Transfer between funds


A transfer between funds is a total or partial reimbursement of the existing shares in an investment fund, which are subscribed in another fund. In this way, the reimbursed amount is taken, facilitating its transfer between different destination fund (s).

By the very definition of this financial operation, the amount of money in question goes from one investment fund to another, passing through a bank account (in the name of the investor). Alternatively, by law these transfers are only possible if they are made by resident individuals. For practical purposes, a transfer between funds responds to the mechanics of a redemption with a subsequent subscription to another fund, or several funds.

In order for the execution of a transfer between funds belonging to different management entities to be correct, it must be carried out in the entity of the destination account, which will be the party in charge of initiating the operation by notifying the originating entity. The maximum period of time that this type of process usually lasts is close to between eight and ten days, in part due to the corresponding regulation that exists if it is carried out in national territory, and 15 days if a foreign party intervenes in the transfer.

The Spanish case: the transfer between funds is not taxed

According to Spanish legislation, these types of operations are not required to pay taxes because according to tax regulations, this type of investment transfers between funds is possible without paying tax on income from movable capital.

In other words, there are no tax effects derived from this type of practice as there is no refund to the investor and the investor cannot dispose of that specific amount. It will be later when the shares are duly declared when they are taxed by the usual mechanism after a definitive reimbursement, paying tax on the capital gains generated at the percentage in force at that time.

Another advantage of a transfer between funds is that of preserving the value and age of the first investment. However, it is important to note that this regulation affects Spanish funds or funds from countries that have a community passport, but not other listed investment funds.

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