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

Five Spanish Non-Resident Taxes

For many of my regular Spanish resident readers there are elements of this that will not apply but I was writing specifically for a non-resident audience. It equally applies however to non-residents who have already purchased. By all means, email me if you want more detail.

To begin I’ll list three common myths that are wrong. These have all been said to me or written to me;

• ‘I’m not liable to Spanish Inheritance Tax because I’m not a resident’ – wrong
• ‘I live in the UK and pay my taxes to the tax office in Salford Quays. I have a house in Spain but I’ve no need to pay Spanish taxes’ – wrong
• ‘The people who rent my Spanish house pay me in pounds so I don’t need to pay Spanish tax’ – wrong

The following is the leaflet contents I referred to earlier;

There are 5 key taxes most applicable to non-resident property owners.

Income Tax

Every non-resident owner of a Spanish property has to pay an annual tax to account for their "share" of the property. Although it's called an "income tax" it's not actually based on your level of income, but on a "deemed" or "notional" income, which is a percentage of the rateable value of the property multiplied by the non-resident tax rate of 24.75%.

This tax is based on the calendar year and is always due within 12 months of the end of the tax year, so for the 2020 tax year, tax needs to be paid before 31st December 2021.

Property or IBI Tax

Property rates in Spain is referred to as IBI and, like the UK, this tax will be levied by your local council in Spain. The council will assign a rateable value to your property and then your rates or property tax will be a % of this amount. The % will depend on your council, but in most cases it will be somewhere between 0.5% and 1%. So if you had a rateable value of €50,000 and your local percentage was 0.75%, then your annual rates bill would be €375.

This tax is also based on the calendar year but will normally be payable between June and September each year, again this will be dependent on your local council.

Rental Income Tax

Up until the end of 2009, rental income tax was 24% of the gross income you received on any rentals. So if you generated €1000 by renting out your property, then you would have to pay €240 in tax. You could not offset any expenses - i.e. cleaning, utilities, insurance, mortgage interest, marketing, management fees etc.

However, since January 2010, the rules have changed, which means that you can now offset expenditure when calculating what income, or effectively profit, will be subject to tax of 24.75%.

In theory rental income tax returns need to be submitted each quarter, to account for income received in the preceding 3 months

Capital Gains Tax 

When a non-resident owner sells their property, they will make a capital gain or a loss upon the sale, which is the difference between what they paid for the property and the proceeds of the sale. The buyer of the property should always withhold 3% of the sales value and pay this to the Spanish tax office as an "advance" of the buyer’s potential capital gains tax. It is then up to the buyer to calculate their gain or loss, and if a gain has been made this will be subject to 21% tax. The buyer should pay the 3% within 1 month of the sale date, and the seller then has a further 1 month in order to submit their calculation of a gain or loss and the corresponding tax returns.

Inheritance Tax

Inheritance tax for non-residents is a tax on the beneficiaries and not on the deceased as it is in the UK. The tax rates themselves can vary depending on the relationship of the beneficiaries to the deceased, the amount that is being gifted, their age, and even their wealth in Spain and in the very worst situation tax rates can reach levels of 81%!

The other major issue for UK people is that transfers between husband and wife in Spain are not tax exempt as they are in the UK, so if a spouse were to die, then the surviving spouse, in most cases, will need to pay inheritance tax (as well as probate) in order to take on the additional 50% share of the property.

It will normally take approximately 6 months to deal with the probate issues in Spain and pay any outstanding inheritance tax, before the property deeds can then be altered.

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. This requires SPECIALIST advice.

* * * * * * *

This is a very basic outline of taxes in Spain, applying to non-residents. Both residents and non-residents are always encouraged to seek professional advice.

Email : davidgoodall.spain@gmail.co.uk

Facebook : https://www.facebook.com/financialpagesinspain

Twitter : @davidgspain

Website : http://www.financial-pages-in-spain.co.uk/

Blog : http://expatsfrombritain.blogspot.com/

You will note that the leaflet does not contain the Spanish titles of the taxes, as it is aimed at a UK audience. 

Further reading recommended, includes the following;

Scam Watch Just say NO to cold calls

Professional Advice  Legal, Tax and Property advice is always best

Money Transfers – Foreign Exchange  beating the banks on bank transfers!

Please email me if there is anything I can help with.

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

Getting Professional Advice

IMPORTANT : I never recommend advisers who charge up front fees

Follow Financial Pages in Spain

This is one of the major issues affecting British and Irish expats and property owners in Spain. On first view it may not look ‘major’ but I know from emails received that it certainly is, especially if things go wrong.

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

• Hearsay. The classic quote I hear so often is ‘I heard somewhere  ……’ What often follows is either wrong or out of date!

• An unauthorised, non regulated and unqualified person or company who call themselves an ‘adviser’. Always ask about their qualifications.

• 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? If you think that cost might be a problem, ask up front! I am playing my part in establishing why expats should always get PROFESSIONAL advice, whilst at the same time convincing professionals that their advice should represent VALUE FOR MONEY.

Apart from owning property in Spain for ten years and originally struggling to find professional advice, in the last year and a half through my Blog I have found many professionals. If you need advice, please email me.

My own connections included the following professionals;

• Regulated financial advisers
• Suitably qualified accountants
• Professional lawyers
• Chartered surveyors in Spain
• Members of the Association of International Property Professionals (AIPP)
• 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.

Never trust Unauthorised Advisers

I always recommended qualified and regulated advisers

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

davidgoodall.spain@gmail.com

PS

Testimonial

 "I stumbled across David's blog one Sunday afternoon when looking for advice on living and working in Spain. 

Each post encouraged me to email him for advice, so I did. However, imagine my surprise when I got an answer a few hours later. Don't forget this is a Sunday! He's referred me to a specialist who sounds like she can help.

Thanks again David.

Al Elliott, Manchester, UK ' 

April Review 2012 - Financial Pages in Spain

Topical issues

At the end of the calendar month, I like to reflect on the main issues and topics on ‘Financial Pages in Spain’ during April 2012. The issues which were most read during the month covered these subjects

• New Generation QROPS 2012

• Professional Advice

• Tax Avoidance and Tax Evasion

These are the issues that contributed the most readership. 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. New Generation QROPS 2012

Major changes have been made by the UK Government to the rules and regulations about Qualifying Recognised Overseas Pension Schemes (QROPS). Though only formally announced on 21^st March 2012, these changes became effective from the start of the new UK Tax Year on 6^th April 2012.

New Generation QROPS shows more detail.

     

2. Getting Professional Advice

I have been contacted by three expats in Spain who have been victims of appalling advice, bordering on fraud. Had these cases happened in the UK I would have referred them to either the Financial Services Authority (FSA) or the Financial Services Ombudsman.

But Spain is different and largely unregulated. It is still possible to get properly authorised and qualified advice.

     

I regularly refer readers of Financial Pages in Spain to authorised advisers that I have checked out.  Please email me for a referral

I deal, not just with financial advisers but also the following professionals;

·                                             Suitably qualified accountants

·                                             Professional lawyers

·                                             Chartered surveyors in Spain

·                                             Property professionals (AIPP)

·                                             Company formation for property ownership specialists

Getting Professional Advice is the detailed post.

3. Tax Avoidance and Tax Evasion

Question : What is the difference between Tax Avoidance and tax Evasion?

Answer : A prison cell

Somewhat dramatic but since tax evasion is illegal and can lead to a prison sentence (in Spain, Ireland or the UK) it is well worth remembering. Tax avoidance, though not illegal does sometimes come into sharp focus, as organisations seek to find loopholes in legislation.

Tax Avoidance and Tax Evasion is the detailed post, including definitions

* * * * * * *

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, France, Malta and Canada.

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

Thank you for previous feedback and requests for referral

David Goodall

Financial Pages in Spain

davidgoodall.spain@gmail.com

Successful and Sound Financial Planning in Spain

February 2012 : This was written in September 2010 but the principles are still the same now.

• Carefully consider your objectives
• Regulations in Spain are less strict, beware unregulated advisers
• Insist on clear and unambiguous charges & commissions 
• Understand your own ‘attitude to risk’
• Get all advice in writing

Let me also bring your attention to some items, which in my opinion often lead to inaccurate, misleading and false information. My three least favourite comments are;

1. ‘It was in an advert in a newspaper’

The content of an advertisement is not necessarily accurate

2. ‘I heard somewhere that……..’

Hearsay, conversations in bars and rumours are notorious in giving misleading advice

3. ‘They are a well known company, they must be good’

Just never make that assumption, do your homework and find out for yourself or ask me for a recommendation

Financial Planning is not an exact science and you would be amazed how many people with very different circumstances and different objectives are sold an ‘off-the-peg’ solution. Many financial advisers are in effect product salesmen. Beware 

If you want to be recommended to an adviser who will talk to you about your objectives please email me.

If the adviser does not provide clearly and openly what the charges are, it begs the question ‘What has he or she got to hide?’ It has been Financial Services Authority (FSA) policy in the UK for open disclosure of charges and commissions since 1993. Yet even FSA authorised advisers in Spain often do not disclose all charges and commissions. I see no reason why a table of charges should not be clearly set out in writing.

Good advisers are always happy to be open and will answer your requests in writing. If you would like to be recommended to an adviser please email me.

In my opinion, your attitude to investment risk is a key question that an adviser should ask. As this is not a concept you may not have heard before, the best advisers will give you examples. As most will use a Confidential Questionnaire or Fact Find, they can explain the concept based on your needs and desires.

Never be afraid to ask questions and expect answers. Of course if you ask an adviser a technical or obscure question he or she may need to seek clarification themselves. But always insist on your questions being answered.

If you have already been given advice, I am happy to give you a SECOND OPINION without any obligation or fee. Just email me with a copy of the advice

* * * * * * *

If you have your own 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. Please take note of the points in this article.

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

davidgoodall.spain@gmail.com