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

A U.S. brokerage account after moving to Spain is usually worth keeping, and usually harder to use. The broker decides what you may still buy once you reside abroad. The IRS taxes a European fund bought as a replacement under rules far harsher than those for the U.S. fund it replaced. And Spain, which sees a U.S. account as an asset abroad, reports it on Modelo 720 and counts it for the wealth tax. The account is the same; three rulebooks now apply to it. This article is for informational purposes only and is not immigration, tax or medical advice; verify current requirements with the relevant Spanish authority or a licensed professional.

What changes when your broker learns you live in Spain?

Nothing in U.S. or Spanish law closes a brokerage account because its owner moved to Spain. What changes the account is the broker’s own policy for customers residing abroad, and those policies differ from one firm to the next.

Fidelity publishes its policy for investors who reside outside the United States in full. It does not open accounts for new customers residing abroad. For an existing customer who moves, discretionary management ends, representatives keep 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 are not liquidated. In some countries the restrictions go further: customers there may be limited 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. The summary does not say where Spain falls.

Schwab takes the opposite position 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, with the caveat that not all products and services are available in all countries. Its page on the EU PRIIPs regulation adds a European layer: 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 buy is not always what the same customer could buy from Ohio.

The moment to ask is before the address changes, and the question to ask is specific: what can this account, and any IRA at the same firm, do for a customer residing in Spain. Selling everything and starting again in Europe looks like the clean answer. It is 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 same portfolio now answers to three rulebooks. This is how the main holdings sort.

The first row is the one to protect. Everything in it stays inside rules that a U.S. preparer and a Spanish preparer each already know; the second row adds a regime that only one of them usually does.

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

The instructions for Form 8621, revised in December 2025, set two tests. 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. An investment fund exists to earn dividends, interest and gains, which is why the tests catch so many of them. Whether a particular fund is a PFIC is a question to settle before you buy it, with a preparer who files Form 8621, not after.

The paperwork is 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. The annual report part is waived only 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 spares a form; it does not change the tax.

The tax is where the cost lies. Without an election, the fund is taxed under section 1291. The 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 is treated as one. The amount is spread over every day you held the fund. The share that falls in the current year, or in years before the fund was a PFIC, is ordinary income; the share that falls 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 does not reduce the gain under these rules.

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

One exception matters for retirement savings. 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) is not treated as a shareholder of the PFIC. What happens to those accounts on the Spanish side is covered in the 401(k) and IRA guide.

What Spain taxes and reports on the account

Once you are a Spanish tax resident, the income from the account goes into the savings base. For 2025 the Agencia Tributaria’s state scale and regional scale for savings are identical and add up 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 are 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 adds its own rules on which country credits which tax, and that is where a preparer who files in both countries earns the fee; the same mechanics for withdrawals are worked through in the 401(k) and IRA guide.

Modelo 720 sees the account the IRS ignores

For Spain, the account is abroad. Securities, insurance and annuities deposited or managed outside Spain form one block of Modelo 720, reported when the block exceeds 50,000 euros, and the Agencia Tributaria’s answers on scope state that ETFs go under key I, the code for foreign collective investment institutions. Listed shares may be valued at their December 31 market price, and dollar amounts are converted 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. Exchange-rate moves count toward that growth, so a stronger dollar can bring the return back without a single trade. 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 are not reported 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, the rights are reported. The answer names neither the 401(k) nor the IRA. Whether an account you can withdraw from falls under the exception is a point for a Spanish adviser or a binding ruling from the Dirección General de Tributos, not for a guess.

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 are, according to the Agencia Tributaria, so a U.S. portfolio counts in full. A return is due in two cases, under its filing rules: when tax is payable after the exempt amount, 700,000 euros unless your region sets its own, and after deductions and rebates; or, even with nothing to pay, when 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 change 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. Check the rule of the region where you live on December 31, not the national default.

Two more points apply to 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. And above 3,000,000 euros of net wealth, a separate state solidarity tax applies, filed on Modelo 718. 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

The next action is a written question to the broker: what your account can and cannot do for a customer residing in Spain, and whether the answer differs for your IRA. Get the answer before you change the address, keep the U.S.-domiciled holdings where they are unless the answer forces a move, and do not 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 when the broker’s answer is sell only, when you already own European funds, when an IRA or a 401(k) is large enough for the Modelo 720 question to matter, or when your net wealth approaches 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.