Form 720 and investment portfolios held abroad often cause errors for tax residents in Spain. Although a portfolio may look like a single investment account, for Form 720 purposes it is not reported as one asset, but security by security: shares, funds, bonds, ETFs and other assets held outside Spain.
What Form 720 is and who must file it?
Form 720 is an informative declaration (it is not a tax: nothing is paid with it, it only reports) of assets and rights located abroad. Individuals and legal entities with tax residence in Spain are required to file it.
The information is organised into three independent blocks, each with its own threshold of €50,000:
- Accounts held at financial institutions located abroad.
- Securities, rights, insurance and income deposited, managed or obtained abroad.
- Real estate and rights over real estate located abroad.
The fact that the thresholds are independent is important: each block is analysed separately. You may be required to declare one block and not another.
The filing period runs from 1 January to 31 March of the year following the year being declared. For assets held on 31 December 2025, the period closed on 31 March 2026.
Why a portfolio is not declared as a single position?
The natural instinct of the client is to reason as follows: “I have an investment account worth €80,000 at such-and-such broker”. Form 720 does not work that way.
The criterion of the Spanish Tax Agency is clear: where a global or custody account (the account through which the intermediary holds the client’s various securities on deposit) groups together different assets (shares, fund units, bonds, and so on) each of them must be reported individually, because each may form part of a separate declaration obligation.
In practice, this means that each security generates its own “record” in the declaration, with:
- the identification key of the security (share, units in a collective investment institution, fixed-income security, and so on);
- the identification of the security and of the institution (the usual reference is the ISIN code — International Securities Identification Number, the international code that uniquely identifies each security);
- the number of securities; and
- the valuation as at 31 December.
A few points worth keeping in mind:
- ETFs (Exchange Traded Funds: funds listed on an exchange that are bought and sold like a share) and listed funds, despite “looking like a fund”, are treated as securities for these purposes.
- Shares or units in collective investment institutions (investment funds, SICAVs, and so on) are declared at their net asset value as at 31 December.
It is therefore not acceptable to declare the portfolio as a single line for its total value. It must be broken down.
The cash in the portfolio does NOT go with the securities.
Another common source of error: the uninvested cash sitting in the broker account (the cash balance waiting to be reinvested) is not declared in the securities block, but in the accounts block, in accordance with the criterion of the Directorate-General for Taxation. That balance is added to the rest of your accounts abroad and is only declared if the accounts block as a whole exceeds €50,000.
The practical consequence is counterintuitive. Imagine a client with a foreign broker holding:
- €45,000 in securities, and
- €10,000 in uninvested cash.
Even though “the account” adds up to €55,000, there is no obligation to file Form 720: the securities block (€45,000) does not reach €50,000 and the accounts block (€10,000) does not either. Each block is measured separately.
Nominee accounts and beneficial ownership.
Many British platforms and brokers hold securities under a nominee account (a securities account in which the intermediary is the formal holder, holding the securities on behalf of the client). This does not remove the obligation to declare: the person required to file is the beneficial owner (the person who is economically entitled to the securities), even though the securities are formally held in the name of the intermediary.
With Form 720 and investment portfolios, it is not enough to report the total value of the portfolio. Each security must be reviewed individually and uninvested cash may fall into a different reporting block. This is why errors can arise even when the taxpayer knows the total value of the account.
“Wrapper” products (SIPP, ISA, investment bonds): the grey area.
Particular attention should be paid to wrapper products (structures that “wrap” an underlying portfolio of securities inside them), which are very common among residents of British origin:
- SIPP (Self-Invested Personal Pension: a personal pension in which the member chooses the underlying securities).
- ISA (Individual Savings Account: a savings or investment account with tax advantages in the United Kingdom).
- Investment bonds (life insurance products with an investment component).
Here there is no settled body of doctrine from the Directorate-General for Taxation covering every scenario, and the classification (whether to treat the product as a single right or to “look through” to the underlying securities) requires individual analysis of the legal nature of each product and of who holds the ownership. This is precisely the kind of question where we recommend not applying generic templates.
When you must file again: the issue of portfolio turnover.
Once Form 720 has been filed for the first time, in subsequent years you only declare a block again when one of the following applies:
- the combined value of the block has increased by more than €20,000 compared with the last declaration; or
- you have lost the status of holder of a previously declared asset (for example, you have sold a security in full or closed an account).
For active portfolios, this has an important implication. Where a security is sold and the proceeds are fully reinvested in other securities that are also reportable, it is enough to report the balances as at 31 December. But turnover of the portfolio (replacing some securities with others) and, above all, the complete loss of a position in a declared security may give rise to the obligation to file again even if the overall value of the portfolio has not grown by more than €20,000. In frequently traded portfolios, it is advisable to review each year whether either of these thresholds has been crossed.
At Temple Cambria we regularly advise residents of British, German, Dutch and other nationalities on the preparation of Form 720 and on the treatment of investment portfolios, foreign brokers and wrapper products such as SIPPs. If you hold a portfolio outside Spain and have doubts about your obligation to declare, we can review your case on an individual basis.
ÁLVARO MORALES SOUSA
PARTNER – LAWYER
CUSTOMS REPRESENTATIVE
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