Holding a UK bond but living in Spain or Portugal?

Fiduciary Wealth Team

We come across many clients who have been advised to take up a UK bond which allows them to take 5% tax free each year. Well that sounds like a good proposition so long as you are UK tax resident. Yes I did say UK tax resident as opposed to UK national.

You see the problem is that too many unprofessional and sometimes unregulated advisers abound. Sadly they don’t seem to understand the products they sell let alone the tax implications. If you are tax resident in Spain or Portugal taking up a UK bond is not the solution.

Leaving aside the fact that these are not structured tax efficiently from a Spanish or Portuguese perspective and expose you to a massive tax liability; they certainly don’t protect you from greater tax transparency and automatic exchange of information agreements such as FATCA. Let’s be clear on this point bonds or tax wrappers as they are commonly known will also be looked through... and the investments will be reported to your country of residence. This could have dire financial consequences for you.

A word of warning...

If you are holding a UK bond that has been issued in the Isle of Man but you reside in Spain (whether the bond is wrapped up in a Trust or not) you need to speak to us.

If you are holding a UK Bond issued in the Isle of Man, but you reside in Portugal... you had better hurry too... you have a problem which needs addressing quickly.

For uncompromising professional financial advice from qualified and regulated certified financial planners (born out of a law firm dating back to 1892) call Tel: +34900102374 or email One of our financial consultants will get in touch to arrange an appointment to discuss your financial planning and wealth management requirements.