Thursday, 12 August 2021

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: 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


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!

Tuesday, 2 March 2021

BEWARE: Newspaper articles may NOT always be what they seem

UPDATE:

The advertiser writes the article, not a journalist, the content is then just a one company advertisement! 


Be careful, it's easy to be DELIBERATELY confused



Important
Any of you who have read my previous blogs will know how passionate I am about the importance that Expats take advice from a suitably qualified, experienced and regulated, independent financial adviser.

Believe all Newspaper articles and adverts?
The content is unbiased  and there to inform you? It is NOT!

A diligent reader of 'Financial Pages in Spain' sent me an example where newspaper content merges with an advert. As if that was not deliberately confusing enough, the content was biased and potentially dangerous. The UK outlawed investment advice from unqualified advisers many years ago. Indeed they increased the qualifications necessary to give advice! Remember that that's not just pure investment but the investment within a pension too

In addition, the writer's description of an Independent vs Restricted adviser was wrong! This means his knowledge of the financial services industry in which he works, is not very good.

Unqualified advisers constructing investment portfolios is dangerous and very risky for the client involved. The answer is Due Diligence to ensure you only get Qualified Advice

Due Diligence
As you may know, I am able to help Expats to find an adviser who is suitably qualified to advise them. I have a strict due diligence process and I would never send a consumer to an adviser until they pass my test.

In respect of the advert I was shown, I have carried out my due diligence on the advisers working for the firm and they are not a company that I would be able to refer my readers to for advice.

Other Experiences
I can write from both working in the financial services industry and many years experience in Spain. I know of many other examples that lead me to believe that this is rife in other businesses and is not limited to Spain. Social media as well as newspapers and magazines place the same type of 'adverts' disguised as comment or content. Maybe Governments do this too?

Conclusion 
You need to be very cautious of the firms, companies or individuals with whom you deal and take the utmost care



David Goodall
Financial Pages in Spain
Read every month by 13,000 Brits in Spain





Additional reading:



Tuesday, 16 February 2021

UPDATE: Scam Watch

BEWARE:
Cold calls encouraging a ‘Review’ of your pensions


The Financial Conduct Authority (FCA) in the UK started a TV advertising campaign about Scammers &'Free' Pension Reviews. Financial Pages in Spain advises that this is exactly how many scammers operate in Spain. The watch word is CAUTION

Be mindful that unregulated companies are cold-calling consumers to offer high-risk investment advice.

They are also sending emails, text messages and using online advertising. That was the warning in the UK but in Spain they also advertise in newspapers and it is often difficult to distinguish the regulated from the unregulated.

If you let me know, I can tell you if a company is NOT regulated. Just Email 

The aim of the 'review' is to encourage you to move money from an existing personal or occupational pension to a self-invested personal pension (SIPP) or a small self-administered scheme (SSAS).
The money is then typically invested in investments not regulated by the FCA, such as overseas property developments, forestry or storage units known as store pods.

Such investments can be enormously risky and can be difficult to sell and consumers could lose all the money they move, reducing what they have to live on in retirement.

And they also have less protection should anything go wrong and may not be able to complain to the Financial Ombudsman Service (FOS).  Again, also, the FOS does not cover advice in Spain.
The majority of companies offering the reviews are not authorised by the FCA, although some falsely claim they are acting on its behalf. Others claim to be working with the government following the Budget commitment in March to introduce a free advice service for people at retirement.

Please Note:

Financial Pages in Spain ONLY refers readers to regulated advisers. In fact I am more than happy to give you the FCA registration details of anyone I recommend. Feel free to email me to be recommended or I can check out an adviser you have concerns about. Email

Professionals

·         My doctor is qualified, works in a practice with other professionals and I trust him   without hesitation
·         The veterinary practice we take the dog to is qualified I even know where he     studied and that he is a specialist in small animal health
·         My solicitor who I have known for many years is qualified in both UK and Spain
·         I could go on but I’m sure you’ve got the message. For contact My Email

David Goodall
Financial Pages in Spain




Tuesday, 2 February 2021

Financial Advisers MUST be Qualified

but BEWARE they often aren't!



DUE DILIGENCE ensures that the ADVISERS I RECOMMEND are able to deal with 2021 changed regulations



In these difficult times it's good to know that you can see an adviser with modern technology. After initial contact by email, phone and text, but only if necessary, it is possible to make video calls

Protect your savings, pensions and investments


I’ve said before at ‘Financial Pages in Spain’ that I check out any adviser that I might recommend to a reader. It’s often known as ‘Due Diligence’ and I take it seriously.
Someone calling himself an ‘Adviser’ contacted me to see if we could ‘work together’. My first question was ‘Are you qualified?’ He said ‘No’, I replied we cannot work together then! His retort threw me for a minute but he said ’I don’t have to be, I work in Spain’. Well in 2021 YOU DO have to be! I said you must be Qualified to work with me. But this is why you must be so careful

Professionals

·         My doctor is qualified, works in a practice with other professionals and I trust him   without hesitation
·         The veterinary practice we take the dog to is qualified I even know where he     studied and that he is a specialist in small animal health
·         My solicitor who I have known for many years is qualified in both UK and Spain
·         I could go on but I’m sure you’ve got the message. For contact My Email

So, why would you trust your savings, pensions and investments to an unqualified ‘adviser’ just because they happen to be in Spain? I certainly won’t recommend such a person!

Due Diligence

What I am looking for before I will recommend anyone to you are the following;

  • The adviser firm needs to be regulated by an EU regulator and hold professional indemnity insurance
  • The individual adviser needs to be fully qualified. This qualification can be awarded by several examining bodies, so I check with the relevant body and ask for qualification certificates
  • I also want to see that they are registered with the European Financial Planning Association and that they hold a membership certificate
  • Next, I’m interested in their career history with the UK regulator and if they have a history on the Financial Conduct Authority (FCA) register. I can also see what permissions they held when actively advising in the UK, and this tells me what work they are experienced in and what specialist advice they can give. This is vital in any recommendation.
  • The adviser needs to be authorised to give investment advice, not just to recommend “insurance” products – this is now a minimum requirement to be able to advise on Malta pension plans and UK SIPPs
  • Finally, I check their advice process and what investment options they have to offer clients. I ask for specimen reports to check the advice offered in several important areas


This due diligence process is difficult for you, the consumer, to undertake so please get in touch. My Email


​David

P.S. I just came back from the gym where the instructors all proudly display their Qualification Certificates and Diplomas!




David Goodall
Financial Pages in Spain


Please ‘like’ Financial Pages in Spain on Facebook
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Further Reading;

Monday, 25 January 2021

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;



Interesting, even in 2021?


Tell me your experiences, write to me by email


David Goodall
Financial Pages in Spain

Sunday, 27 September 2020

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.


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

Twitter : @davidgspain





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




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 Financial Pages in Spain


Though Financial Pages in Spain is a website and Blog for British and Irish expats and property owners in Spain, we can also offer trading in Worldwide currencies through our preferred supplier Currency UK 

YOUR link Currency UK



David Goodall
Financial Pages in Spain