Wednesday, 19 March 2014

The UK Government wants the Elderly to Emigrate!

There are clear indications that they do. Changes to ISA’s & Pension Annuities will be welcome in the UK, to working people and the retired but overall it suits the Government if the elderly emigrate

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 emigrate for the following reasons;

·       QROPS

Qualifying Recognised Overseas Pension Schemes are for the BENEFIT of people emigrating or planning to emigrate from the UK.

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

Whilst the new rules which, effectively, abolishes annuities will be welcome in the UK, QROPS which follow UK rules will also provide a benefit to UK expats too!

There is nothing which discourages retiring abroad. Please email me for more personal information

·       QNUPS

Qualifying Non-UK Pension Schemes benefit those who emigrate but would otherwise have a UK Inheritance Tax liability. It is necessary because UK IHT is based on ‘Domicile’ not ‘Residency’. Domicile is much more difficult to shake off!

This is a classic case of ENCOURAGING emigration. For more details please email me.

·       Taxation policy

I was somewhat shocked by George Osborne’s statement in Budget 2012 that there would be a review of age-related tax allowances. In reality the budget made 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 following 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 when income is based on a pension or annuity.

  • 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. I cannot verify this but I was told that the cost of Healthcare for the over 60’s is TEN TIMES HIGHER than the under 60’s.

  • Net Migration

The UK Government made pledges that it would reduce net migration, that is the difference between people leaving and immigrants.

This is important to the Conservatives under pressure from UKIP.

It suits the Governments statistics if more people emigrate.

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;

Please enjoy Spain and remember if you are in the UK and elderly, your Government wants you to emigrate!

David Goodall
Financial Pages in Spain

Sunday, 9 March 2014

Rent Before You Buy in Spain

It makes sense and gives you access to greater opportunities

There is a movement towards 'Rent before you Buy', in the Spanish housing market, not just for caution but also to ‘live the dream’ and find the best location and home. You should also get to know local practices and start to learn the language! I would be happy to send you any information on financial information if you email me.

· Sample the lifestyle

· Reduce the risk

· Find the most suitable property

This is a list of essential things you must do but it is not meant to be exhaustive.

1. Check that the landlord is the owner

To avoid dispute, you could consult the archives of the Land Registry. However,the owner can do this simply by showing the ‘Nota Simple’ which is a Land Registry certificate confirming the owner. 

2. Clarify fees and charges

Often, the letting of a property is done through an Agent. It is important to ensure with the owner of the property who bears the agent's cost. Establish clearly if the rent is paid directly to the owner or to the agent.

3. Negotiate

The rental market has changed in recent years and many homeowners who can’t sell their second home choose to rent it. Sometimes they prefer to receive a price somewhat lower than keeping it empty, but in general want a tenant to give them some security.
If the applicant meets the profile of a careful owner, there is often room to negotiate a fair rent.

4. Don’t make a verbal contract

The law allows verbal contracts but from the point of view of both owner and tenant, it’s a dangerous scenario. Memories change, relationships get strained and problems can arise.

5. Read the contract

It is one of the errors most frequently committed is to assume that the terms included are those which have been agreed beforehand or that they are ‘standard in Spain’. Always seek clarification and make sure you understand the terms

6. Sign all the sheets

Lawyers and real estate experts recommend signatures on each of the pages and schedules listed in the contract and not just in the first or last. This will prevent changes being made ‘post-contract’

7. Check the house for damage/faults

Sometimes the property you are going to rent is not in the very best condition but has cracks, damage or faults that can be ‘lived with’. These should be reflected in the lease, the landlord may refuse to make the arrangement once the tenant is already in the house. What's worse, some time later, is later conflict over the responsibility.

8. Inventory check

Likewise it is necessary to record the condition of the property, the contract should include clear, in an annex, the furniture, appliances, fixtures and fittings and their physical condition.
Make clear if the house is furnished, semi-furnished or unfurnished. This prevents the tenant after being blamed for having broken a device that was no longer in optimum condition and the owner is covered if there is something missing.

9.  Don’t leave anything to chance

The contracts should not leave anything to chance and everything should be reflected. It is worth anticipating all reasonable circumstances and ensure these are covered in the contract

10. Check everything that’s included or excluded

This is particularly pertinent to payment for services. The contract should cover all of the following, if pertinent;

Water, Electricity & Gas                 
Community or other Local charges
Taxes, but notably, IBI (Real Estate Tax) and IRPF (income Tax)

11. Avoid high deposits

Normally, one months deposit and rent paid monthly in advance should be seen as acceptable to both parties. There may be some concern when owners ask for high deposit.

12. Rent

Once the rent has been negotiated and agreed, it is important that the contract confirms the exact payment terms.

  • The day of the month that payment is made
  • The method of payment, preferably by bank transfer
  • The agreed currency. I know this seems odd, but if landlord and tenant are both British an arrangement could be made in sterling though clearly in Spain the payment should be in euros.

I also recommend that you have a copy of my post ‘Comprehensive List of terms and expressions translated Spanish to English’ which can be obtained from;

David Goodall
Financial Pages in Spain

Tuesday, 4 March 2014

Professional Advice - Always Best

Regulated, Qualified and Professional Advice

If you need advice, please email me.

My own connections included the following professionals;

  • Regulated financial advisers
There are many people and organisations who call themselves ‘financial advisers’ without any qualifications and no regulatory body such as FCA (UK) or DGS and CNMV (Spain). I will only recommended regulated and fully qualified advisers who’s services I have checked.

Value for money comes from open and clear commissions and charges declared in an honest way. Hidden charges and undeclared commissions should always be avoided. For a referral to a suitably qualified & regulated adviser, please email me.

All advisers I refer HAVE been checked

  • Suitably qualified accountants and professional lawyers
Both the Institute of Chartered Accountants and the Law Society have qualified professionals working in Spain. Whilst you may have a good local source for advice, the professional standing of these people cannot be denied. If you need a referral, please email me.

You are further protected as all qualified professionals will carry ‘Professional Indemnity Insurance’ (PI) just in case anything goes wrong.

Unless your situation is very complex, I would expect most professionals to give you an estimate of costs upfront.

  • Chartered surveyors in Spain
Similarly, I can recommend UK qualified Surveyors. Please email me to be referred

  • Estate Agents
This is an area of service which is by definition very local. You could already know of a local estate agent with a good local reputation. If this is not the case I can recommend you to a Member of the Association of International Property Professionals.

  • Company formation for property ownership
This is a very specialised service and is often used to save on Spanish Inheritance Tax (ISD). There is a service on my blog under the heading ‘Check your Spanish Inheritance Tax Liability’ to the right of this article.

The service involves the formation of a UK company to own a property in Spain. It involves UK law for the formation of the company and Spanish contracts, translations and knowledge of Spanish law. For this reason, the company concerned has offices in both UK and Spain.

  • Foreign Exchange
I set up La Torre Fx – Foreign Exchange with the specific objective of beating the banks. This is a service and it is worth checking out, with easy access on the right of the blog.

La Torre Fx – Foreign Exchange is linked to a highly professional ‘trading platform’ provided by FTT Global. All of the necessary regulations are in place;

Key Facts about FTT Global:

·        Registered in the United Kingdom - Company Number 5685288
·        Regulated by FCA - Registration Number 503228
·        Regulated by HMRC - Registration Number 12231114
·        Registered for Client Data Protection - ICO Number Z9470988
·        Underwritten by A Rated Insurer
·        Corporate Bankers - Barclays Bank PLC
·       Get the best rate today

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