The international portfolio bond in Spain is a traditional holding structure for investments such as collective investment schemes, unit trusts and funds. They are popular, in the main, due to the special tax treatment they attract (hence the common term `tax wrapper´). One has to be careful in Spain however as the authorities only give this preferential treatment to `Spanish Compliant Portfolio Bonds´. Why are they afforded these benefits? Well, the Spanish authorities like to encourage certain social behaviours. One of which is holding life assurance. The Spanish compliant bonds are provided by international insurance companies and written as unit linked, whole of life assurance contracts (similar to in the UK).
1) Capital gains referral. This means that as your portfolio grows in value no capital gains taxis taken each year - it is deferred to the time you start withdrawing. This means
that you get a gross roll up effect in the early years, adding value to the portfolio and realising a higher rate of compounding.
2) 'Proportional tax relief'. When you come to take withdrawals from your Spanish investment bond the tax authority in Spain will see part of your withdrawal as your original income. For example - You invest £500,000, after some years it grows to £750,000 (two thirds original capital, one third growth). You withdraw £100,000. Only one third of this taxable so only £33,333 subject to tax.
3) Available in different currencies including GBP, Euro and USD.
4) Can be written in joint names so that 100% of the policy passes, without tax liability (including IHT), immediately to the survivor therefore avoiding lengthy (and costly) Spanish probate.
5) You can assign beneficiaries such as your children.
6) If compliant, does not need reporting on the Modelo 720.
7) All you investment in one place with ease of access to valuations online.
8) Access to a wide range of EU regulated funds at institutional rates.
Through our relationships with these major offshore life companies we can access the best Spanish tax wrappers which in turn can hold a huge range of investment funds at rates unavailable to the individual investor in Spain. Taking into consideration your attitude to risk we undergo careful analysis of your personal requirements and subsequently offer independent advice on the asset allocation in your portfolio. Our solutions are designed to deliver tax efficient growth and/or income. Some of the key points to our services include; Non-discretionary Fund Advisor Services | Access to high quality discretionary fund management services | Professional advice on risk and asset allocation | Tax efficient wealth management planning | Access to Tax Compliant EU Investment Wrappers. Here are a list of my top three Spanish compliant bond providers. Please click on each for a full review and verdict!
Please contact us for further information by filling out the form below or calling me direct on +34 951 390 201
Patrick Macdonald ASCI
International Financial Adviser