ISA's and Spanish Tax

Does anyone know if Spanish Income Tax is payable by people taking up residence in Spain , on the Tax-Free Interest they receive from their ISA's.??

Regards,

Roger and Fran

The ISA's tax exemption is given by UK tax legislation. In Spain you cannot expect an exemption under UK tax law to apply, so the interest will be taxable.

However, ISAs tend to pay good rates of interest because they are 'sticky' money from the banks' viewpoint. I'd suggest transferring to a new cash ISA just before you go to Spain (Halifax are paying 6% for 4 years fixed). That way you crystallise the tax free interest while you are still UK resident, start with a clean slate in Spain and still have an ISA with its UK tax benefits if you return to the UK at a later date.

I would check with your ISA provider as I believe that you need to be a UK resident with UK address to continue holding ISA

Fpegman

Fpegman

Taken from this pdf file http://www.hmrc.gov.uk/leaflets/isa-factsheet.pdf