Viewing posts from: November 2000

Legge di Stabilita 2014

By Gareth Horsfall
This article is published on: 1st January 2014

Legge di Stabilita 2014

There have been some interesting points from the new economic laws introduced in 2014 The main ones that might affect you are below, and for some of you, you might wish to hold your breath..

Rentals – Goodbye Cash
From 2014 owners of properties in Italy, which they rent, will be expected to have the rent paid only through trackable methods of payment. i.e through a bank account. (I assume that means Italian or overseas bank as long as it is trackable) Penalties of sanctions against both parties (renter and owner) can be made if they are not adhered to and subsequently found out. The only thing that seems to be excluded is public buildings, such as Case Popolare. I have not seen nor found the supposed sanctions that they intend to impose for non compliance and neither can I find information on how they intend to police it.

Daylight robbery
In 2014 the imposa di bollo on securities and deposit/bank accounts in Italy will continue at €34.20 per account. Great news I hear you say! Maybe, but then a new rate of IVAFE (the tax on overseas assets) has been announced of 0.2% on the amount (at 31st Dec) that will replace the previous 0.15% in 2013.

Minimum reporting threshold for funds held abroad
If last year was the year for confusion about how to report assets held abroad then, at least, in 2014 they are offering some further clarity.

As of 2014, there will no longer be any minimum threshold when reporting assets held abroad. Previously, any amount below €10000 was not expected to be reported, but from 2014 all amounts, no matter how large or small, will be expected to be reported on the RW form as of 31st December.

Those are the main points that will be affecting you in the years to come. Certainly for anyone with any financial assets the increased bollo is a blow. As always seems to be the case in Italy, at the moment, most of these taxes are self defeating in that they pull more money into the Government coffers and pull it away from the pocket of those who could spend it and create future economic growth. Incentives are being offered to business owners and start ups to stimulate business growth in Italy, but, honestly, at the current levels of taxation it is impossible to see why an entrepreneur would want to set up in Italy when the chances of success due to tax and red tape burden are so great.

The sad truth is that it is going on all over Europe to reduce National debt levels and will continue for some time to come. We will all have to swallow the bitter pill for the time being and just plan to be more effective and reduce tax liabilities where possible.

LE TOUR DE FINANCE IS COMING TO ITALY

By Gareth Horsfall
This article is published on: 13th September 2013

Following the success of Le Tour de Finance in France, The Spectrum IFA Group, in collaboration with Currencies Direct, is proud to announce that Le Tour de Finance for expats will be arriving in Italy. On the 26th and 27th September 2013 Le Tour de Finance will be making its first appearances at the Circolo dei Forestieri, Bagni di Lucca and Ristorante Pomerancio, Umbertide, respectively. Le Tour de Finance brings professional experts in expat finance, in Italy, closer to you.

The following professionals will be speaking on the day:

Currencies Direct
Talking about how to save money on currency transfers and making the transfer process easier.

Studio Gaizo Picchioni, Cross border specialist commercialisti, Judith Ruddock
Discussing the latest changes in tax reporting and how it may affect you, and how to ensure that as a resident in Italy, you are ‘IN REGOLA’.

The Spectrum IFA Group, Italy: Gareth Horsfall and Michael Lodhi (Group Chairman)
Why financial planning for expats in Italy is important to avoid pitfalls and traps that you may not otherwise know about, or see.

QROPS. How UK pension holders can benefit from transferring their fund to a recognised overseas pension scheme.

Studio Legale Metta, Nick Metta
The legal and administrative issues faced when making an Italian or foreign will, for an Italian property and foreign owned assets.

Jupiter Asset Management, Rob Walker
Talking about the state of the world financial markets, economies and current government policies, how this may affect us all in the near future and how we can protect ourselves from the negative impacts of these decisions.

The events will commence at 10.30 and finish at 14.00 with welcome caffe and snacks on arrival, followed by brief presentations, a FREE buffet lunch and then time to ask questions of the experts and meet other like minded individuals.

Register for this FREE event by sending an email to info@spectrum-ifa.com or calling +39 3336492356

LIMITED AVAILABILITY.

Gareth’s personal story of profit and loss

By Gareth Horsfall
This article is published on: 2nd September 2013

I am not sure when my interest in financial services, financial markets and investment, actually began. However, I think I can attribute it in some part to a time when my mother and father were investing in the famous UK clothing retailer, NEXT. I fondly recall the enthusiasm in our house when they purchased the shares for 9 pence, then quickly saw the price grow to 99p (before selling) and bagging a handsome profit in the process. I never knew how much they invested, but no matter, they must have made a reasonable profit. The fact that the shares then climbed to over £10 over the coming years was always a bone of contention, but that is just one of the risks of investing.

It was shortly after this that I decided to give investing a go myself and took advice from the family friend who advised my parents to buy shares in NEXT. I remember his ’stock pick’ to this day: Fulcrum Kitchens and Bathrooms. I charged in with both feet and purchased £350 worth of shares at 24p each. And then forgot about them. The next I knew I received a notice of the winding up of the company. The ordinary shareholders would receive zero after the sale. This was my first foray into the world of investing.

However, I wasn’t deterred. My next opportunity didn’t come until a few years later when my grandparents gifted £2000 each to my sister and I. This time I was less speculative and went along to the financial adviser at my bank at the time. He advised me to invest in a PEP (Personal Equity Plan) and place the money in a Balanced Managed fund. And then I forgot about it. It was some years before I would need the money (to clear some debts) and was surprised at the time to learn that the fund was now worth 50% more. An annual average return of 9%.

Years after this, when I had less money, after buying a house, I wanted to start investing again and so I started putting some money away into an ISA on a regular basis. And once again, I fell into one of the best known traps in the business. I thought I knew more than the experts. I invested my money in the tech boom shares around the year 2000. I don’t think this needs any explanation. I never recouped my losses, even years later, and I eventually switched the money into a highly speculative emerging market investment, which is where it remains today with the hope that one day it will regain its losses. This was another important lesson in my development to becoming a financial adviser.

Other factors also swayed my reasons for choosing this work and following my principles when dealing with people. My mother invested her life savings with a financial adviser who advised her, incorrectly, to invest her monies into technology shares around the year 2000. She suffered the same fate as me, but with more serious consequences given that she was a lot closer to retirement. I took over the management of her portfolio (at her request) a few years later. I decided then that people should benefit from what I did and that if I could not provide what a customer needed (in most cases, growth or income on their investments), then I should not be doing this work.

Experiences like these taught me a few lessons. Firstly, that well meaning friends can be detrimental to your wealth. That is not to say that they are always wrong, but quite often their advice can be skewed towards their own good and bad experiences and less towards a rational and objective view of an individual’s finances.

The second thing I learned was that I would only become a good financial adviser if I knew my work. I couldn’t expect to sit a few exams and be able to deliver good and safe advice for my customers. I had to understand my work, and so I committed to reading as much as I can. I still do so and, coupled with the experience I have acquired by investing through 2 of the worst stock market crashes in recent history, (2000 Tech boom and 2007/8 The Great recession), I feel I am better prepared to advise others who may not have access to the same information or experiences that I have.

Lastly, it was apparent that going to see a financial adviser was the wisest choice I made. I did not have complete control over these choices, but this turned out to be my best financial decision. So I can see the value in what I offer now, and see how I can be of use and real benefit to my customers

All in all, financial services are constantly changing. For expat finances, this is great news. The profession has changed for the better and serious professionals are filling the places of those who have left the industry or moved on. This has created an opportunity for me to deliver high quality financial advice to the Expat/English speaking market in Italy, a country which I have grown to love and where I wish to remain.

My aim is for the Spectrum IFA group to become the most trusted and recommended financial services group for Expats and the English speaking community throughout Italy.

If you would like to know more or speak with me, you can contact me on gareth.horsfall@spectrum-ifa.com, or call me on 0039 3336492356.

Top Tax Tips for Expats in Italy

By Gareth Horsfall
This article is published on: 4th March 2013

Here are my top tax tips for living or moving to Italy.

1. Beware of the DIY approach.
Always discuss your tax situation with an experienced and knowledgeable commercialista. Taxes in Italy are not that much different to other countries around Europe and you might be surprised at just how littel you have to pay. The DIY’ers rarely find the tax breaks and end up paying more than they need to.

2. A Tax Residence of choice does not work.
Just because you are spending 3 months of the year in the UK does not mean you automatically qualify for UK residency when in fact you are actually spending more of your time in Italy. The double tax treaty will not cover you in this case.

3. Don’t think you can hide.
If you an Italian tax resident (i.e you spend more than 183 day here a year), then the Guardia di Finanza can find you. There is always a paper trial, utility bills, mobile phone records, airline tickets, credit card and bank statements, as well as visual evidence from neighbours, gardeners, cleaners etc. It is much better to be ‘in regola’ and know that the knock on the door is highly unlikely.

4. Beware the UK 90 day rule.
Quite a few people I meet try to claim UK residency because they go back to the UK for at least 90 days a year out of the last 3 years. This is not a law and is ignored by the courts. The Italian tax authorities would swiftly brush this aside as an excuse if they were trying to determine tax residency in Italy or not.

5. Don’t rely on a double taxation treaty to protect you.
A double taxation treaty is merely a statement saying that you cannot be a tax resident of 2 countries at the same time. So, you have to be resident in at least one country in any one year. The Italian’s will quite quickly assume that you are Italian tax resident if there are any signs of regular/permanent establishment in the country.

6. Be very wary of trying to be non resident anywhere.
If you are claiming to be a non tax resident anywhere then you could misunderstand the rules of the countries that you are living in. It is possible but most countries will deem you to be tax resident even if you spend less than 6 months of the year in the country. They just find it hard to accept that you can be non resident anywhere.

7. Don’t forget to register your presence.
Some people move to Italy and then decide not to report that they are living there and try and live under the radar. It is illegal to NOT complete tax returns and and a criminal offence in Italy. Even if you are paying tax on pensions in other countries, have assets overseas or income from other sources, the tax code in Italy states that as a tax resident you are liable to taxation on your worldwide income and assets. However you might get some Double tax treaty relief’s from Italy for paying taxes in another country already.

8. Tax favoured investments in one country do not necessarily apply in Italy.
The classic example is the UK Individual Savings Account. (ISA). It is not recognised as a tax free account in Italy and is therefore taxed on income and capital gains. You might need to re-examine all your old investments and replace then with tax efficient investment for Italy (namely the Life assurance Investment Bond).

9. Watch out for tax free lump sums from pensions
The UK pension system allows a 25% lump sum pension payment on retirement. In Italy that lump sum is taxable and therefore it might be advisable to take it before you leave for the country. You might also consider moving the pension fund to a QROPS ( Qualified Recognised Overseas pension Scheme). This means you can put the pension outside the UK tax system, avoid having to buy an annuity and potentially avoid the 55% charge on the fund at death.

10. Don’t be worried about tax planning in Italy.
Life in Italy is great. Taxes are not that different to those in other European countries. If you plan early enough and do things properly you will not pay that much more than if you were a UK resident. I often tell clients that for a few hundred euros more, it really is not worth taking the risk.