Thursday, 29 November 2012

IMPORTANT : Spanish Non-Residents Tax Alert

I have received information from two trusted sources that the Spanish tax authorities promised clampdown will start to affect property owners IMMEDIATELY

For background there are two of my previous posts which are worthy of consideration

  • Tax Avoidance and Tax Evasion

  • Five Taxes which affect Spanish Non-Residents

Putting together the information I have the timeline appears to be as follows;

  • In late 2011 and early 2012 the tax office identified approx 250,000 houses from which no taxes were being received. Using local records, including the Town Halls and Land Registry, the owners have been identified

  • Recently bills have been prepared and will be sent out en masse for maximum effect before the end of 2012. These bills are for tax due in 2011, in accordance with the normal payment arrangements. However, they also have authority to collect a further 4 years if this was not paid.

Non-Payers can therefore expect bills dated back to 2007 with non-payment penalties added.

  • For those who continue to wilfully non-pay, action will be taken to take the funds from bank accounts or where there are insufficient funds, to FREEZE BANK ACCOUNTS

They know your bank accounts because the banks complete an annual return on all accounts held by Non-Residents. In fact the Bank probably charges you for the privilege!

What can you do about it?

Pay your non-resident taxes is the obvious one

Also check with your Fiscal Representative that your tax has been paid. If you don’t have a representative, I can put you in touch with one for your area if you email me and let me know where your property is.

A final warning

One reader told me that he was quite relaxed and didn’t intend to pay the tax until something happened to change his mind. He received a bill from the Spanish tax office to his UK address.

If you can add to this topic, I’d be delighted to hear from you

David Goodall
Financial Pages in Spain

Friday, 2 November 2012

QROPS – Developments & the Future

QROPS Week - Day 5

The last article of QROPS Week deals with the future. QROPS will remain but will they change again? We already know that there are proposals for the Finance Act 2013 but details are sketchy and open to lobbying and change

April 6th 2012

Qualifying Recognised Overseas Pension Schemes (QROPS) started in 2006 and by April 2012 needed an overall and updating. In many peoples minds the ability to take 100% cashout was an abuse of the principle of ‘an income for life’ which underpins pensions, generally.

To make it absolutely clear and to contradict adverts I have seen there is no longer an opportunity to use QROPS to withdraw 100% as cash.

Another major change was an abuse, as the UK Government and tax authorities (HMRC) saw it, of jurisdictions constructing local tax regimes to attract QROPS. Now, they have to treat local resident members the same as non-residents.

The effect of these changes, along with other detailed requirements, have changed QROPS.

I would like to look at the affect on some jurisdictions and speculate on how this could change in the future.


Without question, from the commencement of QROPS until April 6th 2012, Guernsey was the market leader in QROPS. Guernsey acted quickly in 2006, to establish the right environment for QROPS, and its industry grew very quickly. HMRC however was always concerned that the local tax regime had been constructed to attract QROPS and when the 2012 changes were made, Guernsey had over 300 schemes removed from it’s approved list.

Whilst it is known that Guernsey is working hard with HMRC to get QROPS re-instated, it is by no means sure that they will be successful.


Long before April 2012, Gibraltar had voluntarily withdrawn from QROPS over concerns about the taxation of pension income. These concerns have been overcome through direct negotiations between local officials and HMRC.

There is currently a limited choice of providers but there are schemes up and running. The position of Gibraltar is interesting to expats in Spain. There is a two-fold debate that I’ve heard;

Gibraltar is convenient, we like the territory and as long as the scheme is approved we are happy with it
There is no way I’m taking my pension income from Gibraltar and reporting it on my Spanish tax return.

Email me if you have a view or want to know more about Gibraltar QROPS.


Soon after April 2012, Cyprus had all of its QROPS removed by HMRC from the approved list.

Unlike Guernsey, it is more likely that terms will be agreed to enable Cyprus QROPS to be re-established. Membership of the EU is likely to prove crucial.


The 2012 changes have worked to Switzerland’s advantage. There is a tax deduction on proceeds for both residents and non-residents. As one of the world’s leading financial centres, Switzerland did not need to ‘construct’ a QROPS industry. In keeping with its general philosopht, they want high value, high quality cases and NOT the volume which proved the attraction to other jurisdictions.

More details are available from the QROPS Week series, please refer to Switzerland Also don’t hesitate to contact me for more information but I will need to pre-check some personal details, as the Swiss are very selective!

New Zealand

Before April 2012, New Zealand was best known as a jurisdiction which allowed 100% cashouts. HMRC received much lobbying from other jurisdictions to unapprove all of the New Zealand schemes.

But New Zealand changed its own rules to comply with HMRC, and has now a QROPS philosophy which is generally well accepted. Some of those who campaigned AGAINST New Zealand, have seen their own schemes unapproved. Irony!

The Future

QROPS has a future! At this time twelve months ago, I wasn’t so certain. April 6th 2012 changes have brought quality to the market and although there will be changes ahead, I think the future is more secure.

But I caution against procrastination as changes cause uncertainty. Better to act now than to risk that the scheme you want disappears. Email me for personal information.

If changes are announced in the UK Autumn Statement, on December 5th, I will publish them here.

David Goodall
Financial Pages in Spain

Thursday, 1 November 2012

QROPS 2012 – Comparing jurisdictions

QROPS Week Day 4

New Generation QROPS 2012 have changed the face of UK Pension transfers to Qualifying Recognised Overseas Pension Schemes but the inclusion of professional advice and the exclusion of ‘cashout’ schemes have improved this valuable arrangement for expats

As a result of the changes, there are now three major options, which are covered in QROPS Week, with a further fourth option which is relatively new, also covered here;

Malta has four distinct advantages when dealing with British and Irish clients, especially those who become residents in Spain.

  • Malta is an English speaking country
  • A low cost economy
  • A member of the European Union
  • Retirement income can be taken at age 50

After many months of negotiations, Malta as an established Financial Services Centre was given approval by HMRC to offer QROPS in November 2009. Individual trustees then need to get approval from the Malta Financial Services Authority (MFSA). It was not until February 2010 that the first QROPS were approved. Without question, Malta benefited most from the rules changes which became operative from 6th April 2012

I can recommend an adviser if you email me.

Switzerland is a renowned centre for financial services, with security at the heart of it’s offering. There is one aspect of Swiss QROPS which could be seen, depends on your opinion, as either an advantage or disadvantage. The QROPS must be invested 70% in Swiss funds and held in Swiss Francs.

Funds are invested by a Discretionary Manager based in London, regulated by the FSA.

Membership of QROPS in Switzerland is highly restrictive, but for those who qualify and prefer the Swiss franc to euro or sterling, this maybe an excellent choice

·       Minimum fund of SwFr 100,000 (work on £66,000)
·       Retirement from age 55 to aged 70
·       Must be UK non-resident for five or more complete UK tax years
·       Withdrawals taken as lump sum

Though not a member of the EU, Switzerland has many close, financial, connections with UK, Ireland and Spain. Most importantly Double Taxation Agreements are in place.

Due to the EXCLUSIVE nature of the Swiss QROPS offering, I can deal directly with clients, who will be referred to the authorised adviser. Please email me for further information

Gibraltar has approved QROPS but is still relatively new. At present, this option is developing and I expect to give more details soon.

I’m happy to provide information on an individual basis if you email me

New Zealand remains a viable and strong option for QROPS. Please note that since 6th April 2012 full encashment is not possible.

The principal benefits which New Zealand enjoys are;

  • Tax Free Lump Sum is 30% of the Fund Value
  • Flexible income arrangements, as long as the 70% available for income rule is maintained
  • Tax Free investment portfolio which is ‘flexible’

As always, individual circumstances will dictate, but flexibility is certainly a realistic jurisdiction to consider. Email me to have access to professional advice

Non-UK Nationals

I am aware that people of many nationalities have, from working in the UK, preserved benefits. Good news – you do not have to take benefits when the scheme says so. You may also be entitled to a UK pension transfer to QROPS. Just email for more details.


Many advisers will compare all jurisdictions before making a recommendation. The determining of your priorities should be the overriding reason for recommending a particular QROPS. Some advisers only deal with one provider in one jurisdiction. If you’ve received a recommendation and would like a second opinion please email me.

Qualifying Recognised Overseas Pension Schemes (QROPS) are for professional advisers and their clients and hopefully the unqualified, unregulated imitators will disappear.

I guarantee that you will be given only REGULATED advice if you contact me (with brief details) by sending me an email

David Goodall
Financial Pages in Spain