What happens to a foreign retirement account once you're resident

Key rules

• Pensions: Under most of Spain's treaties, including those with the UK, the US, Germany and the Netherlands, private and workplace pensions are taxed by the country where you live, so Spain once you are resident.
• Foreign wrappers: Spain does not recognise tax-free features of ISAs, Roth accounts, TFSAs or trusts, so income and gains inside them are generally taxed each year.
• Cash payouts: Cash paid out to you from a foreign scheme is taxed as income in Spain.
• Direct transfers: A direct scheme-to-scheme transfer that never reaches you is generally not taxed in Spain.

The short version

Spain ignores the special tax treatment a foreign account had at home. It looks at what comes out of the account and taxes that. Account-specific guides follow this page. This one gives the general pattern.

Pensions: usually taxed in Spain

For most private and workplace pensions, the country where you live taxes the income. Under most of Spain's treaties, including those with the UK, the US, Germany and the Netherlands, that is Spain once you are resident. Some individual treaties let the paying country tax too. Pensions paid for government service are generally taxed by the country that pays them. Check the treaty for your country before assuming either way.

Tax-free wrappers: the label does not travel

Spain does not recognise the tax-exempt features of UK ISAs, US Roth accounts, Canadian TFSAs or foreign trusts. As a Spanish resident, you are generally taxed every year on the income and gains inside them as savings income, even if you take nothing out. Treaties usually do not change this unless they contain a specific clause for that account.

Trusts follow separate attribution rules. They also need reporting on Modelo 720 and other forms.

Lump sums and cash withdrawals

Do not assume a tax-free lump sum at home is tax-free in Spain. Cash paid out to you is taxed as income in Spain. The quick answers below cover the common lump-sum question.

Moving money between schemes

A transfer between foreign pension schemes is generally not taxed in Spain if the money moves directly between the schemes and never reaches you. Foreign funds can enter a Spanish pension plan only in limited cases, typically from schemes that are equivalent under EU law. Contributions into a Spanish plan may be subject to annual limits. Get advice before you move anything.

What to do now

1. List every foreign retirement account, with its type and country.
2. Work out how each one pays out: pension income, lump sum, or untouched growth.
3. Check the treaty between Spain and the country where the account sits.
4. Read the guide for your specific account, and ask a Spanish tax adviser before any withdrawal or transfer.

Quick answers on pensions and tax in Spain

Is the UK 25% tax-free lump sum tax-free in Spain?

No, the UK 25% tax-free lump sum is not exempt in Spain once you are resident. Spain taxes the whole sum as work income, and the 40% reduction is generally refused for UK schemes. Ask a Spanish tax adviser before you take it.

Can I keep paying into a Spanish pension plan after I retire?

Yes, you can keep contributing after retirement, but you only get the tax reduction if you still have work or business income. The reduction is capped at 30% of net work income, and the 1,500 euros limit still applies. Once you have drawn the benefit in full, you can only contribute for death or dependency.

Is my pension taxed as salary or as savings income?

Your pension is taxed like salary, not like savings income. It goes in the general base at progressive rates. The main exception is a lifetime annuity (renta vitalicia) bought with your own money, which counts as capital income and is taxed on a reduced portion at savings rates.