ISA's and Spanish Tax

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11 Mar 2007 00:00 by Roger Davis Star rating in Balsicas , COSTA C.... 93 posts Send private message

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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




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11 Mar 2007 18:57 by jhousden Star rating in High Halden, near As.... 3 posts Send private message

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.


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01 Feb 2008 19:38 by fpegman Star rating in San Miguel De Salina.... 442 posts Send private message

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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

 



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01 Feb 2008 23:30 by morerosado Star rating in Guardamar del Segura.... 6936 posts Send private message

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Fpegman

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

Moving abroad

 

You can only open an ISA if you are resident and ordinarily resident in the UK for tax

purposes. If you are unsure about this, call our Centre for Non-Residents on

0845 070 0040 (UK)

+44 151 210 2222 (from abroad) 

If you open an ISA and then move abroad, you are no longer classed as a UK resident.

So you cannot put money into the ISA.

You can still keep your ISA open and you will still be entitled to the tax benefits on

investments held in the ISA. If you become UK resident and ordinarily resident, you

can start putting money in again.





This message was last edited by morerosado on 2/1/2008.

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