Living in Spain with US (United States) Assets/Ties?
By Chris Burke
This article is published on: 13th October 2026
Since 2010, I have worked with Americans who have built their lives in Spain: US citizens, passport holders and green card holders, many with decades of savings in brokerage accounts, IRAs (Individual Retirement Accounts) and 401(k)s (employer-sponsored retirement plans, named after section 401(k) of the US Internal Revenue Code). The same pattern comes up in almost every first meeting. The portfolio is sound, but the structure around it was designed for someone living in Ohio or Texas, not Barcelona or Valencia.
If your investable assets are $1.3 million or more, that gap deserves attention. The problem is rarely performance. It is usually tax drag, compliance risk and an advisory relationship that no longer fits your circumstances.
The US Person’s Problem: Two Tax Systems, One Portfolio
As a US person, you remain subject to US tax on your worldwide income wherever you live. Once you are Spanish tax resident, Spain taxes you on your worldwide income as well.
The US-Spain tax treaty and the foreign tax credit system are designed to prevent genuine double taxation, but they do not remove the complexity. They simply mean every decision must be tested against both regimes.
Some of the most common issues I see:
- US custodians that cannot, or will not, serve you. Many US brokerages restrict or close accounts once a client’s address moves to Spain. Clients are then left with orphaned accounts or a patchwork of unsuitable alternatives.
- The wrong funds in the wrong place. Most European-domiciled funds and ETFs (Exchange-Traded Funds) are treated by the IRS (Internal Revenue Service, the US tax authority) as Passive Foreign Investment Companies (PFICs), with punitive tax treatment and onerous reporting on Form 8621. Many US persons in Spain hold exactly these products without realising.
- Mismatched gains. Spain calculates gains in euros and the US in dollars. Currency movements can create a taxable gain in one country and a loss, or nothing at all, in the other. Portfolio turnover that looks harmless on a US statement can produce unwelcome Spanish tax bills.
- Retirement accounts that Spain does not treat as the US does. IRAs, 401(k)s and Roth accounts (retirement accounts funded with after-tax money) each need individual analysis. Contribution, growth and withdrawal treatment can differ between the two countries, and getting the sequence of withdrawals wrong can be expensive.
Reporting: Where Good Portfolios Get into Trouble
Compliance is the area where the stakes are highest, because errors can attract penalties well beyond any investment loss.
As a US person resident in Spain, you may need to deal with some or all of the following:
- FBAR (Report of Foreign Bank and Financial Accounts; FinCEN 114, where FinCEN is the Financial Crimes Enforcement Network): required if the combined value of your non-US financial accounts exceeded $10,000 at any point in the year.
- FATCA (Foreign Account Tax Compliance Act) Form 8938: for US persons living abroad, reporting thresholds are higher than for those at home, but still easily exceeded at this level of wealth.
- Form 8621: for each PFIC (Passive Foreign Investment Company) holding, if you have any.
- Your annual US return (Form 1040) with foreign tax credit claims, alongside your Spanish return (Modelo 100).
- Modelo 720: Spain’s declaration of overseas assets above €50,000 per category. Your US accounts count as foreign assets from the Spanish perspective, so a US brokerage account or IRA can bring this obligation into play.
- Spanish Wealth Tax: depending on your region and the size of your estate, this can apply and needs to be considered with your reporting.
The two countries do not use the same forms, deadlines or definitions. A portfolio that is reportable in one place and invisible in the other is a common cause of problems. My role is to make sure your investments are structured so that reporting is straightforward, accurate and repeatable, working alongside your tax preparer rather than replacing them.
A Disciplined, Cross-Border-Aware Investment Approach
For clients at this level, I work with a US wealth manager whose process is built around long-term capital preservation and growth rather than short-term market activity. The philosophy behind the approach is one I find well suited to expatriate families:
• Goals first. The portfolio is designed around what the money has to do: fund your Spanish lifestyle, provide for your spouse, and pass wealth to the next generation. Benchmarks come second.
• Genuine diversification. Portfolios are spread across global markets, asset classes and strategies, with an emphasis on quality and resilience through varying market conditions.
• A long-term, patient mindset. The manager takes a multi-generational view of wealth, which suits clients who think in decades.
• Discretionary, professional management. Day-to-day decisions are made by an experienced investment team within an agreed framework, and you are not left to react to headlines.
• Tax-aware implementation. Holdings are selected and managed with the realities of dual US-Spanish taxation in mind, including fund selection, realisation of gains and currency effects.
• Clear, consistent reporting. You receive transparent statements that support your US and Spanish filings, so your accountant is not reconstructing figures each spring.
My own role is to sit between you, the investment team and your tax advisers. I deal with the Spanish side of the planning, coordinate the compliance workflow, and review your position regularly as your life, the markets and the legislation change.
Is This for You?
My approach is best suited to people who:
- are US citizens, passport holders or green card holders living in Spain,
- hold $1.3 million or more across investment accounts, IRAs and 401(k)s,
- want a single, coordinated strategy rather than a collection of accounts that do not speak to each other, and
- value careful compliance as highly as investment returns.
The First Step
I offer an initial, no-obligation conversation to review your current holdings, your reporting position and your objectives. In most cases I can tell you quickly whether your present arrangements are working well, and where they may be costing you more than you realise.
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You can arrange an initial consultation at a time convenient to you, and to explore your situation click HERE to view my diary.
If you would like any more information regarding any of the above, or to talk through your situation initially and receive expert, fact-based advice, don’t hesitate to get in touch with Chris.