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Viewing posts from: November 2000

The ABCs of Spanish taxation when investing in real estate in Spain

By Jonathan Goodman
This article is published on: 8th March 2017


For a long time, Spain has been considered a country of interest for real estate investors. It is a Western European country with many types of attractive properties available: residential, retail, offices, logistics, industrial, and more. And all this in a place that enjoys a stable legal system, over forty million consumers, and a great climate.

The Spanish tax system, however, is one of the most complex in the world. This being the case, it is essential to know the taxation associated to each of your investments in order to avoid surprises. We have written this guide as a quick introduction for first time investors. Nevertheless, you must consider it just an introduction since every property has its own peculiarities. We would be happy to help you make your investments a success.

This article was written by AvaLaw and first appeared on

The Spectrum IFA Group exhibited at the Barcelona International Community Day

By Jonathan Goodman
This article is published on: 26th October 2016


For the third year running The Spectrum IFA Group exhibited and supported the Barcelona International Community Day held at the Maritime Museum in Barcelona. A great venue and well organised, many new contacts were made as well as the deepening of existing relationships. Chris Burke’s presentation was very well received by a large audience of expats.

The event is very informative and totally in line with The Spectrum IFA Group’s modus operandi and we are certain to be able to assist many new and some not so new expats with their overall long term financial planning.
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Why it Pays to Make a Spanish Will as an expat

By Jonathan Goodman
This article is published on: 15th June 2015


While you are enjoying your new life and possibly a new home in Spain, it is understandable that you might not want to think too long or too hard about the future, particularly about matters pertaining to your Will and inheritance issues for your children and heirs. But this subject needs to be covered and fully understood sooner rather than later.

There are three central reasons for making a Spanish Will:

One – It avoids time-consuming and expensive legal issues that your family and heirs will have to resolve. You can – and should – make a separate Will to dispose of any assets located outside of Spain. A British Will, for example, has no bearing on your Spanish estate.

Two – Spaniards have to divide their assets equally among their family and heirs, and leave two-thirds of it all to their children. As an expat, you are exempt from this ruling and you can bequeath your assets to whomever you wish. Your estate will, however, be subject to Spanish inheritance tax, which is high when left by non-residents to non-relatives. In addition, expats resident in Spain are subject to the same taxes on any of their worldwide estate, too. Therefore, making a Will allows you to navigate these various taxes at your discretion.

Three – Your estate can become eligible to a 95 per cent reduction in inheritance tax. This reduction only applies to the first €120,000, but is not available to non-residents, so bear this in mind when drawing up a Will.

The Spectrum IFA Group in Spain are delighted to be able offer their clients a 15% discount when using the services of ‘AvaLaw‘, who over the last years have assisted clients from almost 50 different countries.

The story you are about to read is true; only the names have been changed to protect the innocent…

Mr. Rainyday and Mr. Blueskies were catching up over a beer in Barcelona on a sunny Friday morning. Mr. Rainyday had barely taken a sip of his beer before he was on his pet topic — complaining about Spain, his and Mr. Blueskies’ adopted home as of a few years ago.

‘This time its dad’s flat in Andalucía. It’s over a year and a half since his funeral, and I’ve only just got it transferred to my name. Plus, it’s cost me a fortune. There’s no way it’d be such a hassle back home. It’s a total scam!’

‘That’s funny,’ said Mr. Blueskies, ‘My dad died around the same time, had an identical apartment in the same building as your dad, and it only took us four months to get the apartment registered in my and my mother’s name. And, if I remember correctly, it didn’t cost that much, either.’

‘Really?’ asked Mr. Rainyday, ‘How’d you manage that?’

‘I don’t know. It all seemed pretty straightforward. Our advisor took care of everything for my dad. Was there a problem with your father’s Spanish will or something?’

‘Will? What will? Dad didn’t have one, but I thought you didn’t even need one in Spain?’

‘You don’t need one, but having one makes things a lot easier and cheaper for your heirs,’ said Mr. Blueskies. ‘Since my father had a Spanish will, I did not have to sworn-translate and legalize tons of documents, there were no surprises regarding the applicable law, no need to get certificates regarding which testament is valid according to the foreign law applicable to the inheritance, no need to pay lawyers to deal with all the unnecessary bureaucracy in all the countries, and no need to wait for a year or two to get the title of the apartment…’

‘I see…’ said Mr. Rainyday. ‘Anyway, what outraged me even worse than the bureaucracy, was paying the 60.000 euros of inheritance tax for the property worth 300.000 euros.’ 

‘Wow’, exclaimed Mr. Blueskies, ‘You paid that much, did you! We did not pay any taxes for inheriting my dad’s flat, since Roser advised my father to leave in his will 50% of the flat to my mother and 50% to me, so that we both could take advantage of the personal tax exemption of 175.000 euros that Andalucía had for all of us who were residing over there at that moment. What a difference, eeh, with some simple inheritance planning?’ Since Mr. Rainyday looked really sour, Mr. Blueskies changed the topic and started to speculate whether Barça is going to bring home all the 3 titles this season…

Clients of The Spectrum IFA Group are eligible for up to a 15% discount
on making a Will with AvaLaw. Contact us now for further information

Financial Independence: What’s your number?

By Jonathan Goodman
This article is published on: 16th February 2015


What does financial independence mean to you? Are you on track for a future free from financial stress? Do you know what your number is?

Knowing the answers to these questions could help determine how soon and how well you could retire, yet many of us don’t…

If you are financially independent you have amassed enough wealth to generate a passive income sufficient for meeting all financial obligations, without the need to work. Your potential for financial independence is dependent on your current net worth, your target net worth and the years remaining before retirement, as well as how much you spend. The more money you spend now and going forward, the more you will need to accumulate to support your lifestyle.

So how do you calculate exactly when you could comfortably retire?

Number Crunching

The first step towards financial independence is to calculate how much you’d need to save. A simple formula can tell you not only how much you will need, but also how close you are now to getting where you want to be:

  1. Study your statements and determine how much you require annually in order to meet all your financial obligations. Could this number be reduced? Are there any unnecessary expenses? Could home and car insurance premiums be reduced? Is downsizing your home an option?
  2. Determine what return you could get on your investments. As intimidating as the stock market may seem at first glance, it’s possible to assemble a portfolio that pays you 3-5% in dividends annually. This dividend income is cash paid to you monthly, quarterly, or annually and doesn’t erode your investment.
  3. Calculate what nest-egg you need to build to generate the annual income you require. Annual income required divided by the percentage return you expect to get. Calculations should include cash only, not property or assets.


  • This calculation does not account for inflation or taxes.
  • This calculation only covers essential expenses. Determine how much spending money you need monthly, then calculate the annual amount and add it into your figure.
  • Your life could change in the next few years, which means you’d have to recalculate. If you decide to upgrade your home or have a family, you’ll need a bigger number.

What’s Your Number?

Smoothing: Reduce Volatility and Increase Growth

By Jonathan Goodman
This article is published on: 15th January 2015


Investment Smoothing
Investment Smoothing is a process used in pension fund accounting by which unusually high returns in a given year are spread over a multi-year period. By taking an average of all the different values, smoothing can deliver a constant figure for shorter time periods.

Instead of simply sharing out what the fund makes or loses each year, a smoothed growth fund aims to even out some of the variations in performance. This process is what we call ‘smoothing’.

How Smoothing Mitigates Volatility
The logic behind smoothing is that it lowers the volatility of profit and loss credit from pension fund returns. During positive markets, some profits are retained by the underlying fund manager as reserves to be paid out during market downturns. This process dampens the volatility typically seen when investing in other types of long term mutual funds.

Smoothing from the Pru
The PruFund funds are designed to deliver smoothed growth by investing in many different investment areas. By investing in a range of assets the fund is less exposed to significant changes in the values of individual assets.

Prudential’s investment specialists will constantly look for the best opportunities for growth within a wide range of investment areas. Prudential apply a unique smoothing process to these funds to provide a more stable return, than if you were directly exposed to daily changes in the fund’s performance.

Prudential Smoothing: Reduce investment volatility, but keep the potential for growth.

Risk – Simply a Box of Chocolates?

By Jonathan Goodman
This article is published on: 7th January 2015


What is financial risk, and is it all down to chance?

Whether you are investing for your retirement or for more immediate financial needs, there are three factors that could keep you from achieving your goals: inflation, taxes, and risk. It is easy to plan for inflation and to reduce taxes, but risk is another matter as it is so unpredictable.

Types of financial risk to watch out for include:

Investment Specific Risk:

Risk that affects a very small number of assets.

Geopolitical Risk:

Risk of one country’s foreign policy unduly influencing or upsetting domestic political and social stability in another country or region.

Credit Risk:

Risk that a borrower will default on any type of debt by failing to make required payments.

Interest Rate Risk:

Risk that arises for bond owners from fluctuating interest rates. How much interest rate risk a bond has depends on how sensitive its price is to interest rate changes in the market.

Inflationary Risk:

The possibility that the value of assets or income will decrease as inflation shrinks the purchasing power of a currency.

Currency Risk:

Risk that stems from the changes in the valuation of currency exchanges. Fluctuations result from unpredictable gains and losses incurred when profits from foreign investments are converted from foreign currencies.


Risk of a change of price of a portfolio as a result of changes in the volatility of a risk factor. Usually applies to portfolios of derivatives instruments, where volatility is a major influencer of prices.

Liquidity Risk:

Risk that a given security or asset cannot be traded quickly enough in the market to prevent a loss (or make the required profit).

Diversification Risk:

Allocation of proportional risk to all parties to a contract, usually through a risk premium.


The use of various financial instruments or borrowed capital, such as margin, to increase the potential return of an investment.

Counterparty Risk:

The risk to each party of a contract that the counterparty will not live up to its contractual obligations.

Overcoming Risk: Prudential & Smoothing

Prudential Multi-Asset funds work by spreading your money across a number of different types of assets. Funds are designed to deliver smoothed growth through a number of investment options, such as company shares, fixed interest bonds, cash and property, balancing the risk being taken. So if one asset is falling in value, another may be increasing.

Risk: Simply a Box of Chocolates?

Understanding the importance of risk is a central pillar of financial planning. Risk can be measured and assessed; it can be managed. Learning how to do this is an invaluable aspect of becoming a successful investor.

Risk may be uncertain but it’s no box of chocolates. If you prepare for the uncertainty – do your research and seek relevant and informed advice – you can be fairly confident of what you’re going to get. It’s not all down to chance.

Certainty and Predictability for your Investments

By Jonathan Goodman
This article is published on: 1st December 2014


The PruFund range of funds are designed to spread investment risk by investing in a range of different assets, such as company shares, fixed interest bonds, cash and property – from both the UK and abroad.

Prufunds are managed by Prudential Portfolio Management Group Ltd (PMG), dedicated multi-asset fund managers with a team of over 30 economists, investment strategists, analysts and mathematicians, specialising in different areas of the investment world.

How PMG Manage Your Money

PMG believes that investment success should be built on clear philosophy, demonstrable processes and a team based approach. They believe that this will not only deliver superior returns, but also provide greater continuity and dependability.

They believe in the importance of asset allocation and the key role that multi-asset funds play as an investment solution for many investors. They also believe that asset allocation is a specialist skill which should, to avoid conflicts of interest, exist separately from the other investment activities in any fund.

PMG takes many factors into consideration when managing your money.

They focus on:

  • Minimising reliance on economic forecasting
  • Looking for irrational behaviour
  • Taking a long-term approach
  • Fund management
  • Asset-liability management

PruFund Growth Providing Smoothed Returns

PruFunds offer a unique smoothing process designed to help protect an investment from some of the daily ups and downs associated with direct investments, providing less volatile and more stable returns over the medium to long-term, in line with each fund’s objective and allowable equity parameters.

The Prudential PruFund smoothing process has two elements:

  • Expected Growth Rates (EGR) applicable to each of the funds, normally applied on a daily basis. The EGR is the annualised rate that is normally used to increase the value of your unit price each day, and they are set quarterly by the Prudential Directors having regard to the expected long-term investment return on the underlying assets of the funds.
  • Upwards and downwards pre-defined unit price adjustments are applied in line with fully transparent process requirements.

For more information on PMG and the PruFund range of funds or to contact one of our Financial Advisors to arrange a full financial review of your current situation please use the contact form below.

Do You Fear For Your Financial Future?

By Jonathan Goodman
This article is published on: 24th November 2014


How do you choose your investments when you are an expatriate?

International investors face many choices, and taking personalised advice can be vital, especially in the current economic climate. With high inflation and record low interest rates, volatility, complexity, uncertainty and a huge amount of change sum up the current state of the global economy.

Picking the right investment opportunity with maximum return objectives can be a risky and complicated process, and mapping a financial strategy that enables you to better navigate these turbulent financial times is a must.

The International Prudence Bond (Spain)

The International Prudence Bond (Spain) is a medium to long term bond designed with the needs of international investors in mind. Tailored to each market and sold via professional Independent Financial Advisers, it allows access to a range of unit-linked investment funds with the aim of increasing the value of the money invested over the medium to long term.

The PruFund Range of Funds includes guarantee options where the choice of guarantee can be linked to the anticipated year of retirement. The funds utilise the asset allocation expertise of the Portfolio Management Group and offer a truly global investment perspective.


  • Funds denominated in euros, sterling and US dollars
  • A minimum investment of only £20,000, €25,000 or $35,000
  • A minimum allocation rate of 100%
  • No set investment terms
  • Top-up facility from £15,000, €20,000 or $25,000
  • Cumulative allocate rate on top-ups
  • Flexible withdrawal options so clients can access funds when it suits them
  • PruFund Protected Funds guarantee


How Spectrum Can Help

Spectrum’s role is to provide Insurance Intermediation advice and to assist clients in their choice of Investment Management Institution. Our Financial Advisors can help you decide which investment opportunity is right for you.

For more information or to contact one of our Financial Advisors to arrange a full financial review of your current situation please use the contact form below.