Spanish Compliant Bond for Expats
Discover EFPG’s Spanish Compliant Bond – a tax-efficient savings solution tailored for expats in Spain. Protect your wealth, receive regular income, and simplify tax reporting.
Spanish Compliant Bond – Tax-Efficient Wealth Protection for Expats in Spain
If you have settled in Spain for your retirement and are concerned about how to invest appropriately, receive regular income, protect your cash from the effects of inflation and the relatively small danger of a bank collapse, a Spanish compliant bond may be the right solution for you.
The Hacienda has agreed a favourable tax regime for certain savings & investment plans held by Spanish Tax Residents. The advantages of such plans are cemented by the distinctly unfavourable tax regime for non-compliant plans. See the scenario below that compares the tax regimes for 2 Spanish Tax Residents; the first has invested €200,000 in a compliant overseas bond, and the second has invested in a non-compliant overseas bond.
EFPG has a partnership with a household UK insurance company that provides a Spanish Compliant Bond with a suite of investments available that suit a wide range of needs to match your goals and plans.
Spanish Compliant Bond vs Non-Compliant Investment
See how a €200,000 investment grows with a Spanish Compliant Bond, paying minimal tax, compared to a non-compliant option that incurs significant annual taxes and lowers your returns.
Compliant Bond
€200,000 After 1 Year
- Add 10% investment gains: €220,000
- Tax charge (no income taken): €0.00
- Tax charge if withdraw €20,000: €345.45
- Total tax payable: €345.45
- End value: €199,654.55
Non-Compliant Investment
€200,000 After 1 Year
- Add 10% investment gains: €220,000
- Tax charge (no income taken): €4,080
- Tax charge if withdrawing €20,000
- Total tax payable: €4,080
- End value: €195,920
Secure Your Wealth with a Spanish Compliant Bond
At EFPG, we specialise in helping expats living in Spain get insurance that fits their lives and gives peace of mind. As an independent broker, we work with Spain’s top insurers to offer policies in English, with terms you’ll understand.
There is some additional information about the complaint bond.
- Funds held do not need to be declared on the Modelo 720 – the form that needs to be completed by all Spanish Residents with assets worth over €50,000 held overseas.
- Any tax due is paid by the Bond so you do not need to pay it yourself or pay someone to do it on your behalf.
- They are inheritance tax efficient (We would recommend that you seek regulated tax-advice regarding this.)
- If you do decide to live somewhere else, the bond can “move with you” to suit where you relocate to.
Frequently Asked Questions
What is a Spanish Compliant Bond for Expats?
It’s a tax-efficient investment wrapped in a life assurance policy, designed to meet Spanish tax laws specifically for expats, combining growth potential with tax advantages.
How does a Spanish Compliant Bond help expats save taxes?
The bond allows tax deferral on investment gains until withdrawals, avoiding annual tax on growth, plus gains are taxed only upon withdrawal at savings income rates.
Who can benefit from a Spanish Compliant Bond for Expats?
Primarily UK expats, retirees, and high-net-worth individuals living in Spain who need legal compliance alongside efficient tax planning and wealth protection.
Can I withdraw income regularly from a Spanish Compliant Bond?
Yes, you can take regular income or lump sum withdrawals. Only the gain portion of what you withdraw is taxable, not your original capital.
Is a Spanish Compliant Bond inheritance tax efficient?
Yes, when structured properly, these bonds provide succession planning benefits, avoid Spanish probate, and can pass wealth tax-efficiently to beneficiaries.
What is the minimum investment for a Spanish Compliant Bond?
Typically, starting investments are around €100,000 or equivalent, with flexibility depending on provider terms.
Do I need to declare the bond in Modelo 720?
No, funds held in a Spanish Compliant Bond don’t require declaration in the Modelo 720 tax form, simplifying your tax reporting obligations.
Can the Spanish Compliant Bond move if I relocate from Spain?
Yes, the bond can “move with you,” meaning if you change residence internationally, your investment remains compliant and managed accordingly.
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