Monday, 26 March 2012

Does the UK Government want the Elderly to Emigrate?

There are signs that they do

I realise that it sounds unlikely but there are reasons behind my view. Spain has many lifestyle advantages and those retired or near retirement might be encouraged to go for the following reasons;

·        QROPS

After the recent review it was thought that the Government was discouraging transfers of pensions out of the UK. In reality, the changes announced in the Budget are a warning shot to those who would seek to ‘misuse’ UK pension funds.

In particular, the ability to encash funds and take 100% for immediate use has been scrapped. This was a ‘loophole’ now closed.

But there is nothing in the Review which discourages retiring abroad and taking your income there. Please email me for more personal information

·        Taxation policy

I was somewhat shocked by George Osborne’s statement that there would be a review of age-related tax allowances. In reality the budget technical notes (the devil is in the detail) makes the following two changes which negatively affect the over-65’s

1.      Those already in receipt of the Over 65 Age Allowance will see this ‘frozen’ for the next 3 years. In the past this allowance has been index-linked to counter the effects of inflation

2.      From 6th April 2013, for people reaching the age of 65, the age allowance is scrapped! This means that anyone born after 5th April 1948, will NOT receive the Age Allowance

Taking away age-related tax allowances might just be the ‘final straw’ for some people!

Readers should also be aware that this policy contrasts greatly with Spanish taxation policy. It’s too complex to explain here but individuals and couples can get professional advice by sending me an email and I can put you in touch with the right person. However, the Spanish system assumes that part of the retirement income is ‘capital’ which is untaxed and the minority is ‘interest’ which is taxed. This means the effective tax rate in Spain is MUCH LOWER than the UK.

  • National Health Service (NHS)

The cost of treating elderly people is MUCH higher than that of younger citizens. That has been clear for many years but as the population lives longer, the cost will grow substantially.

The current controversial reforms are aimed at substantially reducing future costs. Getting more elderly people to emigrate will help too!

The standard and quality of healthcare in Spain is superb.

It is very important that anyone contemplating moving to Spain should seek professional advice. I can give this guarantee that any professional that I refer you to WILL NOT charge an upfront fee.

Professional advice will have a cost but no advice could cost you everything

You might like also to read these posts from my Blog;

Getting professional advice

Review of the UK Budget 2012

Rent before you Buy

Please enjoy

David Goodall
Financial Pages in Spain

Wednesday, 21 March 2012

Financial Pages in Spain reviews the UK Budget 2012

UK Budget 2012

From a Spanish perspective

Update the morning after
In the details of the budget, it has become obvious that UK pensioners will miss out on Annual uprating of their Age-Related Tax Allowances. The group most badly hit are those with incomes of between £10,000 and £24,000. I'm CERTAIN this includes many, probably THOUSANDS of expats.

It is clearly a time to take stock and review YOUR tax position if you have UK taxed income but live in Spain. Please  email me to get access to advice. Remember my commitment

Professional Advice is crucial but I guarantee that there will be NO UPFRONT FEES

There are many expats, especially pensioners and expat workers, in Spain who have a close vested interest in the UK Budget. There will be much more analysis over the coming days but I thought an outline summary would help.

If you would like a professional analysis from UK economists please email me and I’ll give you the link.

  • Personal Allowances for income tax are increasing in line with the Lib Dem manifesto and the Coalition agreement in 2012/13 the allowance will be £8,105 but a steep rise in 2013/14 to £ 9,205. This is the amount anyone (UK taxpayer) can earn before paying any tax and increased taxed income for all taxpayers

  • The highest rate of income tax will fall from 50% to 45% from 2013 on incomes above £150,000 per year

  • The Chancellor announced a ‘review’ into the impact of taxes on pensioners. Hopefully the system will be easier in the future but no changes are being made immediately.

  • Corporation Tax on company profits to be cut by 2% to 24% and will be down to 22% from 2014. Though unlikely to affect Spanish residents directly, it could encourage UK companies to expand….into Spain?

  • Huge changes are being made to Stamp Duty Land Tax (SDLT) on properties over £2 million and loopholes closed to avoid purchase through overseas and offshore companies

  • Duty on tobacco increases by 5% immediately but I doubt if expat smokers buy cigarettes in the UK!

There are many other facets to the Budget and much of it is economic analysis but I wanted to publish the key details quickly. If any other factors come to light, later, I will produce an update. It could be worth putting this in your favourites and checking.

If you have any specific queries, please email me.

David Goodall
Financial Pages in Spain

Monday, 19 March 2012

Why invest offshore?

Offshore investment can be an important component of wealth and asset protection planning. This is a financial tax planning process but NOT tax evasion

Offshore financial planning is much more open than used to be the case and still has many advantages. This is especially true with the use of Trusts.

·         Not for tax evasion
·         Lost faith in British & Irish Banks. Never had faith in Spanish Banks!
·         Strategic financial planning

The term “offshore” originally comes from financial institutions located offshore from UK in the Channel Islands, but is now used figuratively to refer to banks in many regions, particularly Bermuda, the Cayman Islands, Bahamas and politically neutral European jurisdictions such as Switzerland. The Channel Islands, however, remain key offshore centres of excellence.

Individuals or organisations (including companies and businesses) may be interested in placing assets offshore for a variety of legitimate reasons, including:

1. The existence of a sophisticated infrastructure of financial institutions and professional service providers (lawyers, accountants, corporate services, etc). This is particularly true of Jersey and Guernsey where most of the financial services professionals will have trained in the UK

2. Tighter government regulation in the region in which the financial institution is domiciled. This may allow for a relatively favourable investment environment as compared to onshore.

3. Access to politically and economically stable jurisdictions. This may be an advantage for individuals who lack faith in the financial institutions in their ‘home’ country. After experiences of the last few years many British and Irish people might have lost faith in Banks. Then, of course, Spanish Banks really are something else!

4. Tax neutral.  Having no added local tax burden is a useful advantage for individuals who are not obligated to pay tax on worldwide income, or who may be able to defer taxation.  It also allows individuals to structure their assets without having to worry about local tax complications. This suits many expats.

5. As part of estate and/or asset protection planning. Another advantage for expats.

6. Broader "global" view than often found with onshore institutions.

7. Strong privacy and confidentiality laws to help protect depositor's interests but not Tax evasion.

Financial Pages in Spain can introduce you to these services but will NOT provide the advice. Only fully licensed, regulated and authorised advisers will ever be recommended.

Before considering any offshore investments you should carefully decide you objectives and what you are trying to achieve. The expertise in giving you advice needs to be at a high level. I can recommend advisers with the expertise, if you email me. You might therefore also like to read my previous post which covers getting good advice.

Tax Evasion Warning
Individuals with non-legitimate intentions may also seek to do business offshore, just as they do onshore, incorrectly assuming that their activities may be more likely to be overlooked or found acceptable. This of course is tax evasion and is illegal. The only advice I can offer such individuals is to make themselves legal and legitimate! Use an authorised and regulated adviser that I will be happy to recommend to you if you email me

In addition, it may be helpful to read a post on Savings and Investments, which could easily form a part of the process outlined above;

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

David Goodall
Financial Pages in Spain

Thursday, 15 March 2012

QROPS in 2012 - Finalised

.Qualifying Recognised Overseas Pension Schemes will change on 6th April 2012

Further Update
Readers may also benefit from reading New Generation QROPS 2012

Update - UK Budget 2012

The final ‘Guidance Notes’ have been published but almost as quickly, they were withdrawn. However, the 16-page, largely technical document makes a number of issues very clear. Please email me for more individual information.

  • Malta comes out very favourably, largely as an EU member
  • Gibraltar could equally benefit but needs to get its ‘act together’ to really benefit
  • The market leader. Guernsey, has already successfully made internal changes which appear to give it the ‘green light’
  • The Isle of Man will need to change its domestic pension plans if it wishes to meet the new requirements. IOM is strangely staying quiet suggesting there is a problem
  • There is now a question mark over some  New Zealand schemes will satisfy all of the requirements of the new regime of QROPS plans for 'Kiwisaver' plans. This is technical and VERY DEFINITELY needs help from a pensions specialist. Check your advisers qualifications not what the advert says.  email me for a recommendation

Financial Pages in Spain will be regularly updated as the details become more widely known, especially if new jurisdictions appear. In fact, the response of each of the jurisdiction will be important and will be reported here.

This is a good time to follow as even more details emerge. If you have an individual question please email me.

We shall shortly enter an era of NEW GENERATION QROPS stay in touch with Financial Pages in Spain

More posts to consider;

Getting Professional Advice (Now vital for QROPS advice)

Explaining Pensions Terms and Expressions

David Goodall
Financial Pages in Spain

Thursday, 8 March 2012

Tax Efficient Savings for Expats

What do Expats in Spain do with their ISA & Other Savings?

Maintaining the tax efficient status of your existing UK savings plans is often important. Once you become an Expat having moved to Spain, you are not entitled to the tax free elements of ISA, so you cannot add to your accounts.

But was it that tax efficient anyway? One little known fact about ISA and those predecessors, PEP and TESSA is that they are added to your estate on death and Inheritance Tax (IHT) is levied on them. Email me for details.

Now that’s not tax efficient is it?

So what you actually want, as an expat, is something like this;

  • The interest or growth on your investment grows tax-free

  • The benefit when you die is left to your spouse, heirs and successors as a tax-free benefit

  • Any income you take from your savings is only taxed on the interest element – not the cashing in of your capital

  • Instant access if required

  • Income if required, can be taken irregularly or on a monthly, quarterly, half-yearly or annual basis

  • No compulsory withdrawals if you don’t need them

Does such a scheme exist? Yes it does. If you’d like to know if you qualify for one please email me

QNUPS (Qualifying Non-UK Pension Schemes) were launched by the UK Government   and despite the term 'pension schemes' they are very different from UK pension plans. All of the six 'bullet' points above are available unlike a conventional pension scheme. You definitely need professional advice for these plans. email me to be referred to a correctly authorised adviser.

Financial Pages in Spain is a blog and website for British & Irish people who are expats or property owners in Spain. If you have a friend, neighbour or colleague who might benefit from this information please pass it on.

Recent posts;

Tax Avoidance and Tax Evasion

‘I thought about QROPS but it’s not for me’

La Torre Fx – Foreign Exchange, Q & A about this Service

Enjoy life in Spain!

David Goodall
Financial Pages in Spain

Thursday, 1 March 2012

February 2012 Review – Financial Pages in Spain

Topical issues

At the end of the calendar month, I thought I would reflect on the main issues and topics on ‘Financial Pages in Spain’ during February.

  • QROPS in 2012

  • Tax Avoidance and Tax Evasion

  • UK Pension Plans

These are the issues that contributed the most feedback. I’m always pleased to receive emails either to seek further advice or to comment on my articles.

Using the statistics provided by my service contractor, I can also indicate the most popular posts in terms of the number of people who visited the pages. They were, in order;

  1. QROPS in 2012

2012 is going to bring some momentous changes to the QROPS arrangements and rules. The draft regulations relating to QROPS published recently have the potential to completely change the QROPS landscape. It is becoming accepted that there is likely to be little by way of alteration to the draft regulations and QROPS jurisdictions are looking to adapt with effect from the 6 April 2012 implementation date.

I wonder now if HMRC will even get the new regulations published by 6th April 2012!

I shall use this Blog to continue to keep up to date as decisions are made or you can email me for something related to your own circumstances

  1. Tax avoidance and Tax evasion

      Tax Evasion - Definition
      Unlawful attempt to minimise tax liability through fraudulent techniques to circumvent or frustrate tax laws, such as deliberate under-statement of taxable income or wilful non-payment of due taxes.

Tax Avoidance - Definition
Lawful minimisation of tax liability through sound and perfectly legal financial planning techniques.

Whereas tax avoidance is legal, tax evasion is not. The subjects are covered in the following post;

  1. UK Pension Scheme but you live in Spain

The post lists 26 different types of UK pension schemes or plans and this does not include QROPS, QNUPS or Section 615 which are International plans. This shows how complex the whole subject is, and also why professional advice should be sought Email me to speak to a recommended adviser.

There are good solutions and everyone has their unique requirements. If you got a report and it looks like a mass produced document with your name included get a second opinion!

* * * * * * *

Financial Pages in Spain continues to grow, as I can see from the statistics. Whilst Spain and UK dominate the views of both the Website and Blog, there have been readers from many other countries including Germany, New Zealand, Malta and USA.

Any issues which arise can be answered on an individual basis if you email me. I’m happy to receive questions from anywhere but my real expertise relates to the UK and Spain.

I am happy to take suggestions from readers about future articles. Please email me with your own ideas or issues that you think need raising.

REMINDER from Financial Pages in Spain

I’ve owned property in Spain since 2002 and hate to think how much I’ve wasted on exorbitant bank charges on foreign exchange of the years!

So I’ve linked up for a new foreign exchange service. It is available in any major currency around the world but doesn’t offer cash transactions. This is a bank to bank arrangement and is priced to beat the major banks.

But you can test it for yourself! Get a quote from your normal supplier, and then get a quote from La Torre Fx.

Even on a transfer from the UK branch to the Spanish branch of my own bank, I made a big saving using La Torre Fx. It costs nothing to get a quote. But if it’s a better deal for YOU the application process is quite straightforward. Check here

David Goodall
Financial Pages in Spain