# Draw down of ISA funds whilst resident in Spain



## Woodster123 (May 29, 2019)

Please can anyone confirm that this is the current situation:
I aim to be resident in Spain whilst drawing down a monthly income from the body of my ISA. I understand that any gains / interest will no longer be tax free and will be subject to taxation in Spain. The funds drawn down will not count towards annual income as it is money that i have already paid tax on in the UK prior to investing, in short there is no difference in drawing down from an ISA to withdrawing from a bank account.
I also understand that the total value of the ISA must be declared to Spanish authorities which then may be liable to Spanish wealth taxation.
Thanks very much-not so much of question just seeking confirmation i have got the general situation clear.


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## nigele2 (Dec 25, 2009)

Woodster123 said:


> Please can anyone confirm that this is the current situation:
> I aim to be resident in Spain whilst drawing down a monthly income from the body of my ISA. I understand that any gains / interest will no longer be tax free and will be subject to taxation in Spain. The funds drawn down will not count towards annual income as it is money that i have already paid tax on in the UK prior to investing, in short there is no difference in drawing down from an ISA to withdrawing from a bank account.
> I also understand that the total value of the ISA must be declared to Spanish authorities which then may be liable to Spanish wealth taxation.
> Thanks very much-not so much of question just seeking confirmation i have got the general situation clear.


I am not an IFA or have any special knowledge in this field. Please talk to professionals.

But:

Delay being taxable this calendar year. From your questions I believe you need more planning time.
If you're old enough enquire about your ISA's being put in a SIPP. This may not be possible for various reasons but there are huge advantages if you are not yet resident and can buy yourself some time.
Assume the worst
Remember Spain moves so slowly at times you might think it is dead 

But all the best.


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## Williams2 (Sep 15, 2013)

Woodster123 said:


> Please can anyone confirm that this is the current situation:
> I aim to be resident in Spain whilst drawing down a monthly income from the body of my ISA. I understand that any gains / interest will no longer be tax free and will be subject to taxation in Spain. The funds drawn down will not count towards annual income as it is money that i have already paid tax on in the UK prior to investing, in short there is no difference in drawing down from an ISA to withdrawing from a bank account.
> I also understand that the total value of the ISA must be declared to Spanish authorities which then may be liable to *Spanish wealth taxation*.
> Thanks very much-not so much of question just seeking confirmation i have got the general situation clear.


As for Spanish wealth tax, this is liable if your entire individual estate exceeds 700,000 Euros and is
worked out at an annual charge ( I believe ) of 2 percent of the excess.
This being the value of your estate ( property, bank accounts, savings, etc ) on the 31st December
each year. Declared between April & June and payable in July.


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## Turtles (Jan 9, 2011)

Treat your gains and losses differently. Take any capital gains while still a UK tax payer, so there is no tax to pay. Then repurchase similar investments to give you a higher base for when you get to Spain.
Hang on to any investments that are showing losses, as they are no good to you in the UK, but will cancel out any CGT liability if you sell them while resident in Spain.


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## Woodster123 (May 29, 2019)

Thank you for the responses, the draw down of the main body of the ISA-does this count towards any personal allowance or is just like withdrawing from a bank account.


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## Turtles (Jan 9, 2011)

In the UK taking money out of an ISA has no tax consequences. In Spain it would count as a CGT event, for which there is no allowance, but you can offset gains against losses incurred in the last 4 tax years. By the way, if following the advice in my previous post, you should keep reinvested funds within the ISA wrapper in case you later decide to return to the UK. Once the money is outside an ISA it's taxable in either country.


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## Williams2 (Sep 15, 2013)

You might laugh about this but ( as far as I'm aware ) the most popular way of offseting your annual 
tax bill, is if you pay into a private pension out of your own pocket in Spain.
Others are ( for example ) offsetting your gains with your losses, if your into Self Select Share 
dealing as an investment.

Depending on how old you are - those nearing retirement might not be keen on the idea of
starting a new Pension - although saying that the Spanish tax office will also take into account
any contributions you continue to make into your existing British private pensions.


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## amespana (Nov 10, 2009)

As a Spanish resident if I were to sell an isa what tax if any would I be liable to pay?tia.


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## Turtles (Jan 9, 2011)

You don't actually sell an ISA, just the investments therein. Assuming we are talking about shares or some kind of fund, you would pay Spanish capital gains tax (if there is a gain). This is around 20%, depending on the level of gain.


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## amespana (Nov 10, 2009)

What if it is a long held cash isa,cashed in and transferred into a Uk current account?tia


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## Turtles (Jan 9, 2011)

You only pay tax on interest payments, so you will have to declare these in Spain.


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## snikpoh (Nov 19, 2007)

Turtles said:


> You only pay tax on interest payments, so you will have to declare these in Spain.


.... and of course, don't forget wealth tax.


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