Modelo 720 or modelo 721: which one applies, and why it may be both

It is not an «or», and that is the opening error

The question nearly always arrives the same way: I have things abroad and I have crypto, which one do I file? The answer is that these are two distinct reporting obligations whose thresholds are not added together, and that in an international portfolio it is entirely normal to end up filing both, or neither, or only one, without either fact having anything to do with the other.

Modelo 720 reports three blocks of assets and rights located outside Spain: accounts with financial institutions; securities, rights, insurance policies and annuities deposited or managed abroad; and real property and rights over real property. Modelo 721 reports virtual currencies located abroad held by a third party providing key-custody services.

The thresholds, one by one

	Modelo 720	Modelo 721
What it reports	Accounts, securities and insurance, property abroad	Virtual currencies abroad held in custody by a third party
Threshold	50,000 € for each of the three blocks	50,000 € of balance at 31 December
Added together	No. They are separate obligations and each threshold is looked at on its own
Filing window	1 January to 31 March of the following year	1 January to 31 March of the following year
Repeating it	Only if a block rises by more than 20,000 € over the last figure declared, or if something is cancelled or disposed of	Same 20,000 € increase rule

An example makes it clearer than the rule does. With 40,000 € in a French bank account and 45,000 € of cryptocurrency on a foreign exchange, nothing has to be filed: neither block reaches 50,000 €, and they are not added to each other. With 30,000 € in accounts abroad, 30,000 € with a foreign broker and a 30,000 € flat in Portugal, again nothing: three blocks of 30,000 € do not make 90,000 €, they make three blocks of 30,000 €. And with 55,000 € in crypto alone, there is a 721 and there is no 720.

The foreign exchange, which is where it gets tangled

Virtual currency held in custody by a platform based outside Spain falls into the 721. That much is clear. The nuances come afterwards:

• Self-custody. If the keys are yours and no third party holds anything, the administrative view is that there is no 721 obligation, because the custodian the rule describes is missing. That does not release you from taxing gains in your income tax return or from including the balance in wealth tax, which are different things entirely.
• The fiat balance on the exchange. Many platforms hold balances in conventional currency. If that balance sits in an account opened with a foreign financial institution, it may fall inside the accounts block of the 720. It is arguable depending on how each platform is structured, and that is how we treat it: an open question to be looked at platform by platform, not a single answer.
• Derivatives and structured products over crypto contracted through a foreign intermediary look more like securities than like virtual currency, and the fit is not always obvious.

The 20,000 € increase rule

This is the rule that brings the most relief and is understood the worst. Once a declaration has been filed, it does not have to be repeated every year: it only has to be filed again when one of the blocks has risen by more than 20,000 € against the last declaration filed for that block. Block against block, not total against total.

And it always has to be filed again, whatever the amounts, when you have ceased to be the holder, representative or beneficiary of something previously declared: a closed account or securities that have been sold are reported in the return for the year in which that happened, even if nothing went up.

A word for people who have just moved here

Both obligations attach to Spanish tax residents, so the first year is the one that matters. If you arrived mid-year and became resident, the assets you held on 31 December are the ones in scope, and the window closes on 31 March. Anyone on the inbound regime of article 93 is outside the 720 while the regime lasts, which is one of its quieter advantages: Beckham or the ordinary regime.

The case that fits neither column

The person who owns nothing and is obliged all the same. It is the most frequent source of shocks, because the obligation does not stop at owners: it reaches anyone recorded as a representative, authorised signatory or beneficiary, and anyone with power of disposal over the assets. Three situations we see every year:

• The signatory on an elderly parent's account abroad. It is not your money, you have never touched it and it forms no part of your estate — but being an authorised signatory counts towards the threshold for that block.
• The joint account. Where there are several holders, each one reports the whole balance, not the share that would fall to them. A couple with 60,000 € between them do not have two blocks of 30,000 € sitting under the threshold: they have two returns for 60,000 €.
• The director of a foreign company who has signing authority on the company's accounts, which sometimes falls inside and sometimes outside depending on how the ownership is arranged. Worth checking before the power is signed rather than when the letter arrives.

There is also a family of assets that lands cleanly in no box at all, and it is better treated as what it is: contested ground. Foreign pension arrangements of the American 401(k) or British pension scheme kind, where the answer turns a great deal on whether there is a vested right that can be drawn, and is not the same across every product. Share options not yet exercised, which are not securities in the ordinary sense. Life policies with a surrender value linked to a basket of funds, which have a sub-category of their own inside the securities block and are reported at their surrender value on 31 December. And investment accounts that mix currency, securities and virtual currency on a single platform, where one balance can end up split between two different forms.

What to look at before deciding

Whether to file or not is settled with the inventory in front of you, and the inventory needs very specific pieces. This is what we ask for in a first email:

• A statement for each account at 31 December and the average balance for the last quarter, with the account identifier, the institution, its address and the date the account was opened.
• The position of each portfolio at 31 December, line by line, with the number of units and their valuation — not only the account total.
• The deed for each property, with its date and acquisition value, and each owner's percentage.
• The capacity in which you appear on every asset: holder, beneficial owner, representative, authorised signatory or beneficiary. That is not an administrative detail; it is what decides whether there is an obligation at all.
• The last return filed, if there was one, and for which year. Without it the 20,000 € increase rule cannot be applied, and in case of doubt people end up reporting more than they need to.
• For the 721, a list of holdings in each virtual currency at 31 December, valued in euros, with the platform holding them and its country.
• The dates on which anything reported in earlier years was closed or sold and is no longer held, because that triggers a fresh return even if nothing has grown.

How we handle it

We take the inventory first and decide afterwards. Each asset to its block, each block to its threshold, and a comparison with whatever was last filed to see whether it has to be repeated. If there are earlier years outstanding, we sequence the catch-up starting with the years still open and explaining what risk remains live in each.

What we do not do is treat a grey area as settled. When your platform or your product sits on the edge, we tell you it sits on the edge and what each reading would mean. The full line is on modelo 720, and the form asks for the inventory, which is where this has to start.