Moving to Spain does not necessarily mean moving all of your finances there too. You may be living on the Costa del Sol while still having savings, investments, pensions or property in the UK. This is far from unusual.
According to Spain’s National Statistics Institute, 281,584 UK-born people were living in Spain at the beginning of 2025. For those who remain financially connected to the UK, two Spanish tax forms can cause particular confusion: Modelo 720, which reports certain assets and rights held outside Spain, and Modelo 100, the annual Spanish personal income tax return.
Depending on your circumstances, you may need to deal with both forms. Understanding what each one covers, when it needs to be filed and how overseas assets and income are treated is an important part of Spanish tax compliance for expats with financial interests outside Spain.
Are you tax resident in Spain?
Before looking at either form, you first need to establish whether you are tax resident in Spain. Having a British passport, receiving income from the UK or keeping a home there does not automatically keep you outside the Spanish tax system.
Under Spanish domestic rules, you will generally be considered tax resident if you spend more than 183 days in Spain during the calendar year, or if Spain is the main base or centre of your financial interests, either directly or indirectly. There is also a presumption of Spanish tax residency where you spouse (unless legally separated) and your dependent children live in Spain.
This means that the number of days you spend in Spain is important, but it is not the only factor that can determine your tax residence. Spending fewer than 183 days in Spain does not automatically mean that you are non-resident. Your economic and family ties to Spain, and where you work and spend your day-to-day life may also be relevant when determining your overall tax position.
If you are tax resident in Spain, you will generally be subject to Spanish tax on your worldwide income, subject to the relevant rules and double taxation agreement. This means that income from the UK may still need to be declared in Spain even if the money remains there.
If there is any uncertainty over when your Spanish tax residence began, it is worth establishing this first, as it affects which income, assets and reporting obligations may apply.
What is Modelo 720?
Modelo 720 is an information declaration for certain assets and rights held outside Spain. It is not a tax bill, and filing it does not automatically mean that you have extra tax to pay.
It mainly covers three categories:
- Overseas bank and financial accounts
- Investments and securities
- Overseas property and property rights
One of the main figures to be aware of is the €50,000 threshold. Broadly speaking, this applies to each category, although the way assets are valued can vary depending on what you own. This is where things can become a little confusing. The €50,000 threshold does not always apply to each asset individually. Assets within the same category may need to be considered together. For example, if you have £30,000 in one UK bank account and £25,000 in another, the combined value may be relevant when deciding whether you need to report them.
Joint ownership and the €50,000 threshold
Joint ownership does not automatically mean that you fall below the Modelo 720 reporting threshold. For example, if a couple jointly hold a UK bank account with a balance of €80,000 and each owns 50%, the account is not treated as being worth just €40,000 to each person when deciding whether the €50,000 reporting threshold has been exceeded. Subject to the other Modelo 720 rules and exemptions, the account may need to be reported, with each holder declaring the total balance and stating their percentage of ownership.
The same principle can apply to jointly owned overseas property. However, the position can vary depending on the circumstances, including how and when each share of the asset was acquired and its acquisition value. For this reason, jointly owned assets should be considered individually rather than simply dividing their total value between the owners, and in this instance, professional advice would be recommended to ascertain the position.
Cryptocurrency is treated separately. Certain virtual currencies held abroad may need to be reported under Modelo721 rather than Modelo 720, so crypto holdings should be looked at separately.
When Modelo 720 needs to be filed again
Modelo 720 is not necessarily an annual filing. If you have already submitted it and your circumstances have not changed in a significant way, you may not need to file again. A new declaration may be required if a previously reported category increases by more than €20,000, or if a reported asset is sold, transferred or closed.
If some time has passed since your last filing, it is worth checking with your legal or tax adviser to make sure nothing new needs to be reported.
What is Modelo 100?
Modelo 100 is the annual return used for Spanish personal income tax, or IRPF. If you are tax resident in Spain, it generally covers your worldwide income. This can include pensions, interest, dividends, investment gains, rental income and employment income from the UK or elsewhere.
That does not mean foreign income is automatically taxed twice. Spanish tax rules and the relevant double taxation agreement determine which country has the right to tax a particular type of income, or whether both countries may have taxing rights. Once this has been established, relief may be available for tax already paid in another country under the applicable rules. It is also important to note that relief for foreign tax paid can exist under domestic tax rules, even where no double taxation agreement applies.
For British expats, this is where the UK–Spain Double Taxation Convention becomes important. It sets out how taxing rights are allocated between the two countries for different types of income and helps determine how double taxation is dealt with where both countries are entitled to tax. It is also why financial arrangements that worked well in the UK may need reviewing once you become a Spanish tax resident.
How Modelo 720 and Modelo 100 work together
Modelo 720 and Modelo 100 deal with different things. Modelo 720 reports certain overseas assets, while Modelo 100 deals with the income and gains those assets may produce. For example, a UK bank account may be reported on Modelo 720, while the interest it earns may also need to appear on Modelo 100.
The same principle applies to investment portfolios, where dividends or realised gains can have separate Spanish tax consequences, and to UK rental property, where the property itself and the rental income are treated separately. However, pensions can be more complex, as their reporting and tax treatment depend on the type of pension and the relevant tax treaty. This is where retirement tax planning can be particularly important.
As Maggie Panet of PCC Legal explains:
“One of the most common misunderstandings is thinking that once an overseas asset has appeared on Modelo 720, the Spanish tax position has been dealt with. Reporting the asset and declaring the income or gains it produces are separate questions. We need to look at the full picture and make sure the different Spanish reporting obligations are consistent.”
Tax already paid in the UK
Paying tax in the UK does not necessarily remove the need to report that income in Spain. The UK–Spain Double Taxation Convention is designed to prevent the same income being taxed twice without appropriate relief, but the treatment depends on the type of income involved.
Rental income, pensions, employment income, interest and dividends can all be treated differently. The key is to establish whether the income must also be declared in Spain and whether credit or other relief is available for tax already paid in the UK.
What should an expat tax review cover?
If your finances are split between Spain and the UK, a tax review should check that the different parts of your position fit together correctly.
This may include:
- Your Spanish tax residence for the relevant year
- Overseas bank accounts, investments and property
- Ownership percentages and jointly held assets
- Previous Modelo 720 declarations
- Foreign income and gains reportable through Modelo 100
- UK and overseas pensions
- Tax already paid abroad and any available double taxation relief
- Wealth Tax or Solidarity Tax, where relevant
Modelo 720 and Modelo 100 filing dates
The two forms relate to different reporting periods and are filed at different times.
- Modelo 720 relates to overseas assets and rights for a particular calendar year and is generally filed between 1 January and 31 March of the following year. For example, the Modelo 720 for the 2025 reporting year was filed between 1 January and 31 March 2026. If you have a Modelo 720 reporting obligation relating to 2026, the filing would normally take place between January and March 2027 under the current rules.
- Modelo 100 is the annual Spanish personal income tax return. Income arising during one calendar year is declared during the following year’s Renta campaign. For example, the 2025 income tax return was filed online between 8 April and 30 June 2026. Income arising during 2026 will therefore be included in the 2026 Modelo 100 filed during the 2027 Renta period. The exact 2027 dates should be checked once they are published by the Spanish Tax Agency.
PCC Legal can review your position as a whole, from Spanish tax residence and overseas income to Modelo 720, Modelo 100, pensions, double taxation and longer-term tax planning.
If you are unsure whether everything has been reported correctly, or whether arrangements put in place before you moved to Spain are still appropriate, we can help you identify any areas that need attention.
FAQs
Do I need Modelo 720 if I have already filed Modelo 100?
Possibly. They are separate reporting obligations, so filing Modelo 100 does not automatically remove the need to file Modelo 720.
Does Modelo 720 mean I have to pay tax on my overseas assets?
No. Modelo 720 is an information declaration rather than a tax bill. However, income or gains connected with those assets may have separate Spanish tax consequences and may need to be declared under the relevant rules.
Do I need to file Modelo 720 every year?
If you are tax resident in Spain, UK income may need to be declared as part of your worldwide income, subject to the applicable Spanish rules. The UK–Spain Double Taxation Convention helps determine which country has taxing rights over different types of income and how double taxation is dealt with where both countries may tax the same income.
Does UK income have to be declared in Spain?
If you are tax resident in Spain, UK income may need to be declared as part of your worldwide income, subject to the applicable Spanish rules. The UK–Spain Double Taxation Convention helps determine which country has taxing rights over different types of income and how double taxation is dealt with where both countries may tax the same income.
What happens if I already paid tax in the UK?
You may still have a Spanish reporting obligation. The UK–Spain Double Taxation Convention determines which country has the right to tax different types of income, and relief may then be available for UK tax already paid under the applicable rules.
Was Modelo 720 abolished after the European Court ruling?
No. In 2022, the European Court of Justice ruled that some of the fines and penalties linked to Modelo 720 were disproportionate. Spain later changed those rules, but the obligation to report certain overseas assets through Modelo 720 remained in place.
