READERS' FAVOURITES

2021 - A YEAR OF MANY CHANGES

You've always needed PROFESSIONAL help, now it's vital

The year of the professional

‘Financial Pages in Spain’ provides information for English - speaking expats and Spanish property owners. Many changes are happening and have happened since the beginning of 2021 and it is ESSENTIAL that you only receive FINANCIAL ADVICE from suitably QUALIFIED and REGULATED individuals and firms. 

If you have ANY doubts, please ask EMAIL

Stay Safe

We live in difficult times and although face to face advice is not always available, modern technology allows the advice process to continue. I can still refer the readers of 'Financial Pages in Spain' to a suitably QUALIFIED and correctly REGULATED Financial Adviser.

The most popular posts over the last month were;

    

               UK Pension Transfers, QROPS & ALTERNATIVES

                           Hidden Costs & Charges

              Getting Best Advice  

                    Foreign Exchange beating the banks   

                     Misplaced & Lost UK Assets- £ Billions

Make sure you get good advice from an Independent, Regulated and Qualified financial adviser. I can introduce you to a suitable adviser who has passed my 'DUE DILIGENCE' test, please ask  EMAIL

1. UK PENSION TRANSFERS

QROPS and Other Alternatives

If your adviser doesn't consider alternatives to QROPS the you have the WRONG adviser! A bold statement but very true taking into account the changes in 2021. Then of course looking at ALL of your options is in your interests. You make the best decision for you

         UK Pension Transfers

2. FOREIGN EXCHANGE

Money Transfers – Beating the bank

Money Transfer - ONLINE, at the time YOU need it Even though personal movement is difficult, you still may need MONEY TRANSFERS. Please give this excellent service a try.

The post is OFTEN the most popular post in the month. With current foreign exchange rates very volatile and record lows of sterling, this is a GREAT PLACE to make a comparison and to By-Pass YOUR bank.

This excellent service, with rates to beat the banks and high quality customer service, by linking to the very best Foreign Exchange Platform – Currency UK Global. The service offers great rates on all major currencies

        Money Transfers – Foreign Exchange

3. GETTING BEST ADVICE

Qualified, Regulated and Experienced advice

It would be impossible on ONE page to list all of the changes brought about by UK leaving the Single Market and Customs Union These are just a few of the subjects where there are significant changes;

* Your relationship with you bank

* Your UK pension

* Your UK savings plans

* The regulations & qualifications your adviser MUST hold 

* Plus many more

I guarantee to refer you only to the correctly regulated, have UK and Spanish experience and hold the qualifications needed.

        
      Best Advice

4. HIDDEN COSTS & CHARGES

It’s worth checking if you are paying TOO MUCH for charges attached to financial & pension products.

However, if you have a personal financial adviser, who constantly gives ongoing good service, they will explain and deserve payment. But please make sure there are no charges deducted where no service is given and especially if they were NOT DISCLOSED

·         Hidden Charges

5. MISPLACED, FORGOTTEN & LOST ACCOUNTS

There are £ Billions awaiting rightful owners in the UK

The most common reason for mislaying assets is change of address. That of course will apply to the vast majority of expats.  It only takes about 5 or 10 minutes to check and even the most careful can find misplaced funds!

There are many different types of funds you might find, including shares, pensions, National Savings inc Premium Bonds, bank accounts, Building Society savings and much more. Please check the links in my post

·         Lost accounts

If I can help, I gladly will – Financial Pages in Spain is an INFORMATION site with NO ADVERTS

​David 

David Goodall

My Email

Financial Pages in Spain

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For wealth & health Stay Safe

UK Pension Transfers including QROPS

UPDATE:

This article is about UK Pension Transfers and NOT JUST QROPS.

So many changes have taken place, not just through BREXIT but for many other reasons too. One thing I must bring to your attention immediately:

If you were only offered QROPS and no alternatives, you have the WRONG ADVISER!

What are your future plans?                          Where are your pension funds?

When do you need income?                           What are your family circumstances?

What type of pension do you have?              Is this best for you?

Plus many other questions the adviser will discuss with you, must be discussed before a recommendation is made and you make the decision BEST FOR YOU. Always feel free to ask YOUR questions too.

QROPS may be best for you, but equally, it MAY NOT

This is one of my recent blogs which warns about getting misled by newspaper adverts:

  As it appeared on Twitter     

 DON'T BE MISLED Financial Pages in Spain: http://ow.ly/NLbm30rp9f3 Newspaper 'articles'             which are really ADVERTS #financial #pensions #Spain BEWARE Misleading & biased                     'information'

2021 Brings many changes

I am recommending readers of Financial Pages in Spain to get ADVANCED qualified advice and CAN and WILL recommend the RIGHT adviser.  EMail me to get the appropriate advice, on a personal basis.

I guarantee that you will be given only REGULATED advice, from an adviser with the CORRECT pension qualifications and very importantly, lots of experience IN SPAIN, if you contact me. Brief details by email are the best starting point, there is NO OBLIGATION and a guarantee of no up front charges.

There is lots more information before you can make up your mind and your questions WILL BE ANSWERED. Now is time to 'start the ball rolling'. REMEMBER, YOU have choices

 

David Goodall

Financial Pages in Spain

davidgoodall.spain@gmail.com

P.S. If your adviser doesn't consider alternatives to QROPS the you have the WRONG adviser!

Further Reading

Scam Watch Just say NO to cold calls

Professional Advice Always best

Foreign Exchange beating the banks on bank transfers!

Tax avoidance and Tax evasion 2019 Update

Written in June 2019, sometimes interesting to look back!

These subjects have been made relevant from Spanish and UK Budgets in the past decade where  part of the Governments’ increased revenue will come from tackling Tax Avoidance and Tax Evasion. One of the problems I have with the subject is that in speeches politicians often confuse tax avoidance with tax evasion. This matters because Tax Evasion is already illegal. Closing down Tax Avoidance is in the hands of Parliamentarians to change. One way to do this would be to accept Anti Tax Avoidance Directive EU 2016/1164 which has five legally-binding anti-abuse measures and all Member States should apply against common forms of aggressive tax planning. 

Leaving the EU has definitely favoured the UK's billionaires and fellow travellers!

The five anti-abuse measures are;

Controlled foreign company (CFC) rule:  to deter profit shifting to a low/no tax country.
Switchover rule: to prevent double non-taxation of certain income
Exit taxation: to prevent companies from avoiding tax when re-locating assets.
Interest limitation: to discourage artificial debt arrangements designed to minimise taxes.
General anti-abuse rule: to counteract aggressive tax planning when other rules don’t apply.

IMPORTANT;

• Avoidance and evasion are not the same
• Downright favouring the wealthy is a political decision
• Tax avoidance in many cases is legal BUT over aggressive tax 'planning' CAN affect both the EU internal market and tax liabilities e.g. Profit 'shifting' 
• Tax evasion is illegal but needs effective and efficient COLLECTION systems

       

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.

Whereas tax evasion is an offense (punishable by both civil and criminal penalties), tax avoidance is not.

Whatever politicians or the newspapers say there are no extra legal powers needed to stop Tax Evasion – it is illegal. Though HMRC in the UK and La Hacienda in Spain have to do MORE to stop it and COLLECT the tax.

If you need advice or have a query please email me

Examples of Tax Evasion

• Being resident in Spain but not declaring income to the tax authorities the extent of which is now coming to light
• Not declaring income from property letting
• Spanish resident having an Individual Savings Account in the UK and tax free interest
• Not declaring gross paid interest on offshore accounts
• Wilful refusal to pay tax

Tax Avoidance – Definition

Lawful minimisation of tax liability through sound and currently legal financial planning. Parliament could stop this

I am quite happy to answer any queries you may have but I will refer you to an adviser for authorised and regulated advice, if you email me

Examples of Tax Avoidance

• Pension schemes are legitimate and avoid tax but contributions and benefits have to be within HMRC rules and importantly, limits.
• UK residents having an Individual Savings Account
• QROPS for UK non-residents or intending non-residents
• The legitimate use of offshore trusts to hold assets but not if covered by EU 2016/1164
• The establishment of Trusts or Foundations for charitable purpose

Most Tax Avoidance in the EU is legitimate, subject to EU 2016/1164!  

• In the UK there was an ‘industry’ which looks for ways of creating Tax Avoidance. It is up to the Government and especially HMRC to make sure that the tax rules and laws are not circumvented. It is also possible in the UK to negotiate a deal with the Government or HMRC. This, of course, favours the super wealthy!

* * * * * * *

You can write to me with your personal experiences, ask me a question or to be put in touch with one of my recommended adviser by sending me an email

Linked with this post are two recent articles from my Blog;

Qualified, Regulated and Independent Financial Advice
http://expatsfrombritain.blogspot.com/2019/05/financial-advisers-must-be-qualified.html

Interesting, even in 2021?

Tell me your experiences, write to me by email

David Goodall

Financial Pages in Spain

Email: davidgoodall.spain@gmail.com

Explaining terms and expressions - Investments

Explaining terms & expressions is important but nothing beats Regulated and Qualified Financial Advice

·       Cut through the jargon

·       Check Further Reading

·       Beware: Unauthorised ‘advisers’ about!

Asset allocation

This is the spread of investments across the asset classes.

Asset classes 

The underlying investments – for example, shares, bonds, property and cash deposits.

Bonds These are loans made to a company (often called Corporate Bonds) or the Government (often called Gilts).

Capital
The money you invest.

Capital growth
Any increase to your original investment after costs, charges and depreciation have been taken into account.

Collective investment scheme
A way of pooling contributions from lots of people into a single investment fund.

Contracts for Difference (CFD)
An agreement between two people to settle at the close of their contract the difference between the opening and closing price of a company's share price.

Cooling off period

A cooling off period is defined as the period of time you're allowed, after signing an agreement, to cancel it without incurring a financial penalty. This does not normally apply in Spain.

CNMV

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

Coupon
A bond's fixed rate of interest as a percentage of its nominal value.

Debt securities
Another name for a bond.

Derivatives A right or an obligation to buy or sell another type of asset – such as a share or a bond – to someone else at a specific date and time in the future.

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.

Diversification
Spreading your investments across different asset classes, or different types of investments within an asset class

Equities
This is another name for shares in companies.

Friendly Societies These are similar to mutual life assurance companies but with different tax rules.

FCA 

The Financial Conduct Authority - the UK's financial services regulator.  For a recommended adviser click here

Gearing The use of borrowing potentially to increase the amount you get back, but can also increase the risk.

Gilts

These are bonds issued by the Government.

Gross

Before tax has been deducted (as opposed to 'net', which is after tax has been deducted).

High-yield bond funds
The same as bond funds but investing in higher-risk bonds that offer a higher interest rate.

Investment or Insurance Bonds
These are pooled investments or lump-sum life-assurance investments. They can also be called Life Assurance Bonds and With-Profits Bonds.

Investment Trusts
A pooled investment. The investor is buying shares in a company that invests in other investments. The Investment Trust has shares and is quoted on the stock exchange. It is a closed-ended fund as there are a set number of shares available

ISA
Individual Savings Account is a UK tax-efficient way of saving or investing, with limits on how much you can pay in each tax year. These are not available to UK non-residents.

Life assurance investment
A pooled investment offered by a life assurance company.

MiFID

Markets in Financial Instruments Directive is the EU legislation which covers investment intermediaries and their activities. It also enables, for example FCA approved advisers to be' passported' into other EU countries such as Spain

Net asset value (NAV)
An expression used with investment trusts to mean the value of the fund's underlying assets.

Nominal value
Sometimes called the face value; this is the cost of the bond when it is issued and the amount you get back at the end of the term.

OEIC

Open-Ended Investment Company, this is a type of open-ended investment fund.

PEP 

Personal equity plan – a wrapper for investments. No longer available as all PEPs have now automatically became stocks and shares ISAs.

Pooled investments
A way of putting various levels of contributions from lots of people into a single investment fund. There are different types and they work in different ways.

Rate of return
This is the change in the value of your investment taking into account both income and growth.

Rating
This is a formal opinion of an organisation's investment quality and credit risk.

Redemption date
Usually associated with gilts or bonds, it is the date (set in advance) when the gilt or bond will be repaid by the issuing government or company and you will receive the nominal value of the bond.

Shares
These are the stake or share in a company.

Stocks

These are often linked directly to Shares, but have the same meaning.

Tax year
In the UK, the tax year is from the 6thApril in one year to the 5th April in the next year. In Spain the fiscal year is the same as the calendar year

Unit trusts
A pooled investment, which is an open-ended investment that gets bigger as more people invest and smaller when they take money out.

With-profits funds
A type of fund available within a life assurance investment. The investor shares the return from these investments and the profits and losses of the company (if it's a mutual) or the with-profits business fund (if it's a plc).

Most Investment Advisers, including the ones that I recommend, will be happy to cut through the jargon. Email me for a recommendation.

David Goodall

Financial Pages in Spain

EMail

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 6^th April 2013, for people reaching the age of 65, the age allowance is scrapped! This means that anyone born after 5^th 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;

QROPS 2014

QNUPS 2014

Rent before you Buy

The Best Value for Money

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

Email: davidgoodall.spain@gmail.com

Spanish ISD and UK IHT - Comparison

As the old saying goes ‘Like chalk and cheese’

• Impuesto sobre Sucesiones y Donaciones (ISD)

• Inheritance Tax (IHT)

• There is no Double Taxation Treaty or Agreement between Spain and the UK on these inter-linked but very different taxes

This will only be a short article because it is vitally important that you get Professional Advice

What are the principal differences?

	Spanish ISD	UK IHT
Married Couples: When is tax payable?	On First Death	On Second Death
Are Rules applied Nationally?	There are Regional differences but these only apply to Spanish residents. Non-residents only get National rules	Yes, all rules are based on a set of UK laws
Who pays the tax?	The beneficiaries pay any tax due	The Estate of the Deceased pays any tax payable
Does the tax rate change according to who is the beneficiary?	Yes	No
Who pays on what assets?	Spanish resident beneficiaries pay on worldwide assets, whilst non-residents pay only on Spanish sited assets	UK domiciled deceased Estates pay on worldwide assets. Residency is NOT an issue
Will Tax Planning reduce or eliminate the tax payable?	Yes	Yes

Please note that only one answer is common to both ISD and IHT. Tax Planning is vital

Additional reading is also recommended;

ISD in more detail

Spanish Inheritance Tax

Five Spanish Taxes affecting Non-Residents

Non-Resident Taxes

Please email me with any query you may have or to be referred to a Specialist Professional for advice

David Goodall

Financial Pages in Spain

davidgoodall.spain@gmail.com