Modelo 720 for British Residents in Spain

Costa Bridge provides practical relocation preparation and signposting, not legal or tax advice. Rules change — always confirm current requirements with official sources or qualified professionals before acting.

If you become tax resident in Spain and still hold money, investments or property in the UK, you will almost certainly meet modelo 720. It is the Spanish return for declaring assets held outside Spain. It is an information return, not a tax bill: filing it costs nothing in tax. But it is the form British movers most often miss, and until 2022 missing it could be ruinous.

This guide covers who has to file, the thresholds, the deadline, how the penalties work now, and the mistakes we see most often. It is general information, not tax advice. Your own position depends on your residence date, what you own and how it is held.

Who has to file modelo 720

Modelo 720 applies to people who are tax resident in Spain. Holding a TIE or a visa does not make you tax resident by itself; in most cases spending more than 183 days in Spain in a calendar year, or having your main economic interests here, does. Our guide to Spanish tax residency and the UK–Spain tax treaty explains the tests.

Non-residents who own a Spanish holiday home do not file it. Nor does anyone whose foreign assets stay under the thresholds below.

You may need to file even if the asset is not entirely yours. For bank accounts, the obligation covers account holders and also people with signing authority or who are beneficial owners. A joint account with your partner, or a parent's account you can sign on, can count. Ask your adviser how a jointly held asset counts towards your own threshold before you assume you are under it.

The three categories and the €50,000 thresholds

Assets are grouped into three separate categories. You only declare a category if the assets in it together are worth more than €50,000 at the end of the year. Each category is judged on its own, so €40,000 in UK bank accounts and €40,000 in UK shares means nothing to declare.

Category	What it covers	Value that counts
Accounts	Current, savings and deposit accounts with banks abroad, including cash ISAs	The higher of the balance on 31 December and the average balance over the last three months of the year
Securities, insurance and annuities	Shares, funds, bonds, stocks and shares ISAs, investment platforms, life insurance and annuities held abroad	Generally the market value on 31 December (surrender value for insurance)
Property	Houses, flats and land outside Spain, or rights over them	The purchase price, not today's market value

Convert sterling to euros using the exchange rate for 31 December. The euro value of a sterling balance changes with the exchange rate, so an account just under the line one year can cross it the next without you adding a penny.

Crypto held with an exchange or custodian outside Spain is reported on a separate form, modelo 721, with the same €50,000 threshold and the same filing window.

Later years: when you have to file again

Once you have filed, you do not repeat the full declaration every year. You file again for a category only if:

its total value has gone up by more than €20,000 since the last declaration, or
you have closed, sold or stopped holding something you declared before (you report the disposal, even if the category is now below €50,000).

Selling a UK rental property or closing a UK account you declared is the classic case. People assume there is nothing to report because they own less, but the disposal itself must be declared.

The deadline

Modelo 720 is filed between 1 January and 31 March of the year after the one being declared. If you become tax resident in 2026, your first modelo 720 covers your assets on 31 December 2026 and is due by 31 March 2027.

It is filed online only, using a digital certificate or Cl@ve. Most British residents have their gestor or asesor fiscal file it, alongside the annual income tax return (the renta, filed from April to 30 June).

Penalties since the 2022 EU court ruling

Modelo 720 became notorious because of its penalty regime. Missing or wrong data cost €5,000 per item of data, with a minimum of €10,000. Undeclared assets could be taxed as income with a 150% penalty, and there was effectively no time limit on the tax agency going back.

On 27 January 2022, the Court of Justice of the European Union ruled in case C-788/19 (Commission v Spain) that these rules were disproportionate and breached the free movement of capital. Spain responded with Ley 5/2022 of 9 March 2022, which removed the special penalties and the 150% surcharge.

Today a late or incorrect modelo 720 falls under the general penalty rules for information returns in articles 198 and 199 of Spain's General Tax Law. For a late return, that is generally a fixed €20 per item of data, with a minimum of €300 and a maximum of €20,000, halved if you file late before the tax agency contacts you. Separate amounts apply to incomplete or inaccurate returns, and each of the three categories is assessed separately.

The duty to file has not changed, and the tax agency can still treat unexplained foreign assets as undeclared income. The difference is that the normal time limits now apply, and you can show that you owned the asset before those years. Spain and the UK also exchange account information automatically under the OECD's Common Reporting Standard, so assume the tax agency already knows about your UK accounts.

Step by step: your first modelo 720

Pin down your residence date. Agree with your adviser which calendar year is your first as a Spanish tax resident.
List every asset outside Spain in the three categories, including accounts in joint names, accounts you can sign on, ISAs, investment platforms and UK property.
Collect the figures. For accounts, the 31 December balance and the October–December average (ask your UK bank for a statement showing both). For investments, the 31 December valuation. For property, the completion statement showing what you paid.
Note the identifying details the form asks for: bank name and address, account number or IBAN, the ISIN of each fund or share, and the property address and purchase date.
Check each category against €50,000 at the 31 December exchange rate.
File by 31 March, keep the receipt and the workings, and diary a check every January for the €20,000 rule and any disposals.

Common mistakes

Assuming ISAs do not count. An ISA is a UK tax wrapper; Spain does not recognise it. Cash ISAs count as accounts and stocks and shares ISAs as securities.
Forgetting UK property. A former home you now let out is the asset most often left off. Declare it at what you paid, not what it is worth.
Treating the €50,000 as a total across everything. It applies to each category separately.
Not filing when you sell. Closing or selling a declared asset triggers a filing the next year.
Assuming UK pensions are in or out without checking. Whether a UK pension pot has to be reported depends on the type of scheme and how the rights are held. Spanish tax rulings have not treated every UK pension the same way, so get a view from your adviser and keep it on file.
Confusing modelo 720 with wealth tax. They are different. Wealth tax depends on your region and your total net worth, and many residents never pay it, but the same asset list feeds both.
Leaving it until March. UK banks can take weeks to send historic statements.

When to get professional help

For a simple case (a couple of UK accounts and a house), a Spanish gestor can usually prepare modelo 720 with your renta. Bring in an asesor fiscal (tax adviser) with UK experience if you have investment platforms, trusts, company shares, UK pension pots you are unsure about, crypto, or a year you missed. If you have already missed a filing, get advice before you file late. Filing before the tax agency contacts you is what halves the penalty.

Our guide to when to hire a lawyer or gestor in Spain explains the difference between the two.

Key takeaways

Modelo 720 is an information return for Spanish tax residents. It does not create a tax bill by itself.
Three categories (accounts, securities and insurance, property), each with its own €50,000 threshold.
File between 1 January and 31 March for the previous year, then again only after a rise of more than €20,000 or a disposal.
Since Ley 5/2022 the penalties follow the general rules, but the duty to file is unchanged.
ISAs and UK rental property count. Get advice on UK pensions.

Sources and review date

Reviewed on 11 October 2026.

Modelo 720: Declaring Your UK Assets as a Spanish Tax Resident