Wednesday, 24 August 2011

QNUPS - Questions and Answers


·        Qualifying Non-UK Pension Schemes

·        Expatriate Tax and Pension Planning

·        UK approved by HMRC

The Inheritance Tax (Qualifying Non-UK Pension Schemes) Regulations 2010 [S1 2010/0511]

What does QNUPS stand for?
Qualifying Non UK Pension Schemes, that means that they are overseas pension schemes that meet UK tax criteria and are approved by the UK Tax Authorities (HMRC). One of their main plus points is that they are exempt from UK inheritance tax and may be available to UK residents, which means that people who may never have considered offshore investments as a way of IHT planning may be interested in the schemes.

How much do they cost?
The fees for setting up and running QNUPS are likely to be similar to those that are charged for domestic schemes. Professional fees from advisers that I recommend will be competitive and reasonable. Please contact me by email

Are they just IHT saving schemes?
It’s true that investors may be attracted at first glance to QNUPS because of their IHT exemption. However, there is more to the QNUPS than IHT efficiency. Given that some are free from the strict investment controls that apply to QROPS, some investors may find that they are preferable from the point of view of providing freedom to invest in whatever you like within a pension wrapper.

Who can put money into these schemes and how much?
Like other pension schemes, you can start investing in QNUPS while working. With no maximum age limit, you can keep on putting money into the scheme way beyond your retirement as long as you want. Your investment does not only have to be in the form of your employment income but it can be from any source and even in the form of valuables and antiques. There is no maximum limit to the investment. It is very important that you are not put off by unscrupulous ‘advisers’ who want only cash investments. Get a good adviser! Please email me

Does the protection still work if the expat returns to the UK?
Designed as an overseas pension scheme, this is a common question which comes to mind regarding QNUPS. Fortunately, even if an expat returns to the UK, the asset put into the scheme will continue to be exempt from the IHT and can be passed on to his beneficiaries tax free in the event of his death.

Can I invest existing assets into QNUPS?
QNUPS provides an excellent opportunity for in-specie transfers i.e. Investments you have built up, properties you own and other revenue producing assets can just as easily be a pension contribution. The investment does not have to be cash but cash is not excluded. Indeed the investments that can be held in a QNUPS are much less prescribed by HMRC than traditional pensions. Remember, however, that the QNUPS has to be a Pension Scheme but it is also a plan to defend assets from Inheritance Tax (IHT).

If any adviser suggests selling your assets and buying another financial structure beware. In-Specie Transfers offer a much more cost effective route, normally, and also selling assets can lead to an encashment charge or even a tax bill (eg Capital Gains Tax). To avoid this pitfall please speak to a recommended adviser. Please email me for details. Remember In-Specie Transfers.

Can I take out a QNUPS but take no income?
As the rules are less strict than other pension plans, you don’t have to take and income unless you need to.

Although for most expats a pension income is required it is not compulsory. Therefore, QNUPS can be ideal for accepting investments that you can no long contribute to, such as ISA’s. QNUPS as a capital asset are more tax efficient than ISA.


There are many more questions which can be posed and you may need to add some of your own. If you want to ask a question, request a referral to a suitably qualified adviser or just comment, please email me.


David Goodall
Financial Pages in Spain

Friday, 19 August 2011

QROPS Pensions – Questions and Answers


Updated with readers questions

·        Qualifying Recognised Overseas Pension Schemes
·        Is there a minimum amount for QROPS?
·        Explaining New Zealand QROPS
·        You can move your UK pension assets to QROPS
·        Who can advise me best?
·        QROPS must be approved by UK HMRC

Qualifying Recognised Overseas Pension Schemes (QROPS) were introduced in April 2006, by the UK Government, as part of a process called Pensions Simplification. However, it remains very complex!

In this ‘Question and Answer’ format should be the main issues for those of you who live in Spain or indeed those who intend to live in Spain. Individual queries can be sent by email

I have a frozen pension in the UK with a former employer. I’d rather have control myself so can I have a SIPP?
A SIPP is a possibility but not the only one. A pension transfer to QROPS is another. You need to have the full range of options available. The Financial Services Authority in the UK (FSA) requires pension transfers to be handled by a transfer specialist specifically authorised through their qualifications. Please email me for a referral

I’m only 45 years old and have a pension fund worth £33,500. I’ve been told that I can’t cash it in even though it’s in the UK and I’ve lived in Spain for 7 years. What would you advise?
If you have no intention of moving back to the UK, it is worth considering transferring your existing fund to a recognised alternative, approved by the UK tax authorities (HMRC). There will be a number of alternatives so your current and future circumstances need to be considered.

What’s the minimum amount I can transfer into a QROPS?
Some advisers regard sums of under £100,000 as ‘small pots’ not worth transferring. However, with extremely low annuity rates and poor rates under the GAD rules, readers, with less than £100,000 to be transferred, need and deserve advice. New Zealand QROPS, which I have dealt with, are certainly worth readers looking at. Let me recommend an adviser, click here. If your adviser says your fund is too small – seek a new adviser!

Is the transfer into a QROPS expensive?
The main cost associated with a QROPS is the preliminary registered scheme
transfer work that is required before your pension assets can pass into a QROPS. This is specialist work and I’ve never thought cheapest is best in professional advice. However, it must be reasonable. A really good financial adviser, who is properly authorised and regulated, will put the costs in writing, before expecting you to sign up to their scheme. I’m happy to recommend such an adviser if you contact me here. Please be aware that some advisers  don’t tell you the costs in an open and unambiguous way. Always seek clarification.

As part of my ‘second opinion’ option, if you have a report which is unclear, send it to me and I will give my thoughts.

I’m happy with the investment in my SIPP, why can’t I transfer it to QROPS?
If an adviser indicates that you cannot transfer your existing pension investment to QROPS they are wrong. This type of transfer is known as an ‘In-Specie transfer’. It is acceptable in QROPS because to meet the rules in the UK the investment has to be approved. If the investment is acceptable in  UK pension funds then it is perfectly satisfactory in QROPS.

Some advisers have difficulty in distinguishing between their own business model and the rules! To avoid such advisers, please email me

What can I invest my QROPS assets in?
There is a flexible choice open to you and part of a good adviser’s process is to determine and agree an investment strategy which closely matches your needs. Your attitude to investment risk is also key, since it will indicate the asset classes that you should use and those to avoid.

Will any benefits I take from QROPS be taxed?
QROPS income is generally not taxed at source. The tax treatment of what you receive is very favourably treated in Spain, though you need individual advice to explain how it affects you.

What will happen to my QROPS when I die?
Any funds remaining when you die will either be paid to those nominated by you as beneficiaries or those same beneficiaries may simply continue deriving the same tax free advantages you were enjoying in your lifetime.

Are there any circumstances in which I shouldn’t transfer to a QROPS?
If you want the certainty of income and are prepared to hand over your fund to a pension provider, then an annuity might suit you better than QROPS. I would not suggest you to transfer to QROPS if you intend to be expatriate for less than six years, but you need advice from an authorised and regulated adviser.

I’ve heard about unscrupulous QROPS providers and intermediaries, any
comment…?
In May 2008, Her Majesty’s Revenue and Customs (HMRC) withdrew status from all Singapore based QROPS. Despite an appeal by a Singapore Trustee, the actions of HMRC have been upheld in the UK Courts.This action emphasises the importance of taking independent advice from industry experts who are in regular contact with HMRC to ensure that any transfers do not nor are likely to fall foul of HMRC regulations. The best advisers can also offer a choice of QROPS based in more than one jurisdiction. Ask to be introduced

Which is the best QROPS jurisdiction?
The only honest answer is that it depends on personal circumstances and can also be determined by an individuals own preferences. I can say that for Spanish residents the worst jurisdiction for QROPS would be Spain!

If the pension value is quite modest and you have been UK non-resident for more than five full and complete tax years, then New Zealand is a credible jurisdiction. Under these circumstances you have the option to encash your pension plan.

By being open and frank with an authorised and regulated adviser, a plan can emerge which has to be in the individuals best interests. If you email me, please give me a brief outline of your circumstances and what your immediate objectives might be. I will ensure that you get authorised and regulated advice. If you live in Spain and are considering a Pension Transfer (including QROPS), the adviser that I recommend will regulated by one or more of the following;

CNMV
Comision Nacional del Mercado del Valores is the principal financial services regulator in Spain and responsible for authorising investment products.

DGS
Direccion General de Seguros y Fondos de Pensions is the Spanish regulator for insurance products which can be marketed in Spain.

FSA
The Financial Services Authority – the UK’s financial services regulator.



* * * * * * *

If you have a further question, I’d be delighted to answer it. Those of you who live in Spain or intend to live in Spain should be very careful when choosing an adviser. You can write to me with your personal experiences or to be put in touch with a recommended adviser Email me here

For most people, a pension fund is their second biggest asset. Do not get involved with unauthorised and unscrupulous ‘advisers’.




Friday, 12 August 2011

Spanish Inheritance Tax (ISD)


Impuesto sombre sucesiones y donaciones

First Anniversary Week – Day five

  • Details and scope of ISD
  • What various professionals say
  • Non-residents ARE liable

Are there any solutions? Please read on

No Inheritance Tax is payable if the property is owned by a UK company, since even if a shareholder dies, the company can continue in existence and the shares passed on to a beneficiary under UK rules.

In recent times, my blog has carried several posts dealing with the very complex subject of Spanish Inheritance Tax (ISD). This is very definitely a subject on which you need professional advice. To access a professional please email me.


  • A detailed explanation of ISD is contained in this post;



  • Here are some views from various professional advisers, who have dealt with the problems associated with the ownership of property in Spain and the heartbreaking situations of dealing with inheritance tax.



  • Expats and property owners in Spain - No plan for Spanish Inheritance Tax? This post includes a Widow’s sad story and the inevitable question ‘why didn’t anyone tell us’?



The question ‘why didn’t anyone tell us?’ is probably the one I get asked most often. One of the key objectives of my blog is to provide INFORMATION. I do not and will not take advertisements from financial companies. I give links only to offers and services which I have used myself or I have tested.

This leads me to understand that people working in property, financial advisers, mortgage broking, pensions, lawyers and other financial services must be open in all dealings with clients.

  • Openly disclose all commission and charges
  • Tell clients how it is – good and bad
  • Please, please, please tell them about Spanish Inheritance Tax (ISD)

There is also an opportunity here to check your own Spanish Inheritance Tax liability

I am happy to receive feedback, answer questions or refer to appropriate professionals if you email me


David Goodall
Financial Pages in Spain

PS Always remember that UK IHT and Spanish ISD are so different that there is no Double Taxation Treaty or Agreement between the two countries.






Thursday, 11 August 2011

QROPS (Qualifying Recognised Overseas Pension Schemes)

      April 2012 - Readers Might prefer the update post 'New Generation QROPS 2012'
      http://expatsfrombritain.blogspot.co.uk/2012/03/new-generation-qrops-2012.html



September 2011 – Five links giving in-depth information about QROPS


·        QROPS Questions & Answers
·        New Zealand QROPS
·        QROPS Factsheet
·        QROPS Comparing jurisdictions
·        Ten things they won’t tell you about QROPS

QROPS (Qualifying Recognised Overseas Pension Schemes) are set up to allow a transfer of UK pension rights, abroad, with the full approval and authority of the UK Tax Authorities (HMRC)

I thought I’d start with that because even some people who advertise them don’t know what they truly are!

Rather than repeat articles that I have posted before I will give you links to the ones I believe are most appropriate and topical.


  1. QROPS Questions and Answers
In this ‘Question and Answer’ format should be the main issues for those of you who live in Spain or indeed those who intend to live in Spain. Individual queries can be sent by email



  1. New Zealand QROPS
Some unscrupulous ‘advisers’ are unwilling to accept the valuable place in the market that is met by NZ QROPS. I think ‘big’ firms sometimes confuse their own business objectives with the actual rules! Those who benefit tend to have small funds and are no longer UK taxpayers as they have been UK non-resident for 5 or more UK tax years. Please email if you need more information.



  1. QROPS Factsheet
I produced a QROPS Factsheet as I was concerned that many newspaper adverts were clearly biased and did not give factual information. If you’d like a copy please email me



  1. QROPS Comparing jurisdictions
This article deals with comparing jurisdictions and deals with the key topic of ‘residency’. Why is jurisdiction important? Why you should know. This article deals with comparing jurisdictions and deals with the key topic of ‘residency’. Why is jurisdiction important? And why you should know. Please email me if you have individual queries.



  1. Ten things they won’t tell you about QROPS
The concept of QROPS is excellent, the quality of advice often lacking.

It doesn’t apply to all ‘International Financial Advisers’ but it applies to most. Some are guilty on all ten counts! To be referred to a recommended adviser, please email me.



I hope that the combined content of my posts above will give a very thorough insight and much detail about Qualifying Recognised Overseas Pension Schemes(QROPS).

You may find more information on my website too;




David Goodall
Financial Pages in Spain




Wednesday, 10 August 2011

Qualifying Non-UK Pension Schemes (QNUPS)


October 2011 Update


  • Get authorised and regulated advice

  • Remember that QNUPS is a Pension Scheme, with added benefits

  • Ideal for In-Specie Transfers
  
I’ve written posts about QNUPS before, when the response of readers is always good. There have been lots of queries and many people wanting to be referred to a qualified and regulated adviser by emailing me.

This contrasts markedly with the actions of large, well-known companies with big advertising budgets. Let me give you an example.

This particular company advertise extensively in all parts of Spain where expats live. From July to December 2010 they spent many thousands of euros on a substantial campaign to promote QNUPS. They also held many QNUPS seminars. At the turn of the year the QNUPS adverts stopped and have not appeared since in 2011.

Why?

I can speculate that there are three reasons;

  • They failed to embrace the concept of ‘in-specie’ transfers which I deal with later
  • They fail and refuse to disclose commissions even though they are regulated by the UK FSA
  • Irrespective of your individual circumstances, this company only promotes one investment solution for YOUR funds

I’m sure you don’t want to deal with a company like that, so please ask me for referral to a company who treats YOU as an individual. I will put you in touch if you email me.

In February 2010, HMRC confirmed that contributions to a Qualifying Non-UK Pension Scheme would be exempt from UK IHT. What this means is that as long as the QNUPS walks and talks like a pension, then the assets held in it will be protected from UK IHT.

This is not meant to be an exhaustive list, but I believe there are seven main categories of individuals who will most benefit from or should consider a QNUPS;

  1. Any UK resident who from 6th April 2010 became restricted on their UK pension contributions to basic rate tax relief.

  1. UK domiciled persons (that includes many UK citizens who have become Spanish residents), and UK residents who want to make pension contributions beyond the UK maximum limits.

  1. UK non-residents, including Spanish residents who already have a QROPS but want to add to their pension funds. A classic transfer would be UK savings receiving very little interest, including PEPs and ISA’s

  1. Individuals who want to build an IHT friendly investment, intended as part of retirement planning but not related to their income or employment situation. In fact, if IHT planning is the key component, even though this is a pension scheme, the ‘income’ from QNUPS can be nil

  1. Anyone looking for a way of consolidating their lifetime savings or investments without the restrictive rules of conventional pension planning. Though QNUPS is officially a pension scheme, it can be used more like a traditional savings or investment plan

  1. Any UK resident or domiciled individual who wishes to build up a pension fund in excess of the current lifetime limit

  1. Individuals irrespective of residency who want to move their existing plans, portfolios or other assets, to take advantage of the tax efficient QNUPS. This includes those who want to benefit from an ‘in-specie’ transfer

QNUPS provides an excellent opportunity for in-specie transfers. Investments you have built up, properties you own and other revenue producing assets can just as easily be a pension contribution. The investment does not have to be cash but cash is not excluded. Indeed the investments that can be held in a QNUPS are much less prescribed by HMRC than traditional pensions. Remember, however, that the QNUPS has to be a Pension Scheme but it is also a plan to defend assets from Inheritance Tax (IHT).

If any adviser suggests selling your assets and buying another financial structure beware. In-Specie Transfers offer a much more cost effective route, normally, and also selling assets can lead to an encashment charge or even a tax bill (eg Capital Gains Tax). To avoid this pitfall please speak to a recommended adviser. Please email me for details. Remember In-Specie Transfers.


There is also the opportunity to see 'QNUPS - Questions and Answers' which may deal with your own query
http://expatsfrombritain.blogspot.com/2011/08/qnups-questions-and-answers.html

Also Remember the Regulators! I will only recommend an adviser who is authorised by one or more of the following;

CMNV
Comision Nacional del Mercado del Valores is the principal financial services regulator in Spain and responsible for authorising investment products. A CNMV adviser can be recommended, please click here

DGS
Direccion General de Seguros y Fondos de Pensions is the Spanish regulator for insurance products which can be marketed in Spain. Email me to be referred to an authorised adviser.

FSA
The Financial Services Authority is the UK's financial services regulator. Many British clients prefer a UK adviser and have dealt with FSA regulated advisers in years gone by. For an introduction to recommended adviser, with experience in Spain, please click here .


I would also recommend the following which may give more information about items mention in this post;





You can write to me with your personal experiences or to be put in touch with a recommended adviser by sending me an email



David Goodall
Financial Pages in Spain

Monday, 8 August 2011

Seeking professional advice


First anniversary week – Day one

This is the first of five posts on major issues affecting British and Irish expats and property owners in Spain. On first view it may not look like a major issue but I know from emails received that it certainly is.

No trick question but where do think is the best place to seek advice?

  • A man in a pub. The classic quote I hear so often is ‘I heard somewhere………’
  • An unauthorised, non regulated and unqualified person or company who calls themselves an ‘adviser’
  • A properly trained, fully qualified, authorised and regulated, individual or company who not only give you the best advice, but as part of their professionalism carry PI (professional indemnity) cover in case things go wrong.

Is there really a choice?

Why would you not use a professional?

Apart from owning property in Spain for nine years and struggling to find professional advice, in the last year my Blog has lead me to many professionals. If you need advice, please email me.

My own connections included the following professionals;

  • Regulated financial advisers( FSA, CNMV, DGS)
  • Suitably qualified accountants
  • Professional lawyers
  • Chartered surveyors in Spain
  • Members of the Association of Property Professionals
  • Company formation for property ownership specialists

If you email please let me know your question and where you live. I may be able to answer myself, just point you in the right direction or refer you to a suitably qualified person.

For more detailed reading you may wish to look at previous posts to my Blog




Please remember that my Blog is about unbiased, factual financial information. You can look elsewhere for information but remember that an advert will certainly be biased towards the company who paid for it. I have no problem with that but remember it’s biased!

David Goodall
Financial Pages in Spain


Friday, 5 August 2011

Financial Pages in Spain


First anniversary week

·        Pension Planning
·        Understanding Spanish Taxes
·        Investment choices
·        Spanish inheritance tax (ISD)
·        Residency issues

August 9th 2011 marks the first anniversary of this blog. To mark the event, for the week commencing Monday 8th August, I will be publishing a daily report of the biggest issues confronting English speaking people with a financial interest in Spain.

That’s Spanish property owners, British and Irish expats in Spain and those who love Spain and may want to know more.

One of the biggest problems I come across can be put down simply to something summed up in a saying often used in business;

‘Failing to plan is planning to fail’

In it’s many guises I come across this situation on a regular basis. That doesn’t mean nothing can be done but its often more expensive to put it right!

Many people email me for very general queries and I’m always happy to help. But if you need professional advice I will tell you. One of my own favourite posts is this;


Ultimately, there is no substitute for professional advice.

Financial Pages in Spain is, primarily, an information service. You will notice if you read the blog there are no paid-for advertisements. However, I do link directly to services I am recommending.

  • Check your Spanish Inheritance Tax liability
  • La Torre Fx- Foreign Exchange gives you an option to choose between your Bank and a service set up, specifically, to compete and offer better rates
  • My Amazon link to books about Spain and other useful items

These links are here ============รจ

There is also my website, you will by now, recognise the name;


Feedback is very important, to this service and I welcome emails. Please let me know

  • Ideas for future articles
  • Information you need
  • A referral to a pre-checked professional service

Most important of all – enjoy Spain