Your U.S. Brokerage Account After Moving to Spain: What Changes

Should you keep your U.S. brokerage account after moving to Spain? Usually, yes. Using it gets harder, though. Once you reside abroad, the broker decides what you may still buy. A European fund bought as a replacement falls under IRS rules far harsher than those for the U.S. fund it replaced. And Spain treats a U.S. account as an asset abroad, so it reports it on Modelo 720 and counts it for the wealth tax. Same account, three rulebooks. This article is for informational purposes only and is not tax or legal advice; verify current requirements with the relevant Spanish authority or a licensed professional.

What changes when your broker learns you live in Spain?

Not the law. Nothing in U.S. or Spanish law closes a brokerage account because its owner moved to Spain. The broker’s own policy for customers residing abroad is what changes the account, and those policies vary from firm to firm.

Fidelity publishes a summary of its policy for investors who reside outside the United States. New customers residing abroad can’t open accounts. For an existing customer who moves, discretionary management ends, representatives stick to administrative help, and mutual fund purchases have been blocked since August 1, 2014. Dividends and capital gains can still be reinvested, and existing fund holdings aren’t liquidated. Some countries get tighter limits: customers there may be restricted to selling their holdings and withdrawing the proceeds, with no deposits and no new purchases. Elsewhere the limits are lighter, such as no margin lending or no options. Where does Spain fall? The summary doesn’t say.

Schwab goes the other way, with a dedicated service for U.S. citizens living abroad: U.S. stocks, bonds and ETFs, dollar accounts, and Form 1099 reporting for the IRS. The caveat is that not all products and services are available in all countries. Its page on the EU PRIIPs regulation adds a European layer for options, futures and futures options. The rules on key information documents apply to its customers located in the European Economic Area and the United Kingdom, not to its customers in the United States. Spain is in the EEA. So what a customer in Valencia can trade there isn’t always what the same customer could trade from Ohio.

Ask before the address changes, and make the question specific: what can this account, and any IRA at the same firm, do for a customer residing in Spain? Selling everything and starting over in Europe looks like the clean answer. It’s the expensive one, for the reasons below. And a sale made after you become a Spanish tax resident is also income in Spain.

What each holding becomes once you are a Spanish resident

The portfolio hasn’t moved, but it now answers to three rulebooks. Here’s how the main holdings sort.

Row one is the one I’d protect. Everything in it stays inside rules a U.S. preparer and a Spanish preparer each already know. Row two adds a regime that usually only one of them does.

Why a European fund is the expensive fix: PFIC and Form 8621

Two tests decide it, set out in the instructions for Form 8621, revised in December 2025. A foreign corporation is a passive foreign investment company if 75 percent or more of its gross income for the year is passive, or if at least 50 percent of its assets produce passive income or are held to produce it. Investment funds exist to earn dividends, interest and gains. No wonder the tests catch so many of them. Is a particular fund a PFIC? Settle that before you buy, with a preparer who files Form 8621, not after.

The paperwork comes per fund. A U.S. person who holds a PFIC files a separate Form 8621 for each one, in any year in which a distribution arrives, a gain is recognized on a sale, an election is made or reported, or the annual report is required. That annual report part is waived when all your PFIC holdings together are worth $25,000 or less on the last day of the year ($50,000 on a joint return), and you received no excess distribution from that fund and recognized no gain on selling it. The waiver saves you a form. It doesn’t touch the tax.

The tax is where the real cost sits. Without an election, the fund is taxed under section 1291. Any part of a year’s distributions above 125 percent of the average of the three previous years is an excess distribution, and the whole gain on a sale counts as one. That amount gets spread over every day you held the fund. The share landing in the current year, or in years before the fund was a PFIC, is ordinary income. The share landing in earlier PFIC years is taxed at the highest rate in force for each of those years, 37 percent for 2018 to 2025, plus interest from each year’s due date. A loss on the sale doesn’t reduce the gain under these rules.

Two elections soften this, and each has a price. A qualified electing fund election taxes your share of the fund’s ordinary earnings and net capital gain every year, paid out or not, and it only works if the fund sends a PFIC annual information statement. A mark-to-market election, open to stock that is regularly traded on a qualifying exchange, taxes each year’s rise in value as ordinary income. Either way, a European fund becomes an annual tax computation in two currencies.

Retirement savings get one exception. The instructions state that a U.S. person who owns PFIC stock through an individual retirement account or a plan described in section 401(a) isn’t treated as a shareholder of the PFIC. For what happens to those accounts on the Spanish side, see the 401(k) and IRA guide.

What Spain taxes and reports on the account

As a Spanish tax resident, you put the account’s income in the savings base. The scales below leave out the Basque provinces and Navarra, which set their own. For 2025, the Agencia Tributaria’s state scale and regional scale for savings are identical. Together they come to 19 percent on the first 6,000 euros, 21 percent up to 50,000 euros, 23 percent up to 200,000 euros, 27 percent up to 300,000 euros and 30 percent above.

The United States keeps taxing the same dividends and gains, because you’re a citizen. Spain allows a deduction for tax paid abroad, capped at the lower of that tax and the Spanish tax on the same income at your average effective rate. For a U.S. citizen, the treaty layers on its own rules about which country credits which tax. That’s where a preparer who files in both countries earns the fee. The 401(k) and IRA guide works through the same mechanics for withdrawals.

Modelo 720 sees the account the IRS ignores

To Spain, the account is abroad, unless you are taxed under the article 93 special regime for workers who move to Spain, whose taxpayers do not file Modelo 720. Otherwise, securities, insurance and annuities deposited or managed outside Spain form one block of Modelo 720, reported once the block exceeds 50,000 euros. The Agencia Tributaria’s answers on scope put ETFs under key I, the code for foreign collective investment institutions. Listed shares may be valued at their fourth-quarter average or their December 31 market price, and dollar amounts convert at the December 31 exchange rate, according to the valuation answers.

After the first return, you file again only when the block grows by more than 20,000 euros over the value that triggered the last one, or when something reported before is sold, under the frequency rules. Currency moves count toward that growth, so a stronger dollar can bring the return back without a single trade. The form doesn’t care that you sat still. The filing window runs from January 1 to March 31 of the following year.

The same scope answers settle part of the retirement question. Rights in a pension plan abroad stay off the return until a contingency the plan covers occurs, such as retirement, unless the plan lets the member surrender it on terms like a life insurance policy. Once a contingency occurs, they’re reported. The Dirección General de Tributos applied that exception in binding ruling V1291-22 of June 7, 2022: a traditional IRA and a Roth IRA, which allow withdrawals at any time, are reported whether or not a contingency has occurred. That ruling covers IRAs, not the 401(k). The Modelo 720 guide sets out the blocks, the deadline and the fines.

Wealth tax: when the portfolio crosses the line

Spain’s wealth tax, the Impuesto sobre el Patrimonio, applies to residents on their net wealth wherever the assets sit, according to the Agencia Tributaria. A U.S. portfolio counts in full. Under its filing rules, you owe a return in two cases. One: tax is payable after the exempt amount, 700,000 euros unless your region sets its own, and after deductions and rebates. Two: even with nothing to pay, the gross value of your assets exceeds 2,000,000 euros, counting exempt assets and ignoring debts. Your main home is exempt up to 300,000 euros.

Regions move the numbers. The Agència Tributària de Catalunya, for example, applies an exempt amount of 500,000 euros, and it set the filing window for 2025 from April 8 to June 30, 2026. Go by the rule of the region where you are resident for income tax purposes on December 31 (generally where you spend the most days), not the national default. The Basque provinces and Navarra run their own wealth tax.

Two more points matter for Americans. Someone taxed under the special regime for workers who move to Spain, article 93 of the income tax law, pays wealth tax only on assets located in Spain, as the Agencia Tributaria’s manual explains. Who can opt into that regime is covered in the Beckham law guide. Then there’s the top end: a separate state solidarity tax is defined on net wealth above 3,000,000 euros, but under article 3 of Ley 38/2022 the base is first cut by 700,000 euros and the first 3,000,000 euros of what remains is taxed at zero, so a quota arises only above 3,700,000 euros of net wealth. It is filed on Modelo 718, and only when a quota is payable. An order published on June 29, 2026 governs the return for 2025, whose filing period opened on July 1, 2026, so the tax is still in force.

Before you update the address on your brokerage account

Your next move is a written question to the broker: what can your account do, and not do, for a customer residing in Spain, and is the answer different for your IRA? Get it before you change the address. My pick is to keep the U.S.-domiciled holdings where they are unless the answer forces a move. And don’t buy a European fund to replace them without a Form 8621 plan.

A portfolio of U.S. stocks and U.S. ETFs, at a broker that keeps serving you, is something most people can handle alone. The savings scale, Modelo 720 and the FBAR for your Spanish accounts are forms, not strategy. A professional who files in both countries is worth paying in four cases: the broker’s answer is sell only, you already own European funds, an IRA or a 401(k) is large enough for the Modelo 720 question to matter, or your net wealth nears the wealth tax lines. The account steps that come before this one are in how to prepare your U.S. finances before moving to Spain.

Where the portfolio decision sits in the move, after the broker’s written answer and before your first Modelo 720, is laid out in the Spain Navigator, the app that puts every step of your move to Spain in order, from visa to settling in.