Question
In USA waiting on Spanish Non Lucrative Visa. Question about US Expats & banking. I have an IRA with a US brokerage firm, do I have to move my IRA to Spain?
Can it stay in the US or must it be moved to an International Brokerage firm? Trying to avoid extra fees.
Answer
These are the answers of Spainguru’s Facebook group members:
“Do NOT move any of your investments to Spain. Keep them in the US.”
“I don’t know any American expats living in Spain who have given up their US investment accounts. It’s potentially risky. We keep all of our money in the US and only transfer what we need monthly to live on.
The Spanish government often freezes accounts owned by non-citizens for the craziest reasons and use the excuse they are trying to prevent money laundering. Keep your money a safe ‘known’ place and just transfer monthly to a Spanish account to pay your bills and get cash.”
“Some of the issues around having assets in Spain are real, but the REAL reason not to move is because of US reporting requirements. It is a serious problem for Americans to hold any kind of investment fund or vehicle that is registered outside of the US.
(This can include funds of US stocks that are not US registered funds) IRS penalties for failure to comply can be up to 85% (if I recall correctly) of any gains or income.”
“One recommendation that is often given is to keep a US address for financial purposes (Many use a family member’s address). I have a friend who moved from Las Vegas to Valencia and he had money frozen when he changed his account address to his home in Spain.”
“The best (only?) way to avoid running afoul of holding what FATCA make into ‘toxic assets’ is to leave investments US domiciled.”
Conclusion
The general advice from the community for US expats under a Spanish non lucrative visa concerning their IRA and investments is to maintain them within the US.
Transferring assets to Spain or to an international brokerage poses significant risks, including stringent US tax regulations and potential issues with Spanish banking practices, such as account freezes.
Keeping investments in the US and managing transfers as needed monthly is recommended to avoid complications.
