Reporting Requirements for Modelo 720: OPES and COPIA
Bulletins issued by Overseas Trust and Pension Limited (OTAP) provide insights and commentary on topical industry matters. The bulletin and its contents are not intended as advice nor should they be construed, interpreted or used as such.
For use by Professional Advisers only.
It is important to understand the obligations as a Spanish resident to report under Modelo 720. This Q&A considers such obligations in respect of Foreign Pensions offered by Overseas Trust and Pension (OTAP) including OPES (Spain) and COPIA.
What is the Modelo 720?
It is a report that is submitted online by a person who becomes resident in Spain within that fiscal year. The report is done over and above their tax return and stipulates the assets that they own outside of Spain where the value of that asset is €50,000.00 or more. Reportable assets, fall into the below 3 categories:
- Accounts held with financial institutions
- Investments including amongst others: shares, securities, life insurance policies and annuities
- Immovable Property
Who are the Parties involved in the Reporting?
- The owner of assets
- The settlor of a trust where the settlor is the beneficiary of that trust
- An authorised signatory
- Any party having authority to dispose of an asset on the legal owners behalf (including those assets held with a company/trust or fiduciary).
Foreign Pension Plans
The Spanish Dirección General de Tributos (‘DGT’) confirmed the conditions under which a Foreign Pension or Retirement Plan becomes reportable under Modelo 720. Stating that in certain circumstances where the individual has contributed to a Foreign Pension scheme which allows that individual to surrender the scheme in the same way as they could a life assurance product, the scheme must be reported on the Modelo 720.
The principle behind this is that if a client can access all the capital within a Pension fund it shouldn’t be treated any differently than a life insurance bond for reporting purposes.
In addition to this broad statement the Spanish legal code requires Pensions to display three very specific characteristics. These being:
- The assets under the Pension are derived from irrevocable contributions made to the Pension.
- The purpose of the foreign Pension is to provide benefits in retirement.
- The Pension is treated fiscally and regulated as a Pension in the territory from which it is issued. IV. The Pension is a separate legal entity from the member of the Plan and owns the assets in the Pension.
- The assets held in the Pension are managed by a professional manager with no intervention from the member.
- The member cannot have access to retirement benefits without the prior approval by the Pension Plan.
Annuities paid from a Pension
Where a Spanish resident is in receipt of an annuity paid from a Foreign Pension, they must report the capitalised value of the annuity and the method of calculation.
Where can I get the Capitalised Value of my Annuity?
OTAP can be contacted directly to provide such information where an annuity is issued by them in respect of OPES and COPIA Pension Plans.
Ryan Levy, BCom in Financial Management & Certificate in International Trust Management
International Business Consultant, Overseas Trust and Pension
Overseas Trust and Pension (OTAP) is the brand name of Overseas Trust and Pension Ltd, Overseas Pensions and Benefits Ltd and Overseas Pensions Administration Ltd, (the Companies). They are licensed by the Guernsey Financial Services Commission under the Regulation of Fiduciaries, Administration Businesses and Company Directors, etc (Bailiwick of Guernsey) Law, 2020. Overseas Trust and Pension Ltd and Overseas Pensions and Benefits Ltd are registered in Guernsey numbers: 55506 and 39935 respectively. Their registered office is Lefebvre Court, Third Floor, Block B, Lefebvre Street, St Peter Port, Guernsey, GY1 2JP. Overseas Pensions Administration Ltd is registered in Alderney number: 1427 and its registered office is Millennium House, Ollivier Street, St Anne, Alderney, GY9 3TD.
Overseas Trust and Pension Limited is an authorised financial services provider in terms of the South African Financial Advisory and Intermediary Services Act (“FAIS”) and is regulated by the Financial Sector Conduct Authority (“FSCA”) of South Africa. FSP number 47261.
The Companies do not offer financial, investment or tax advice, any information provided should not be considered as such. The Companies accept no legal liability for losses, damages or expenses which you may incur or suffer directly or indirectly by using this information.
We endeavour to make sure the information is accurate and up-to-date however, no warranty is given as to the accuracy or completeness of any information and no liability is accepted for any errors or omissions in such information.
We strongly recommend that clients take regulated financial and investment advice relevant to their individual circumstances. It is the responsibility of clients and their advisers to review the advice and investments at least annually. The product terms, risks and charges (including: initial, annual and exit) should be considered, understood and agreed with your Financial/Investment Adviser.
Past performance is not a reliable indicator of future results. Investment values and the income from them can go down as well as up and may be affected by changes in rates of exchange. An investor may not receive back the amount initially invested.