require Spanish tax residents who own investments outside the country to declare them on the Modelo 720, and such investments are taxable. However, your Spanish compliant investment bonds are exempted from this list of taxable investments.

Easy Policy Transfer Using Joint Names

You can write Spanish Compliant investment policies with joint names so that it becomes possible to pass 100% of the policy to the other party without tax liability. This is a good way to avoid long and expensive probates by Spanish authorities.



Tax efficient investments are a good way to reduce unnecessary costs, and that is one of many benefits Spanish Compliant investment bonds offer you, as a British expat. You should contact a highly qualified and regulated investment adviser to help you find compliant investments to enjoy these benefits.



Holborn Assets are a global, award-winning financial services provider, who specialise working with international clients in over 100 different countries.    Quality financial advice often comes at a cost but Holborn Assets are offering a free financial review with up to two hours professional consultation, for free!

Take advantage of this offer and the expertise of Holborn Assets, by clicking here www.holbornassets.com/the-expat-network/ to claim a free review.