Almost everything argued about Modelo 720, the Spanish information return on assets and rights held abroad, is resolved by understanding one single thing: it is not one return, it is three separate information obligations travelling on the same form. Each has its own €50,000 threshold, each is looked at separately and none of them adds up with the others. Whoever understands that gets it right 90 % of the time; whoever adds up everything they own abroad gets it wrong in both directions.
The three blocks
| Block | What it groups together | Keys |
|---|---|---|
| Accounts | Accounts and deposits held with institutions abroad whose business is banking or lending | C |
| Securities, rights, insurance and annuities | Holdings in entities, lending of capital to third parties, securities contributed to legal arrangements such as trusts, investment funds, life or disability insurance and temporary or life annuities | V, I, S |
| Real estate | Real estate and rights over real estate located abroad | B |
The fact that the second block groups things as different as shares, a fund and a life insurance policy is not a whim of the form: they all derive from the same information obligation. That is why they add up together, and why a modest portfolio plus a modest savings policy can jointly cross a threshold that neither would cross on its own.
The threshold looks at the whole asset, not your share
The €50,000 is calculated on the total value of the asset, regardless of the percentage that belongs to you. Then, in the record for each asset, your percentage is entered. They are two different things and they are confused all the time.
| Case | How it is assessed | Result |
|---|---|---|
| Account of €72,000 shared between three siblings | The total counts, not each sibling's €24,000 | All three declare, each with 33.33 % |
| Account with €42,000 at 31 December and an average balance for the last quarter of €58,000 | The average balance is also taken into account | There is an obligation |
| Share portfolio of €30,000 and a life insurance policy with a surrender value of €27,000 | They add up within the same block | There is an obligation for both |
| Accounts of €46,000, securities of €44,000 and a property of €48,000 | Each block goes its own way | No obligation for any of them |
| Flat inherited in 1998 that cost €40,000 and is worth €220,000 today | Real estate is valued at acquisition value | No obligation for that block |
Once the threshold is exceeded, you do not declare only what pushed it over: you declare every asset in that block, including the account with €180 in it that nobody has used for years. The obligation covers the whole block, and a forgotten account is exactly as declarable as the main one.
Accounts and their two amounts
The accounts block is the only one assessed with two figures: the balance at 31 December and the average balance for the last quarter. That duality exists precisely so that the threshold does not depend on what happens on the last day of the year, and it has a very specific practical consequence: emptying the account on 30 December does not avoid the obligation, because the quarter's average balance is still there.
Anything that is an account with an institution whose business is banking or lending goes in, whatever it looks like: accounts with neobanks and with payment platforms that have a foreign IBAN count, even if the app is in Spanish and the money comes from a Spanish salary. What decides it is where the account is opened, not where it is used from.
The securities block, which is the broadest
Things fit in here that many people do not associate with "securities":
- Shares and holdings in foreign companies, listed or not.
- Bonds, promissory notes and any lending of your own capital to third parties.
- Investment funds and units in collective investment undertakings.
- Life or disability insurance with a surrender value, and temporary or life annuities.
- Pension plans taken out abroad, when their legal nature fits one of the categories above, which is a question to be examined product by product and not by brand name.
- Securities contributed for management or administration to legal arrangements such as trusts and fideicomisos, a case that requires reading the founding document before deciding anything.
Your employer's shares held on a foreign platform go in as soon as they are yours. Options not yet exercised do not. The boundary is explained in equity and Modelo 720.
The real estate block and its rights
Ownership is declared, but so are rights over real estate: usufruct, bare ownership, multi-ownership and timeshares. The value taken is the acquisition value, which is why this block is triggered much less often than people expect: a house bought decades ago is declared at what it cost back then.
And one clarification that saves grief: inheriting a property abroad is acquiring it. The fact that you do not use it, that it is let to a cousin or that you have never even seen it does not change ownership, and ownership is what is declared.
In what capacity you count
The threshold is assessed on the assets in respect of which you hold one of the capacities listed on the form: holder, representative, authorised person, beneficiary, usufructuary, policyholder, someone with power of disposal, or ultimate beneficial owner. Someone authorised on his mother's €120,000 account abroad is obliged for that block, even though the money is not his. There are specific exceptions for certain authorised persons on accounts of legal entities, and they are checked one by one.
Modelo 720 is not a family return. In a married couple, each spouse looks at his or her own blocks, with the assets in which he or she holds one of those capacities. It is perfectly possible for one to be obliged and the other not, and also for both to declare the same account at 50 % each. What does not exist is a joint return.
How we do the calculation, in order
- A list of everything held outside Spain, unfiltered: accounts, portfolios, funds, insurance, plans, real estate and holdings in companies.
- Allocation of each asset to its block and its key, which is where errors of judgement are made.
- Determination of capacity: holder, joint holder, authorised person, beneficiary, usufructuary or beneficial owner.
- Valuation under the rule for each key, with the institution's certificate behind every amount.
- Conversion into euros at the exchange rate on 31 December, and totals by block.
- Comparison of each block with its threshold, and of each block with what was last declared.
It looks bureaucratic and it is, but that order avoids the two bad endings: declaring too little because an asset was forgotten, and declaring too much by putting on the form things that do not belong there, which also has consequences.
Borderline cases we have seen
The account from an estate not yet divided. While the estate is still undistributed (what Spanish law calls a herencia yacente), who holds the account and in what capacity is not obvious, and the answer depends on how far the succession has progressed. It is one of the cases where it pays to document the decision taken.
The pension plan from a previous job. An occupational plan abroad that cannot yet be cashed in raises the question of whether there is a declarable right and at what value. It depends on the product, and the brand name does not settle it.
The foreign company that owns property. Someone who holds shares in a company abroad which in turn owns a house declares the shares in their block, not the house in its block. Mixing the two up doubles the wealth declared and later costs an explanation.
When the threshold is only just exceeded
The borderline case is the most uncomfortable, because it forces a decision with a narrow margin and with figures that depend on an exchange rate. Our way of handling it is conservative: we gather the institutions' certificates, fix the exchange rate at 31 December from a stable source and document the calculation, even when the conclusion is that there is no obligation. That file is worth its weight in gold on the day a letter arrives asking why nothing was filed, and it is the only way to answer with something more than an assertion.
And after the first year
Filing one year does not mean filing every year. The obligation returns when the combined value of a block rises above a limit compared with what was last declared, or when an asset that was declared is closed or disposed of. We explain the detail of that calculation in when you have to file again, and the field-by-field completion is in how to fill in Modelo 720, block by block.
If you would like us to do that calculation with your figures, the Modelo 720 form asks just what is needed: what you own, where and in what capacity. With that we tell you whether you are obliged to file and for which blocks, without assuming any figure we have not seen.