Box spread tax in Spain
An estimate of how box-spread financing is taxed for a Spanish tax resident. The financing cost shows up as a capital loss you can offset against your gains.
A capital loss in savings income
Option results are capital gains or losses (art. 37.1.m LIRPF) taxed in the savings income base, according to the Spanish tax authority's rulings V0512-19 and V0503-21. The position is held in an ordinary securities account.
Offsetting your gains
The loss offsets gains from selling shares or funds in the same year without limit. Any remainder offsets up to 25% of your dividends and interest, and the rest carries forward 4 years (art. 49 LIRPF). Option gains have no withholding tax.
Estimate
Pre-tax box rate
2.5%
Tax saving (marginal rate)
23%
After-tax box rate
1.93%
Annual cost on €150,000
€3,750
Annual cost after tax
€2,888
Tax saved (per year)
€863
This is an estimate, not tax advice.
It assumes you have enough capital gains to absorb the loss in the same year. If not, the loss carries forward 4 years, and against dividends and interest it only offsets up to 25%. The Spanish tax authority has not ruled on box spreads specifically, so the general treatment of options applies. For comparison, interest on a securities-backed (Lombard) loan is not deductible for an individual. Check with your tax adviser before deciding.