Do ISAs, Roth accounts, TFSAs and trusts keep their tax benefits?

Key rules

• Foreign tax-free status: Spain generally does not recognise ISA, TFSA, Roth or trust status, so income inside them is taxed as yours.
• Savings tax: Income and gains are taxed every year, even if you withdraw nothing.
• Treaties: Pension-type accounts such as Roth, 401(k), IRA and RRSP may get deferral under a treaty, but withdrawals are generally taxed in Spain.
• Reporting: Foreign accounts and trusts must be reported on Modelo 720 if a category is over €50,000, however they are taxed abroad.

The short answer

Once you are a Spanish tax resident, assume your foreign tax shelter stops working for Spanish tax. Spain generally taxes the income and gains inside these accounts, even if your home country does not. Treaties can change this for some pension-type accounts, so check each account.

UK ISAs and Canadian TFSAs

Spain does not treat these as tax-free. You are taxed each year on what the account earns, as your own savings income, whether or not you withdraw anything.

• Interest and dividends are taxed in the year they arise.
• Gains are taxed when assets are sold inside the account.
• The savings scale applies. In 2025 it ran from 19% to 28%.

Spain's tax directorate has taken this line in several binding rulings, notably on ISAs and TFSAs. Expect to declare the income on your Spanish return even though the account never sends you a statement for it.

US Roth accounts, 401(k)s, IRAs and Canadian RRSPs

These get more help from tax treaties, but the result is less certain.

• Roth accounts and traditional US 401(k) and IRA plans get some treaty protection. The US-Spain treaty may allow deferral for pension-type accounts.
• Canadian RRSPs fall under the Canada-Spain treaty, which can allow tax on undistributed income to be deferred.
• Withdrawals are generally taxed in Spain.

Specialists differ on how far deferral goes. Get advice on each account before you assume it is protected.

Foreign trusts

Spain has no trust law of its own, so what you pay depends on your role and on how the trust is set up.

• You are the settlor of a revocable trust, or you keep control: you are taxed each year on the trust's income as if you had received it.
• You are a beneficiary of an irrevocable trust where the settlor has no control: you are taxed when you receive distributions or become entitled to them.
• Distributions are taxed by their nature, such as income or capital. They are not exempt just because a trust paid them.
• A gift or inheritance received through a trust may fall under Inheritance and Gift Tax.

Trust assets attributed to you also count for Wealth Tax and its return, Modelo 714. Spain has no separate trust return for a resident settlor, and Modelo 151 is not for trusts. Because the outcome turns on the trust's terms, have an adviser read the trust deed.

Reporting still applies

A tax-free label abroad does not excuse you from reporting. You must file Modelo 720 if the foreign assets in a category are worth over €50,000. This covers accounts and trusts where you are the holder, a beneficial owner, a settlor or a beneficiary.

The decision tool and the questions below help you find your own case.

Choosing between options

How will Spain treat your foreign tax-sheltered account or trust?

• UK ISA or Canadian TFSA: Spain does not recognise the tax-free status. Interest and dividends are taxed each year as your savings income, and gains are taxed when assets are sold inside the account.

• US Roth, 401(k), IRA or Canadian RRSP: A treaty may give some protection, such as deferral of tax on undistributed income. Withdrawals are generally taxed in Spain, so get advice on the specific account.

Assume Spain taxes the income inside the account or trust unless a treaty clearly says otherwise for your account type.

Frequently asked questions

Do I still report an ISA or Roth account if it is tax-free abroad?

Yes, you still report foreign accounts in Spain even if they are tax-free abroad. The account's tax-free status does not exempt it from the foreign assets report (Modelo 720) once a category is worth more than €50,000 on 31 December. The report is filed between 1 January and 31 March.

Is a foreign trust taxed differently if I am the settlor or a beneficiary?

Yes, the tax depends on your role and on whether the trust is revocable.

Do pension-type accounts like a 401(k), IRA or RRSP get better treatment?

Yes, they can get some protection under the US-Spain or Canada-Spain treaty, such as deferral of tax on undistributed income. Withdrawals are generally taxed in Spain. How far this goes depends on the account and treaty, so get advice on each account.