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By Matthew Green
This article is published on: 6th July 2026
Moving to another country is one of life’s biggest adventures. Whether you’ve relocated for work, retirement, a better lifestyle or to be closer to family, you’ve probably spent months planning every detail.
You researched the area, found a home, arranged healthcare, organised visas and opened a local bank account.
But there is one question that many internationally mobile families never ask: Has your financial plan moved with you too?
One of the biggest misconceptions people have is believing that the biggest financial risk is investment markets. In reality, markets rise and fall – they always have. For long-term investors, volatility is simply part of investing.
More often than not, the greatest financial risk isn’t market volatility at all. It’s poor planning.
Over the years I’ve met families from the UK, USA, Canada, France, the UAE and many other countries who have built successful careers, accumulated wealth and made life-changing moves abroad. Yet many still have pensions, investments, insurance policies and estate plans sitting exactly where they were before they moved.
Their lives have changed. Their financial plans haven’t.
A financial strategy that worked perfectly in one country may no longer be the most suitable in another.
Different tax systems, inheritance rules, reporting requirements and investment regulations can all have an impact on your long-term financial wellbeing.
Often, doing nothing feels like the safest option. In reality, doing nothing can quietly become one of the most expensive financial decisions you make.
Good financial planning isn’t about constantly changing investments or chasing higher returns. It’s about making sure every part of your financial life works together, wherever life takes you.
For internationally mobile families, it’s worth asking whether your investments are still suitable, your pensions are structured efficiently, your estate plan remains appropriate, your assets are protected and you’re making the most of the opportunities available in your new country.
Financial freedom isn’t simply about building wealth. It’s knowing that your finances are organised, your family is protected and your plans are aligned with the life you’re living today—not the life you left behind.
Moving abroad is the beginning of a fantastic new chapter. Your financial plan should begin a new chapter too.
If you’ve recently moved to Spain, or you’re planning to relocate, a financial review can help ensure your wealth is structured efficiently for your new country of residence. At The Spectrum IFA Group, we specialise in helping internationally mobile families coordinate pensions, investments, tax-efficient planning and estate planning across borders. If you’d like to discuss your own situation, we’d be delighted to arrange a no-obligation consultation and help you build a financial plan that moves with you.
By Matthew Green
This article is published on: 23rd June 2026
For many Dutch and Belgian families, moving to Spain has always been about lifestyle.
The sunshine, relaxed pace of life, excellent healthcare and beautiful coastline make Spain one of Europe’s most desirable destinations for retirement and semi-retirement.
Today, however, more and more people are also paying closer attention to another factor: taxation.
In the Netherlands, ongoing discussions surrounding Box 3 taxation, wealth taxes and the future taxation of investment assets have left many investors questioning what the long-term landscape may look like. Across Europe, governments continue to face pressure to increase tax revenues, leading to frequent discussions around wealth taxation, investment income and capital gains.
Whether these changes ultimately materialise or not, one thing is certain: tax planning before an international move has never been more important.
Most people spend months researching where they want to live in Spain.
Few spend enough time understanding how becoming a Spanish tax resident could affect their investments, pensions and overall financial position.
Unfortunately advice is only sought after Spanish tax residency has been established. By that stage, valuable planning opportunities may have already been lost.
Typically Dutch and Belgian residents hold investment portfolios, savings structures and financial products that have been built around the tax rules of their home country.
The challenge is that once you become tax resident in Spain, those same investments may be treated very differently.
This can affect investment portfolios, capital gains, dividend income, rental income, pension arrangements, and estate planning.
One area that surprises new arrivals is Spain’s approach to wealth taxation.
Unlike other Northern European countries, Spain has historically applied Wealth Tax to certain assets above specified thresholds. In addition, some regions apply different rules and exemptions, creating a complex landscape for international investors.
Expats assume that because an asset is held outside Spain it will not be relevant for Spanish tax purposes. In reality, Spanish tax residents are generally taxed on their worldwide assets and income, making pre-arrival planning particularly important.
Relocating to Spain often includes holding investment portfolios that have accumulated significant unrealised gains over many years.
The timing of future disposals can have important tax consequences. This is why many internationally mobile families review their investment structures before becoming Spanish tax residents rather than after.
The most valuable planning opportunity usually exists before you become Spanish tax resident.
Once residency starts, your options may become more limited. This is why many experienced advisers encourage clients to begin reviewing their financial affairs 6 to 12 months before their intended move date.
We work with individuals and families relocating to Spain from the Netherlands, Belgium and across Northern Europe.
Our role is to help clients understand how Spanish taxation may affect their existing assets and investments before they move.
This includes reviewing current investment arrangements, assessing potential Spanish tax exposure, identifying wealth tax considerations, evaluating capital gains implications, coordinating with tax and legal professionals where appropriate, and creating a financial strategy suitable for life as a Spanish resident.
Moving to Spain should be an exciting life decision, not a tax headache.
Whether your concerns relate to Dutch Box 3 reforms, future wealth taxation, capital gains exposure or simply understanding how Spanish tax residency works, obtaining advice before you relocate can make a significant difference.
The best time to plan is before you become a Spanish tax resident. NOT afterwards!
By Peter Brooke
This article is published on: 16th June 2026
If you’ve been paying attention to investment markets over the last couple of years, you’ll already know that AI is one of the most significant forces reshaping the global economy. The returns from semiconductor companies, cloud infrastructure, and the businesses building and running AI systems have been remarkable — and the broader implications are only just beginning to play out.
I was in London recently for an industry conference, and the keynote session on AI was arguably the most discussed moment of the whole event. Not because the topic was new to anyone in the room — we’ve all been watching this unfold — but because of how quickly it’s now moving inside financial planning firms specifically. The framing that stuck with me: this isn’t just another software upgrade. It’s closer to an industrial revolution. The shift from paper-based advice to digital systems in the 1990s took a decade. What’s happening now is moving at a fraction of that pace.
I came away thinking a lot about what this means for how I work — and for you.
“Technology won’t replace advisers — but advisers who use technology will replace those who don’t.“
Before I get into the practical detail, I want to make something clear, because I think it’s the most important idea in this whole conversation.
AI is extraordinarily capable at processing information, finding patterns, drafting content, and summarising complexity.
But it lacks something that turns out to be rather crucial: judgement.
Here’s a simple example. If you ask ChatGPT, “I need to go to the car wash — it’s 200 metres away. Should I walk or drive?”, it will very sensibly tell you to walk. It’s close, after all. What it misses, of course, is that the entire point of going to the car wash is to wash the car. That’s not a failure of intelligence. It’s a failure of context, of understanding the bigger picture, of asking the right question in the first place.
That’s what human advisers do. Not just answer the question in front of us — but understand why you’re asking it, what’s really going on underneath it, and what the right question actually is.
I’ve been using AI tools actively for some time now, and recently completed an AI bootcamp with my productivity coach— deliberately, and with a specific intention.
My clients shouldn’t have to worry about keeping up with all of this (unless they want to); That’s my job. The more fluent I am in how these tools actually work, the better placed I am to use them well to benefit us all, and to recognise where the limits are.
One of the most practical shifts is in how I handle meeting notes. If we speak by video call, I record and transcribe the conversation using a secure, multi-factor authenticated application. This means I can be fully present and listening, rather than split between the conversation and a notepad. Afterwards, the transcription lets me extract the key points accurately — compliance notes, commitments I’ve made to you, things you’ve agreed to send me, follow-up tasks from switches, withdrawals, or other issues we’ve discussed. That all goes into my task management system so nothing gets missed or delayed. The recording itself is deleted from the app immediately once I’ve taken what I need.
If we’re meeting face to face, I’ll simply ask your permission to record it, in the same way as for a video meeting and for the same reasons — in my experience, most people are very comfortable with it once they understand why.
AI is also helping me with research, drafting communications, analysing documents, and building better workflows across my business. The goal is that you should start to notice an improvement in follow-up — things like investment switches, withdrawal requests, or outstanding actions getting picked up more reliably and more quickly. Less ‘falling through the cracks’. The real goal is higher quality time on the things that actually matter — thinking through your situation properly, having the conversations that need to happen, and ideally spending more of that time with you face to face rather than behind my desk.
If you’re one of my existing clients and not already using the CashCalc Client Portal for document sharing and secure messaging, do get in touch and I’ll set you up. It’s a much safer option than email for anything sensitive, and is straightforward to use. See the short explainer video below if you haven’t seen it. And if you’ve ever wanted to book a call without the back-and-forth of scheduling, Calendly has been running quietly in the background for a while now — it’s saved all of us rather a lot of emails.
I want to say something here without alarming you unnecessarily, because the picture is genuinely nuanced.
Email is convenient, and we all use it constantly. But it is also the most common point of vulnerability when fraud occurs. As AI tools become more sophisticated, so do the people misusing them.
At Spectrum, we’ve updated our processes accordingly. Any withdrawal or surrender request that arrives by email, I will always speak to you directly — by video call — before anything moves forward. No exceptions. In some cases, particularly if a new bank account is involved, I will also ask you to show me a bank statement, either by holding it up to the camera or screen-sharing. It sounds simple, because it is — but that kind of direct human verification is exactly what stops fraud in its tracks.
On that note: AI can now be used to create convincing video overlays in real time. If you ever receive a video call from someone claiming to be me and something feels off, ask them to wave their hand in front of their face. It breaks the overlay. I’ll always do it happily. If someone won’t — end the call.
“42” but what’s the question?
In Douglas Adams’ The Hitchhiker’s Guide to the Galaxy, a vast supercomputer called Deep Thought is asked to find the answer to ‘life, the universe, and everything’. After millions of years of calculation, it delivers its answer: 42.
The problem, it turns out, is that nobody had thought to ask for the question.
They then had to build another supercomputer — the Earth — just to work out what the question was supposed to be.
In a roundabout way, this is a fairly good description of where we are with AI right now.
One of my AI bootcamp coaches put it well recently: we’re moving from a knowledge economy to a judgement economy. Every answer is now theoretically available to everyone. What remains scarce — and genuinely valuable — is the ability to know which question to ask, to understand context, to see the bigger picture, and to make a call when the situation doesn’t fit neatly into any formula.
That’s what twenty-plus years of working with clients in France, navigating genuinely complex financial and tax environments, actually builds. AI will help me do more with that experience.
I find this genuinely exciting. I hope you do too, and if you don’t I am here to help.
By Chris Burke
This article is published on: 15th June 2026
The future is nowhere near ready
A client contacted me recently, sending me an evaluation of her portfolios that AI had provided. She had entered details of her investment and pension portfolios and spent a considerable amount of time inputting information to give the AI as much knowledge as possible. It was the first time I had received this kind of “feedback”, and I have to say, I was intrigued to see what the report said and how we ‘stacked’ up against it.
After we reviewed the report and discussed her portfolio, it made me think that this certainly would not be the last time a client undertook this exercise, with or without my involvement. It also highlighted, alongside some positives, several significant assumptions and suggestions that, in this client’s case, were simply not appropriate.
I have highlighted some of the key concerns and points to consider. In essence, even though she had provided AI with a great deal of information, it simply did not have the experience, knowledge, or awareness to ask the right questions. It did not truly “know the client”, which is one of the most important aspects of my role. Understanding a client’s circumstances enables us to embark on the right financial journey together, tailored to them and their family at that particular stage of life.
Perhaps one of my biggest concerns is that if AI starts telling everyone to do the same thing — buy or sell a particular investment, for example — this could have a dramatic and potentially compounding effect on stock markets, increasing both volatility and the severity of market highs and lows.
Below are some of the key reasons why relying solely on AI for investment decisions can be dangerous, and why experienced human advisers still play a crucial role.
Investing is not just about numbers — it is about people.
A good financial plan considers:
AI can model risk profiles based on questionnaires, but it cannot fully understand human behaviour, fear, or changing life circumstances. When markets fall sharply, many investors do not behave rationally — and AI cannot talk you through those moments or adjust a strategy with empathy and judgement.
AI systems are typically trained on historical market data. The problem is simple but critical:
Past performance does not guarantee future results.
Markets change due to:
AI can adapt, but only within the patterns it has already seen. Major economic surprises are exactly where human judgement often becomes more valuable than statistical modelling.
One example is new themes for investing, called Thematic Investing. These can be very important and highlight areas to be invested in for the future. One of these currently is Cyber Security, more companies are more worried about this and the cost to their business than any other threat. AI will not specify this in a designed portfolio, because it doesn’t speak to investment managers, visit seminars and understand the risks.
One of the biggest technical dangers in AI portfolio design is something called over-optimisation — building a portfolio that looks excellent on paper but performs poorly in real-world conditions.
This can happen because:
The result? A portfolio that may appear stable in simulations but behaves unpredictably in live markets.
One crucial component of successful financial planning is optimising tax efficiency on investment returns, with valuable opportunities for reducing tax exposure usually determined by where you live.
A financial adviser does not simply choose investments — they structure them to minimise tax liability legally and efficiently.
AI tools often:
Over time, poor tax planning can cost investors tens, sometimes hundreds of thousands.
When an AI-managed portfolio underperforms or behaves unexpectedly, accountability becomes unclear.
A regulated financial adviser, on the other hand, carries professional responsibility, regulatory oversight, and a duty of care. That accountability matters when your life savings are involved.
Financial markets are influenced by psychology just as much as mathematics.
Fear (the current biggest influencer in the markets), greed, panic, and herd behaviour often drive short-term market movements. AI systems can struggle to interpret sentiment-driven shifts in real time, especially when they are caused by unpredictable global events or changing social dynamics.
Experienced advisers can interpret these conditions within a broader context and adjust guidance accordingly, rather than relying purely on data patterns.
A good financial adviser does more than simply help with investment advice, they provide:
Most importantly, they bring judgement — something AI, despite its strengths, does not yet genuinely possess.
AI has a valuable role to play in modern investing. It can improve efficiency, reduce costs, and support analysis. However, when it comes to managing wealth that supports your future, retirement, and family security, relying solely on algorithms introduces risks that are often not immediately visible.
Investing is not just a mathematical exercise — it is a deeply personal financial journey. And that is exactly where experienced human financial advisers remain essential.
By Chris Burke
This article is published on: 12th June 2026
Cape Fear or Cape of Good Hope?
I regularly get asked, “Is the stock market high, Chris? Is it overpriced? Will it crash soon?” And the truth is, there is not one person in the world that truly knows. However, one point of certainty is that successful investment in global stock markets is achievable with careful long-term planning.
The process behind delivering this success is comprehensive, one element of which I will outline here.
When most people ask, “Is the stock market expensive?”, the answer they usually get involves the price-to-earnings (P/E) ratio, which, in its simplest terms, measures a company’s current share price relative to its earnings per share. Divide the market’s current price by its most recent earnings, and you have a rough sense of value.
The problem? Earnings are noisy. They swing wildly with economic cycles, recessions, and one-off events. A company — or an entire market — can look cheap on a single year’s earnings during a boom and terrifyingly expensive during a downturn. The standard P/E ratio tells you a lot about the moment, but very little about the long-term picture.
Enter the CAPE ratio.
CAPE stands for Cyclically Adjusted Price-to-Earnings. It was developed by Professor Robert Shiller of Yale University — a Nobel laureate in economics — and is often called the Shiller P/E in his honour.
The idea is simple but powerful. Instead of dividing the market price by a single year of earnings, CAPE uses the average of the last 10 years of earnings, adjusted for inflation. This smooths out the peaks and troughs of the business cycle and gives a far more stable, reliable picture of whether the market is cheap or expensive.
CAPE = Current Market Price ÷ 10-Year Average Inflation-Adjusted Earnings
A higher CAPE means the market is expensive relative to its earning power over time. A lower CAPE means it’s cheap.
This is where it gets interesting.
The long-run historical average CAPE for the US S&P 500, going back to 1871, sits around 17. Readings above 25 have historically been considered expensive. Readings above 35 have been rare — and when they’ve occurred, they’ve almost always been followed by poor returns over the subsequent decade.
The CAPE hit its all-time record of 44.2 in late 1999 — right before the dot-com crash that wiped out nearly 50% of the S&P 500 and delivered a “lost decade” for equity investors.
Before the 2008 financial crisis, it sat at around 27.5. Not extreme, but elevated — and returns in the years that followed reflected that.
As of June 2026, the US S&P 500 CAPE ratio stands at approximately 39.9.
To put that in context:
This is not a cause for immediate panic. High valuations do not tell you when the market will correct — only that the market is currently priced for near perfection. The margin for error is thin.
There are legitimate arguments for why today’s CAPE might overstate the risk:
The composition of the market has changed. The S&P 500 is now dominated by large technology companies — Microsoft, Apple, Nvidia, Amazon — with higher profit margins and faster growth than the industrial companies that historically made up the index. Some analysts argue a structurally higher CAPE of 25–30 may be the “new normal”.
Passive investing has changed flows. Trillions of pounds and dollars now flow automatically into index funds regardless of valuation, which may support prices at higher levels than before.
Interest rates matter. When bonds pay very little, investors accept higher equity valuations. As rates have moved higher, this argument has weakened — but it hasn’t disappeared entirely.
These are reasonable points. But they are also the same arguments made in 1999. High valuations have a habit of reasserting themselves eventually.
A few important caveats:
The CAPE is not a timing tool. Markets can remain expensive for years. Selling everything because the CAPE is high is not a strategy — it’s a gamble on timing that has caught out many a professional investor.
It is a long-term return indicator. Shiller’s research showed a strong inverse relationship between CAPE levels and returns over the subsequent 20 years. When you buy at a high CAPE, you should temper your long-term return expectations accordingly.
It works best for broad, long-term portfolio decisions — not for individual stock selection or short-term market calls.
It applies primarily to the US market. CAPE ratios vary significantly by country. Many European and emerging markets currently trade at far lower valuations, which is one reason genuine diversification remains so important.
If you are a long-term investor — saving for retirement, building wealth over decades — the CAPE ratio is a useful reality check.
At current levels, the US market is not priced for average returns. That doesn’t mean you should abandon equities. It means:
The CAPE ratio is one tool, not an oracle. But it is one of the most rigorously tested long-term valuation metrics we have. And right now, it is telling us clearly: the US stock market is not cheap.
That is something every informed investor should have on their radar, and just one of the many considerations I take into account as a financial adviser when looking after my clients.
By Katriona Murray-Platon
This article is published on: 4th June 2026
June marks the official beginning of summer – although the heatwave at the end of May gave us an early taste of the season. For French businesses, this is the final month to conclude key transactions and projects before the traditional slowdown in July and August. For French resident tax payers there are also a few matters to address before the summer really starts.
Most people will have by now submitted their tax return – those living in departments numbered over 55 have until 4th June and those who have engaged an accountant to do their tax returns will also be granted additional time to file. The tax statements will be available online from 24th to 31st July. For those receiving paper statements, these will arrive by post between 23rd July and 28th August.
The 15th June is the deadline for trustees of trusts where a trustee, settlor or beneficiary is fiscally resident in France, to complete the declaration 2181-TRUST2, declaring the value of the assets in the trust as at 1st January. The issue of trusts in France is one I’m often asked about. Are trust illegal in France? No. Trusts do not exist under French law, however French case law (jurisprudence) has long accepted that Trusts set up in other countries can have effect in France provided that they were created in accordance with the law of the country in which they were created, and that they do not contain any provisions which are contrary to French public policy (ordre public) especially as regards forced heirship (reserve héreditaire) – Paris Court of Appeal decision, 10th January 1970, Époux Courtois et autres consorts de Ganay. If you are the beneficiary, trustee or settlor of a Trust and this is the first time you have heard about the requirement to declare the trust, you need to first declare the existence of the trust using the form 2181-TRUST1 as well as the value as at 1st January.
Property owners have until 30th June to update the information on the buildings on their property and the occupants of those buildings on the impots.gouv.fr website if their situation has changed between 2nd January 2025 and 1st January 2026. If your property portfolio remains unchanged since the last declaration, no action is required. Only one declaration is necessary for a building and adjacent structures (e.g. garages, swimming pools etc) if they are occupied by the same person(s). Furthermore, as the review of rental values has been pushed back 3 years, landlords do not have to declare the amount of their rent received, unless they choose to do so.
On 26th May 2026, the Prudential Assurance Company (PAC) Board conducted its quarterly review of the Prufund Expected Growth Rates (EGR). The EGRs—which represent the forward-looking component of Prufund’s unique smoothing mechanism—remain unchanged for this quarter. Additionally, there were no Unit Price Adjustments (UPAs). The UPA is the backward-looking element of the smoothing mechanism; it is entirely formulaic, non-discretionary, and designed to protect investors from short-term market volatility.
The first half of 2026 has been defined by two dominant issues:
The geopolitical situation which has had a broad impact on financial markets, and AI – the significance of which is arguably still underappreciated by the broader market.
While the ongoing tensions in the Middle East show sporadic signs of diplomatic progress, it is still unclear whether we are any nearer a deal between Iran, Israel and the US.
After reports that a deal had been reached last week, oil prices dropped to $92 but have now risen to $96.28 the barrel on 1st June.
While we do not understate the human and political seriousness of these events, such conflicts are a regrettably familiar feature of the global landscape. Historically, long-term investors have been well-served by avoiding overreacting to short-term geopolitical shocks.
Inflation data published last week confirms that energy price pressures are increasingly filtering through to core economies. May data revealed inflation hitting 2.8% in France, 3.3% in Italy, and 3.6% in Spain. The European Central Bank (ECB) is expected to raise interest rates at its June meeting, despite visible signs of economic deceleration across the Eurozone. The composite Purchasing Managers’ Index (PMI)—a reliable metric for broader business activity—slumped to a 31-month low in May, following a contraction in the French economy during Q1 2026. Meanwhile, US forecasters now project inflation to end the year at 3.6%, marking yet another period where inflation sits stubbornly above the Federal Reserve’s 2% target.
In contrast to geopolitical events, the rise of AI represents a profound paradigm shift that will permanently alter the structure of the global economy.
The early part of 2026 saw a move away from software and information services businesses, as investors adopted a “sell first, ask questions later” approach. Time will tell as to which business models will become obsolete from the use of AI and which will see their productivity enhanced by these extraordinary breakthroughs.
Our fund managers are therefore focusing on asset allocation and portfolio construction whilst avoiding complacency.
Remaining open-minded to a changing economic landscape is key as well as allowing for flexibility in investment portfolios.
Even within a rapidly evolving global economy, the fundamental advantage of long-term investing remains entirely unchanged.
For the vast majority of portfolios, maintaining a disciplined, long-horizon stance—what could be termed deliberate “inaction”—remains the soundest strategy.
Despite the pervasive negative sentiment in the financial media, all major equity indices remain in positive territory for 2026 – a vital reminder for us all to keep focused on corporate and economic fundamentals, rather than market emotion.
The coming, more relaxed, summer weeks, are a perfect time to get in touch to arrange a free, no obligations, meeting with me to discuss your personal financial situation.
By Chris Burke
This article is published on: 3rd June 2026
One issue that many British expatriates only discover years after leaving the UK is that a large number of UK pension providers are not designed to service non-UK residents.
Many standard UK pension companies:
In some cases, providers may even refuse to continue administering the pension altogether once the member is permanently resident abroad.
This is becoming increasingly common since Brexit and the UK no longer being part of the EU. Many UK pension providers have become more cautious about servicing clients resident in European countries due to additional cross-border regulatory requirements, licensing restrictions, and compliance obligations.
As a result, some providers have reduced or completely withdrawn services for non-UK residents, particularly those living within the EU and EEA. This has left many expatriates needing to transfer their pensions to internationally focused providers that are properly structured to support overseas clients.
This wider trend has been driven by:
For many expatriates, the result is the same:
For retirees depending on pension income abroad, this can create serious financial and administrative difficulties.
Both for Withdrawals and Pension Management
Many UK-based pension providers were built primarily for UK residents and domestic advisers. Once a member relocates overseas permanently — particularly to countries such as Spain, Portugal, France, the UAE, or Thailand — the provider may no longer wish to maintain the relationship.
This can leave expatriates with very limited options:
In practice, many non-UK residents eventually have little choice but to move their pension to a provider specifically set up for international clients. However, if this has been “left as it was” for many years, this could have serious consequences.
Pension Management
Many people I speak to know they have a UK pension (or pensions), but many are not aware of the following:
All of these factors can have a very significant impact on pension performance and, in real terms over many years, on the amount eventually received in retirement.
As an example, some people approach me with a pension at perhaps age 55 and are not planning on retiring until 65, yet their UK pension has automatically been placed into a “pre-retirement” strategy by the pension company.
In essence, this means a much more cautious investment approach, which in the short term may be ideal for someone about to retire. However, if you are still 10 years away from retirement, this will normally mean substantially lower long-term returns for the pension overall.
And all of this can happen without the client fully realising it had been done. Technically, it may have been disclosed within the standard terms and conditions, but it was not actively identified or discussed with the individual.
International SIPP providers are generally structured specifically to support expatriates and internationally mobile retirees.
They are experienced in dealing with:
This means clients can continue to:
For many expatriates, moving to an International SIPP is not only about tax efficiency or currency flexibility — it is often about maintaining reliable long-term access to their pension while living abroad.
It can also make a dramatic difference to the amount of retirement income ultimately received, both from a tax-efficiency perspective and from improved investment management over time.
Sometimes clarity starts with a conversation.
You can arrange an initial consultation to explore your situation [here].
You can also [read independent reviews of my advice and service here].
By Chris Burke
This article is published on: 2nd June 2026
We are living in Spain and enjoying all the wonderful reasons that we moved here. But back in the UK, there’s a semi-detached in Swindon, a flat in Leeds, or perhaps a buy-to-let in Manchester quietly sitting there — and sooner or later, you’re going to have to decide what to do with it.
Keep it and rent it out? Sell now? Sell later? Do nothing and hope the question goes away?
The question of whether to retain UK property as an investment once you become a Spanish tax resident is one of the most common and consequential decisions British expats face. There is no universal right answer — but there is a framework for thinking it through clearly, and that’s what this article provides.
Let’s look at both sides of the argument, honestly and with real tax numbers.
Before we weigh the pros and cons, it’s essential to understand that the tax treatment of UK property changes significantly once you become a Spanish tax resident. You are no longer just dealing with HMRC. You now have two tax authorities with an interest in your affairs.
In the UK, as a non-resident landlord or seller, HMRC still has jurisdiction over:
In the Spain, as a tax resident, the Agencia Tributaria expects you to declare:
The good news: the UK-Spain Double Taxation Agreement (DTA) prevents you from being fully taxed twice. The bad news: it doesn’t mean you pay nothing extra in Spain — it means you get credit for UK tax paid, and may top up to the Spanish rate if it’s higher.
Capital Appreciation Over Time
UK property has, over the long term, delivered consistent capital growth. Average UK property values have roughly doubled over the past 20 years in many regions. If you purchased your property a decade or more ago at a lower price, selling now crystallises a gain — and that gain is taxable.
By holding, you defer the taxable event. You continue to benefit from any future growth while delaying the CGT liability.
Example — The Deferral Argument:
Margaret bought a property in Bristol in 2008 for £180,000. It is now worth £340,000, giving an unrealised gain of £160,000. If she sells immediately, she faces CGT in both the UK and potentially Spain. If she holds for another 10 years and the property grows to £420,000, her gain increases — but so does the purchasing power of her asset and her rental yield over that period.
Whether deferral is wise depends on your view of the UK property market, your personal tax position in future years, and your long-term plans.
Sterling-Denominated Asset in a Diversified Portfolio
If your life in Spain is predominantly euro-denominated — pension income in euros, Spanish property, euro savings — then a UK property provides natural currency diversification. If the pound strengthens against the euro, the sterling value of your UK asset rises in real terms relative to your euro living costs.
This isn’t a reason on its own to hold property, but it is a genuine diversification argument, particularly for those who may return to the UK at some point.
Rental Income as a Long-Term Income Stream
A well-managed, mortgage-free UK rental property can provide a reliable income stream. For a Spanish tax resident, that rental income is taxable — but the combined effective rate may still be reasonable, particularly if UK rental profits are modest after allowable deductions.
Example — Rental Income Tax Treatment:
David owns a mortgage-free rental property in Manchester. Annual rent: £14,400 (£1,200/month). After allowable expenses (letting agent fees, insurance, maintenance), his taxable UK profit is £11,000.
UK Tax: As a non-resident basic rate taxpayer, David pays 20% on £11,000 = £2,200 UK tax if he has no other UK income taxable.
Spain: David declares the £11,000 (converted to euros) on his Spanish return. Spain taxes this as general income (rendimientos del capital inmobiliario). If his total income in Spain puts him in the 30% marginal band, Spain calculates tax of approximately £3,300 — but credits the £2,200 paid in the UK. Net additional Spanish tax: approximately £1,100.
Total effective tax on rental income: approximately £3,300 — a combined rate of 30%.
This is not catastrophic, particularly if the property is also appreciating. However, it is notably less tax-efficient than many alternatives available to Spanish residents (more on this later).
A Safety Net or Future Home
Many expats — particularly those who moved within the last five years — harbour a realistic possibility of returning to the UK. Health, family, or simply changing preferences can bring people back. Selling a UK property and then trying to re-enter the UK market at a later date can be expensive, particularly if prices have risen or your borrowing capacity has reduced.
Retaining the property preserves optionality — and optionality has value that doesn’t show up on a tax calculation.
The Renters’ Rights Act 2025: The Rules Have Changed — Significantly
This is a major development that every expat landlord needs to understand. The Renters’ Rights Act 2025 received Royal Assent in October 2025 and its first phase came into force on 1 May 2026. The changes are substantial and tip the balance of power firmly toward tenants.
Here is what has changed:
Section 21 ‘no-fault’ evictions are abolished. You can no longer evict a tenant simply because you want to sell the property, move a family member in, or simply end the tenancy. You must now cite a specific legal ground under Section 8 of the Housing Act 1988. If you want possession of your property — to sell it, to move back in, or for any other reason — you need court approval, and you must give four months’ notice in most cases.
All tenancies are now periodic (rolling). Fixed-term assured shorthold tenancies (ASTs) are gone. All tenancies are now open-ended rolling contracts. Tenants can leave with two months’ notice at any time. You cannot.
Rent increases are restricted to once per year and must reflect market rates. Tenants have the right to challenge any increase they consider excessive at tribunal.
Penalties have increased dramatically. Non-compliance with the new rules can result in civil penalties of up to £40,000 per breach. Councils have been given strengthened investigatory powers and funding to enforce compliance.
What this means for expat landlords: Managing a UK property from Spain was already administratively challenging. Under the new regime, removing a difficult tenant, regaining possession to sell, or adjusting rents now involves formal legal processes that are significantly harder to navigate from 1,500 kilometres away. The buffer you once had — the ability to serve a Section 21 notice and regain possession relatively straightforwardly — no longer exists.
EPC Requirements: Looming Upgrade Costs
The UK government has confirmed through its Warm Homes Plan (January 2026) that all private rental properties in England and Wales must achieve a minimum EPC rating of C by 1 October 2030. The current minimum is E, so any property currently rated D, E, or below will require investment.
Key details:
For an expat landlord, this is a concrete, time-bound capital cost. A property currently rated D or E may require new insulation, a heat pump, double glazing, or other significant works to reach band C — all of which must be organised, overseen, and paid for from abroad.
Example — EPC Upgrade Cost:
Caroline owns a 1970s semi-detached rental in Leicester currently rated EPC D. Her letting agent advises it will need new loft insulation, cavity wall insulation, and a heat pump to reach band C — estimated cost: £8,500. This is within the £10,000 cost cap but represents a real cash call that must be met before October 2030, regardless of whether the rental income justifies it.
The Section 24 Problem: Mortgage Interest Relief is Limited
Since 2020, UK landlords — resident or non-resident — can no longer deduct mortgage interest as an expense from rental income. Instead, they receive a basic rate (20%) tax credit. For higher or additional rate taxpayers, this significantly increases the effective tax burden on rental income.
Example — The Hidden Higher-Rate Trap:
Susan has a rental property with £18,000 annual rent. Her mortgage interest is £9,000 per year. Under the old rules, she would have declared £9,000 profit. Under Section 24, she declares the full £18,000 as income and receives a 20% credit (£1,800) against her tax bill.
If Susan’s total income (including Spanish pension and other income) puts her in the UK 40% band:
She then declares the rental income in Spain, receives credit for UK tax paid, and may or may not owe additional Spanish tax depending on her total Spanish income.
For heavily mortgaged properties, Section 24 can make rental income deeply unattractive — particularly once Spanish tax is layered on top.
Two Bites of the Cherry
When you eventually sell UK residential property as a non-resident, you face taxation in both countries.
UK CGT:
Spanish CGT:
Example — CGT on Disposal:
Peter purchased a property in Leeds in 2014 for £220,000. He moved to Spain in 2020. He sells in 2026 for £310,000.
UK CGT:
Spanish CGT:
However: had sterling weakened over the holding period, the euro-denominated gain could be significantly larger, potentially resulting in substantial additional Spanish tax liability.
The key takeaway: currency movements create a structural tax exposure that simply does not exist for UK-resident property owners. This asymmetry is a compelling argument against long-term holding as a Spanish resident.
Principal Private Residence (PPR) Relief for Non-UK Residents: What You Need to Know
Principal Private Residence Relief (PPR) is the UK tax rule that normally protects your main home from Capital Gains Tax when you sell it. If a property has been your main residence throughout your entire period of ownership, the gain is fully exempt from CGT. No tax to pay, no calculation needed.
For UK residents, it is one of the most valuable tax reliefs in existence. For non-UK residents — including British expats living in Spain — it still exists, but it has been significantly curtailed. Understanding exactly what you’re entitled to, and what you’re not, is essential before you make any decision about selling a UK property.
How PPR Relief Is Calculated
PPR relief is apportioned. You don’t get it in full simply because you once lived in the property — you get it for the proportion of your total ownership period during which it was your main residence.
The formula is straightforward:
PPR Relief = (Qualifying Periods ÷ Total Ownership Period) × Total Gain
Qualifying periods include:
That’s it. No other automatic additions apply.
Example:
Sarah bought a property in 2010 and lived in it as her main home until 2018 — eight years. She then moved to Spain. She sells the property in 2026 — meaning she owned it for 16 years in total.
Qualifying period: 8 years (actual residence) + 9 months (final period exemption) = 8 years and 9 months
Total ownership: 16 years
PPR fraction: 8.75 ÷ 16 = 54.7% of the gain is exempt
If the total gain is £180,000, approximately £98,400 is exempt from UK CGT, and £81,600 is taxable.
At 24% (higher rate): UK CGT payable = approximately £19,584 — less the £3,000 annual exempt amount.
The years in Spain during which she did not live there as her main residence are fully exposed to CGT. She does not get relief simply because she used to live there.
The Non-Resident CGT Rule: April 2015 Baseline
There is an important additional layer for non-residents specifically. Non-Resident Capital Gains Tax (NRCGT) on UK residential property was introduced on 6 April 2015. Prior to that date, non-residents did not pay UK CGT on UK property at all.
This means that for properties purchased before April 2015, the taxable gain as a non-resident is calculated from the higher of:
In practice, this means you can elect to use the April 2015 valuation as your base cost, which reduces the gain that falls within the UK CGT net. For properties that had already appreciated significantly before 2015, this can be a meaningful saving.
Example:
David bought a flat in 2005 for £150,000. It was worth £240,000 on 5 April 2015. He sells in 2026 for £320,000.
He can elect to use the 2015 value as his base cost, meaning his taxable gain for NRCGT purposes is £80,000 (£320,000 minus £240,000) — not £170,000 (the full gain since purchase).
Any PPR relief then applies to the relevant portion of that £80,000 gain, not the full historic gain.
This rebasing election is available automatically and is usually the most advantageous approach for pre-2015 purchases, though you should confirm this with an adviser for your specific situation.
There is one route by which a non-UK resident can claim PPR relief for a period spent outside the UK, but it comes with strict conditions and is often misunderstood.
Under the Statutory Residence Test, a non-UK resident can still claim PPR relief for a tax year in which they — or their spouse or civil partner — spent at least 90 nights in the UK property during that tax year.
This sounds helpful, but in practice it is rarely straightforward:
For most expats firmly settled in Spain with no intention of spending extended periods back in the UK property, this route is largely academic. But for those who genuinely split their time between a UK property and Spain — particularly those close to the 183-day residency threshold — it is a potential area of overlap that requires careful analysis.
What Happens in Spain When You Sell?
As a Spanish tax resident, you must also declare the sale on your Spanish declaración de la renta. Spain calculates the gain in euros, using the exchange rate at the date of purchase and the date of sale. Any PPR relief you receive in the UK reduces your UK CGT bill — but Spain performs its own calculation and gives you credit for the UK tax actually paid, not for the relief granted.
This is a subtle but important distinction:
If your UK CGT bill is reduced to zero by PPR relief, Spain still calculates a gain based on its own rules — and you may owe Spanish CGT on the full euro-denominated gain, with no UK tax credit to offset it.
Example:
Claire sells a UK property on which her UK CGT is reduced to zero thanks to PPR relief. The property has also appreciated in euro terms due to sterling strengthening during her ownership. Spain calculates a gain of €60,000. There is no UK tax paid to credit against it. Spain taxes the gain at savings rates — potentially €11,340 in Spanish CGT that many people simply do not anticipate.
This is one of the least well-understood aspects of the UK-Spain tax interaction, and it catches people out regularly.
The 9-Month Final Period: Why Timing Your Sale Matters
The final 9-month exemption runs from the date you last occupied the property as your main residence. If you moved to Spain in January 2023, your 9-month final period expired in October 2023. Every month of ownership after that date is fully exposed to CGT in the UK (on a time-apportioned basis).
This means that delay in selling — whether because you’re not ready, the market isn’t right, or you simply haven’t got around to it — directly increases your UK CGT liability. Each additional year of ownership after the 9-month window adds another year of non-exempt gain.
Practical implication: If you moved to Spain recently and are undecided about selling your UK property, the clock on your CGT exemption is already running. It is not a reason to rush into a sale you’re not ready for — but it is a reason to understand the numbers sooner rather than later.
Summary: Key Points to Remember
Managing UK property from Spain involves letting agents (typically 10–15% of rent), maintenance you cannot oversee in person, and under the Renters’ Rights Act, a legal framework that now heavily favours tenants.
Regaining possession — whether to sell, renovate, or simply exit the market — now requires formal legal process, notice periods, and potentially a court hearing.
The net yield on a UK buy-to-let — after mortgage costs, agent fees, maintenance, insurance, EPC upgrade obligations, and combined UK-Spanish tax — can be surprisingly thin. The spreadsheet sometimes tells a story the landlord doesn’t want to hear.
Spanish Wealth Tax and the Modelo 720 Obligation
As a Spanish tax resident, you must declare your UK property on the Modelo 720 if its value (along with other overseas real estate) exceeds €50,000. Failure to comply carries serious penalties.
Additionally, some regions of Spain apply Wealth Tax (Impuesto sobre el Patrimonio) on worldwide assets above certain thresholds (typically €700,000 net, varying by region). The Solidarity Tax (Impuesto de Solidaridad de las Grandes Fortunas), introduced nationally in 2023, applies to worldwide net assets above €3 million at rates of 1.7% to 3.5%. High-value UK property equity could push you into either territory.
The Alternative: What You Could Do With the Proceeds Instead
This is the section most people don’t think about — and it’s arguably the most important.
If you sell your UK property, you don’t just eliminate a range of costs, risks, and compliance obligations. You free up capital that can be deployed into something specifically designed for your life as a Spanish tax resident — with results that are, in most cases, dramatically more efficient across every measure that matters.
The most powerful tool available to British expats in Spain is the Spanish Compliant Investment Bond — sometimes called a seguro de vida ahorro or collective investment bond. Think of it as Spain’s answer to the ISA, but in some respects more powerful.
These are life assurance-based investment wrappers, typically issued by regulated EU insurance companies (often based in Ireland), holding a diversified portfolio of UCITS-compliant funds in your choice of currency — euros, sterling, or dollars. The Spanish tax authority (Hacienda) specifically recognises and endorses these structures, which is what makes them so compelling.
Here is how they compare to holding UK property across the four areas that matter most to expats:
UK Property: Rental income taxed annually in both UK and Spain. Capital gains taxed in UK (with 60-day reporting deadline) and potentially topped up in Spain. Currency movements create additional Spanish exposure. Combined effective rates routinely reach 30–60% depending on the scenario.
Spanish Compliant Bond: Growth rolls up entirely tax-free inside the wrapper — no annual tax on dividends, interest, or internal fund switches. Tax is only triggered when you make a withdrawal, and even then, only the gain element of that withdrawal is taxable (not the original capital).
Sterling-Denominated Asset in a Diversified Portfolio: You can keep the money in sterling, in fact most major currencies, it does not need to be changed into euros.
Example — Proportional Tax Relief in Action:
James invests £400,000 into a Spanish Compliant Bond. After several years, it grows to £600,000 (one-third gain, two-thirds original capital). He withdraws £60,000.
Spain calculates that one-third of the withdrawal (£20,000) represents gain — and only that £20,000 is subject to savings tax. At 19% on the first €6,000 and 21% on the remainder, his tax bill is modest.
Compare this to the same £60,000 being rental income from UK property, where the full amount is potentially subject to income tax in Spain at marginal rates of 37–47%, plus UK tax at source.
The difference in net after-tax income over a 10–20 year retirement is not marginal. It is transformational.
UK Property: Modelo 720 declaration annually. UK self-assessment tax return. Spanish declaración de la renta declaration of rental income. Potential Wealth Tax inclusion. Letting agent management. Maintenance coordination. Under the Renters’ Rights Act, any possession process now involves formal legal proceedings. EPC upgrade compliance by 2030.
Spanish Compliant Bond: No Modelo 720 required — the bond provider’s fiscal representative in Spain handles all tax reporting and pays tax directly to the Hacienda on your behalf. No UK self-assessment. No letting agent. No maintenance calls at 11pm on a Friday. You simply hold the investment and withdraw as needed.
For many expats, particularly those in later retirement, this reduction in administrative burden is itself worth considerable value.
UK Property: On death, UK residential property passes through UK probate (which can take 12–18 months or more), potentially subject to UK Inheritance Tax at 40% on the estate above the nil-rate band. In Spain, the estate may also be subject to Spanish inheritance tax (Impuesto sobre Sucesiones), which is paid by the beneficiary — not the estate — and the rates and reliefs vary dramatically by region. Getting two tax systems to coordinate on an international estate is neither simple nor cheap.
UK Long-Term Residence Replacing Domicile for Inheritance Tax Purposes
From 6 April 2025, the UK abolished the concept of domicile as the basis for UK Inheritance Tax (IHT) exposure, replacing it with a residence-based test known as “long-term residence.” Under the new rules, an individual becomes a long-term UK resident — and therefore subject to UK IHT on their worldwide assets — once they have been UK tax resident for 10 out of the previous 20 tax years. Critically, the exposure does not end immediately upon leaving the UK; a “tail” period applies, meaning that individuals who were long-term UK residents continue to be liable on worldwide assets for a number of years after departure (up to 10 years, depending on how long they were resident).
For a British national who has relocated to Spain as a Spanish tax resident, this has significant implications: any UK-situated assets — such as UK property, UK bank accounts, or UK-listed investments — will remain within the charge to UK IHT regardless of the new regime, since UK situs assets are always within scope. However, non-UK assets, including investment portfolios and cash held outside the UK, will only remain exposed during the tail period and will eventually fall outside the UK IHT net once that period expires. This is where a Spanish-compliant investment bond becomes particularly powerful: assets held within such a bond are treated, for UK IHT purposes, as a single non-UK situs asset (provided the bond is issued by a non-UK insurer and structured correctly), meaning they fall outside the UK IHT charge once the tail period has elapsed — unlike directly held UK investments or property, which remain permanently within scope.
In contrast, retaining UK property offers no such shelter; it will always be a UK situs asset and therefore permanently exposed to UK IHT at 40% above the available nil-rate bands, regardless of where the owner is domiciled or resident. For Spanish tax residents, a Spanish-compliant bond also delivers the added advantage of tax-deferred growth under Spanish law, with gains taxed only on surrender or withdrawal at Spanish savings income rates, making it a highly efficient wrapper for long-term wealth accumulation and IHT planning simultaneously.
Spanish Compliant Bond: The bond can be structured with named beneficiaries — including a surviving spouse as co-policyholder and children as beneficiaries. On the death of the first policyholder, 100% of the bond passes to the surviving spouse without probate, without Spanish inheritance tax, and without any interruption to the investment. On the death of the second policyholder, the bond is closed and proceeds pass to beneficiaries with significant inheritance tax efficiency. The bond bypasses probate entirely — no court process, no delays, no professional fees to unlock the asset.
For blended families, for those with children in different countries, or simply for anyone who wants their estate handled cleanly and quickly, this is a material advantage.
Spanish Compliance
UK Property: A UK property held by a Spanish tax resident sits awkwardly across two legal systems, two tax regimes, and two reporting frameworks. It is not inherently non-compliant — but it requires active, ongoing management to remain so.
Spanish Compliant Investment Bond: By definition, it is structured to be fully aligned with Spanish tax law. The Hacienda has approved the tax treatment. There is no ambiguity, no grey area, and no annual question of whether you’ve declared everything correctly.
A Worked Comparison
Scenario: Linda has a mortgage-free UK rental property worth £350,000 generating £15,000 gross rent per year. She is a Spanish tax resident in the 37% income band. She is considering selling and reinvesting the proceeds.
Keeping the property (annual position):
Selling and investing in a Spanish Compliant Bond:
The difference in net annual income: approximately £7,619 per year in Linda’s favour from the bond — before factoring in the administrative time saved and the inheritance planning benefits.
The numbers, modelled properly, often surprise people. The property feels like the safe, familiar choice. The bond can often be the better choice for various reasons.
Here’s a paragraph covering those points:
The Decision Framework: How to Decide
Sell if:
Keep if:
Consider a halfway house:
The Numbers Don’t Lie — But You Have to Run Them
Every expat’s situation is different. The right answer for someone with a mortgage-free, high-yielding property in a strong growth area who genuinely intends to return to the UK is different from the right answer for someone with a mortgaged, D-rated flat generating thin yields and mounting compliance concerns from 1,500 miles away.
What I would urge you to do is this: model the actual numbers. Net yield after all costs and combined tax. The CGT position if you sold now versus in five years. The EPC upgrade liability. The inheritance position. And then compare that — honestly — with what the same capital could generate inside a Spanish Compliant Bond.
UK property feels safe because it’s what you know. But in many cases, it is working far harder for HMRC and the Agencia Tributaria than it is working for you. The question to ask is not “should I keep what I’ve always had?” but “given where I live now, what is the most intelligent home for this capital?”
That question deserves a proper answer — and a proper financial model to back it up.
You can arrange an initial consultation to explore your situation [here].
You can also [read independent reviews of my advice and service here].
By Gareth Horsfall
This article is published on: 27th May 2026
My son turned 16 this year, and I guess it’s normal, especially in today’s world of instant gratification and media, that young adults would be curious about global political events.
It is therefore no surprise that he has been asking about the Iran/US war, how it started, and what the reason behind it is. Clearly, it is not easy to give a simple and quick answer to these sorts of questions, but often I simply answer, “follow the money.” If you follow the money trail, it will very likely lead to the main real reason why.
In the 2022 Ukraine/Russia conflict, we can see that the territory which has now been claimed by Russia in the eastern part of Ukraine, apart from being ethnically Russian, is also the most resource-rich part of Ukraine, holding the majority of Ukraine’s $15 trillion mineral wealth. The region accounts for roughly 80% of conventional oil, gas, and coal reserves, as well as critical minerals essential for defence and green technologies. The Dnieper-Donetsk Basin and the Donbas (Donets Basin) are the most resource-important parts of the country.
The east contains the overwhelming majority of Ukraine’s coal, natural gas, and conventional oil reserves. The region is also home to major deposits of iron ore, titanium, uranium, and lithium — materials that are highly prized for their use in aerospace, electronics, and electric vehicle battery industries. It’s no wonder that the war trudges on!
It is therefore no surprise that the recent Trump visit to China ended with reports (albeit from Trump himself — no word from China yet!) that China will now be buying more oil from the USA and less from the Middle East.
Is this a sign that China is not happy with recent events in the Gulf and has decided that its economic links and export-led economy are more tied to the US consumer than they would like to admit, and therefore they want to secure energy resources from them as well? Or merely a case that they are left with no choice?
Either way, the decision makes a lot of sense given that China is the largest consumer of oil in the world, and the US is the largest producer. In fact, the USA is, by a long way, the biggest oil producer in the world, pumping 13.58 million barrels of crude a day. Its nearest competitor is Russia on 9.87 million barrels of crude per day, closely followed by Saudi Arabia on 9.51 million barrels of crude a day. The three together account for 40% of the world’s supply! (The USA also now controls the Venezuelan energy infrastructure!)
So, energy reliance on the Straits of Hormuz is likely to decline in coming years given the chokehold that Iran has on the area. 20% of the world’s oil passed through the Straits of Hormuz prior to this war, and Europe was the most susceptible to Middle Eastern oil disruption. Trump is going to open up drilling in Alaska and, as more oil is pumped out of that region, then it’s likely that China and the rest of Asia will start buying more from Alaska as it comes online.
Just like I say to my son…..follow the money!
So, does this create a potential investment opportunity? It certainly does! Mining and oil exploration are starting to look attractive once again.
Our asset manager partners are keeping a close eye on the opportunities as they arise.
I know for the green investors amongst you this is the worst possible news, but the economic “West” can only protect its future development into a world of AI, robotics, and tech with access to primary resources which are not in what is considered economic or geopolitical hotspots.
I won’t blather on about this, but just to say:
In the meantime, a typical GBP multi-asset portfolio in a balanced risk profile returned around 17% p.a. over the last year to date, 31.49% over the last 3 years to date, and around 33% over the last 5 years. Average annual return over the last 5 years: 7.7%.
A typical EUR multi-asset portfolio in a balanced risk profile returned around 15% p.a. over the last year to date, 32% over the last 3 years to date, and around 31% over the last 5 years. Average annual return over the last 5 years: 5.27%.
The McKinsey Global Institute frequently discusses how similar cycles of pessimism and economic hardship impact consecutive decades and generations, meaning that every adult generation is likely to live through the same economic periods as the one before them at least once in their life, if not more.
I turned 18 (supposedly an adult!) in 1992. Prices hardly rose in real terms from 1992 until 2020. Then Covid, then Ukraine/Russia, and now the Middle East conflict. It’s now my turn to live through an inflationary period.
In 1973, an oil embargo lasted 6 months. Crude went up 400%. It never came back to where it started from.
1979 — The Iranian Revolution — prices doubled again.
Prices may fall back a little when the conflict settles, but are unlikely to settle back to previous levels. Given my eye-wateringly high gas heating bill over the last winter, I am not looking forward to next winter! But I still have the summer to try and avoid overheating!
Investing is the only way to protect your hard-earned capital. Do not sit in cash long term. Keep the things under your control under review — costs and your risk profile — and let the markets do the rest.
Inflation in Italy since 2020 sits officially at 18%, but the reality is that it is more likely 30–45% depending on location.
Between 5% and 7.5% per annum.
At a sustained 7.18% inflation rate, your money will halve in value in 10 years…
…this has the same effect as your healthcare costs, care homes, schools, trips for the kids and grandkids, flights, food, eating out, etc. doubling in value.
Making your money work harder for you is so important in periods like the one we are currently going through. Protecting your future is key.
At the moment I am working with a lot of clients to plan their UK Inheritance Tax liabilities and how to avoid them under the new UK Statutory Residence Test system.
Given the change to UK Inheritance Tax for non-UK residents, which will come into force in April 2027, it makes perfect sense for anyone who has already been away from the UK for more than 10 years, or anyone thinking of doing so, to take a good look at their financial affairs and see how they might be able to avoid UK inheritance tax, and in some cases avoid it altogether.
From next year, the rules will change from a domicile basis to a residence basis. Domicile was always a difficult link to break with the UK, regardless of where you were living in the world, and the UK always had the right to tax your worldwide estate if they deemed that you had sufficient ties to the UK at the time of your death.
Now, given the Statutory Residence Test rules, if you can show that you have been a non-UK resident for 10 out of the last 20 years, then your non-UK situs assets will not fall under UK inheritance tax law. UK situs assets will, however, still be subject to UK inheritance tax. When it comes to gifting assets to your spouse, then there are some new things to consider:
When both spouses have been outside the UK for more than 10 of the last 20 years and are considered non-UK long-term residents
You can no longer transfer an unlimited amount of UK situs assets between spouses. In this case, you can only transfer £325,000 on top of the nil-rate band, therefore a maximum of £650,000 before UK IHT at 40% is applied. If you have assets in the UK over £650,000 and qualify under the non-UK long-term resident rules, then the logical conclusion is that you look to move your assets outside the UK as soon as possible as part of your UK IHT planning exercise.
One of you is a UK long-term resident (has not yet qualified with 10 years’ continuous non-UK residency) and the other is a non-UK long-term resident
In this case, the logical conclusion is that, once again, you look to move your UK situs assets outside the UK, but by gifting them to your non-UK resident spouse. Your spouse would be subject to the same rule as above, i.e. a limit on the transferable amount at a £325,000 tax-free allowance plus a £325,000 additional non-UK long-term resident allowance, therefore £650,000 total. Anything over £650,000 would be subject to the UK’s potentially exempt transfer rules, i.e. if you live 7 years after the gift, then it is fully transferred and no longer in your estate for the purposes of inheritance tax in the UK. The obvious advantage of this approach is that your spouse is no longer subject to UK IHT and, if considered for IHT in Italy, then with some careful planning may be able to even reduce that to zero in Italy.
The alternative, depending on your own circumstances, is to keep the assets in your own name and move them outside the UK, taking the view that once your 10 years’ continuous non-UK residency has passed, then they no longer fall within your UK estate for IHT purposes.
Private pension funds
Unused private pension funds will be brought into the IHT net in the UK from April 6th, 2027. This is bad news for anyone with a sizeable pension pot in the UK. At the same time, the UK has imposed an Overseas Tax Charge on moving your pension outside the UK. In the past I have moved clients’ pension funds into a QROPS (Qualified Recognised Overseas Pension Scheme), and for European purposes those schemes were always located in Malta due to the compatible financial system there. Now, a transfer of this type for an Italian resident would incur a 25% overseas one-off tax charge.
Having stated this, given the prospect of paying a 25% overseas tax charge for moving your pension outside the UK versus 40% IHT on the fund in the UK, the former might be the better option. I am currently planning this action with some clients. This only makes sense where you have qualified as a non-UK long-term resident for IHT purposes.
A simple comparison between UK and Italian IHT
It is well known that Italy is a fiscal paradise from an inheritance tax point of view. They prefer to tax during life, but are very light on inheritance tax.
Whereas the UK will typically tax 40% on anything over £325,000 — the nil-rate allowance (plus an extra £325,000 for a spouse and a further £150,000 for primary house relief), Italy by comparison charges a mere 4% where the transfer is made between spouses and/or children, but the spouse and children each get a €1 million allowance (franchigia) before the 4% applies. In addition, the house price is based on the cadastral value (and not the market value) and so is much lower. Not only that, but if you structure assets correctly using an insurance portfolio wrapper, you can actually place any amount in the product and it does not enter into your estate for the purposes of making the estate value calculation.
For a family of 2 children and 1 spouse, you would pay just 4% on an estate over €3 million in value, plus the availability of any sum in an insurance portfolio wrapper without inheritance tax applied. Clearly, with some sensible planning, it is possible to reduce your estate dues to near zero in Italy.
Getting the right last will and testament in place
This all sounds very attractive, but what about the forced succession laws in Italy? If you are no longer subject to UK law, then how can you plan to leave your estate to your chosen beneficiaries?
Well, if you are an Italian citizen, then you probably don’t have a choice, but would be best speaking to a lawyer to determine if this is the case. But if you haven’t taken citizenship, then European law may allow you to nominate your home jurisdiction’s administrative law to distribute your assets to your chosen beneficiaries.
So, once again, with some careful planning you can probably even avoid Italian forced heirship rules. This is the realm of a good lawyer, and you would need to have a correctly worded will. Always take legal advice when considering your will planning options.
I wrote an interesting blog post on planning around the 7% pensionati tax regime in Italy. It was put into place in 2019 to challenge the Portuguese non-resident tax regime and has had limited take-up to date, but has become more interesting since April due to a change in the rules.
If you are interested in learning more about it, and more importantly the financial planning tricks, then you can read my post HERE.
By Gareth Horsfall
This article is published on: 19th May 2026
I could give song and verse about why it is a good time to sit in cash based on high valuations in equity markets or Bond prices being low, but my job is about long term financial and tax planning for people who are living in Italy. Therefore, 99% of the time the answer to the question will always be to invest and not sit in cash.
That might sound like a simple and quick reply to the question, but there is really only one instance when we would advise someone living in Italy to stay in cash for any period.
For anyone who needs cash in the short term — for a renovation of their Italian home, an Italian property purchase, or a major life event, money to support income needs or care costs etc — keeping money in cash is sensible, regardless of interest rates or market returns. Cash is stability, and stability has a value when we have expenses or liabilities, which can be quantified both monetarily and the term over which they need to be paid.
However, for all other long‑term goals — retirement income, future healthcare needs, supporting children or grandchildren — cash is a terrible solution. Over long periods, inflation erodes purchasing power far faster than cash can grow and if you are planning for life in Italy it is no different to anywhere else.
Even when interest rates appear attractive (and sometimes cash rates are better than that offered by the markets, but for very brief periods) they rarely keep pace with rising prices over a decade or more. Markets fluctuate, but over time, they have consistently outperformed cash.
The same principle applies today that we have always applied for our clients. Cash has a role, especially for short term needs.
But for long term goals, investing remains the most reliable way to preserve and grow purchasing power.
Inflation never disappears — and cash alone cannot protect you from its long term effects.
Italian life can be much cheaper, in many ways (food, access to services [beaches, countryside, cultural venues], eating out at restaurants etc) than life in other countries, but it still does not negate the need to invest for your long-term future rather than leaving your money sat in cash.
(At time of writing you can expect to get back, on average, a 2% return from your cash in EU based deposit accounts. If you lock in for any specific term, you may be able to get some higher rates but then you lose the liquidity of your funds)
