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Fund managers, ethics, green issues and sustainability

By David Hattersley
This article is published on: 18th February 2021

18.02.21

The impact of both Brexit and the Covid 19 pandemic have given us all time to reflect on the world we live in. As consumers in the developed world, we are perhaps more aware of the impact we make on our planet. The words “Sustainable” and “Ethical” spring to mind.

So where does one stand on ethics and sustainability? As individuals, it’s very easy to say “we are Green”, but then travel 70km to stock up on our favourite brands of frozen convenience meals. Most of us, due to “lockdown”, now spend more time cooking and preparing our meals at home.

How far are major companies prepared to change too? Coca Cola has announced plans to make a paper bottle and already has a prototype that can be recycled, which was developed in the Brussels R&D centre. But, whilst that is a very applaudable, one company has gone even further.

I have to admit that there is an affection for them as I worked in one of their divisions for two years prior to a career change to Financial Services. One of the biggest global consumer companies which operates in 190 countries is Unilever. “Love or loathe it” to paraphrase Marmite, they have taken what some may consider a risky strategy. Not only do they try to ensure that the raw materials that go to make their products are as green as possible, they have taken what may be considered a leap of faith. Sustainability and ethics are not only about “green principals”. They are insisting that every part of its global chain of suppliers provide a “living wage”, and in some cases double that, by 2030. These include smallholder farmers as well major direct suppliers numbering in total 60,000. As the CEO, Alan Jope, said in a statement on the 21st Jan 2021, “The two biggest threats that the world currently faces are climate change and social inequality.”

ESG Investing

As part of a developed area of the world we should all make a choice. Do we support the ethics of a company that is looking to redistribute wealth and act in an ethical, sustainable way, or do we just look at price rather than value? Have the events of the last year been our wake up call? Morally, rather than just looking at saving tax, or short term political gain and expediency, we should consider what the real legacy is that we leave our children and grandchildren on this planet that we share.

The same questions will be applied by our fund managers, in particular those that focus on ethics, green issues and sustainability. Are they the best choices for the future? I believe so. These specialists have far greater resources than I could ever have to research this “new world” we are entering, and are better equipped to look at the longer term than I am. I would be happy to provide a portfolio of these specialist funds to anyone who is interested, so feel to contact me on any of the points raised.

Prochaines échéances fiscales et guide 2021 des impôts en Espagne

By Cedric Privat
This article is published on: 15th February 2021

15.02.21

Que vous viviez en Espagne depuis de nombreuses années ou que vous soyez un nouvel arrivant, vous êtes soumis à certaines déclarations obligatoires et devriez donc être concernés par une ou plusieurs échéances listées ci-dessous.

Ces dates sont inchangées depuis plusieurs années et devraient le rester.

Modelo 720

Modelo 720

Déclaration informative mais obligatoire sur les biens et avoirs à l’étranger. Vous devez présenter ce Modelo 720 si la somme de vos actifs est supérieure à 50 000€ dans une ou plusieurs des trois catégories:

  • Comptes bancaires situés à l’étranger
  • Titres, droits, assurances-vie et placements gérés ou acquis à l’étranger
  • Biens immobiliers et droits sur les biens immobiliers à l’étranger

Les années suivantes, il n’est demandé de représenter le Modelo 720 qu’en cas d’augmentation de plus de 20 000€ par rapport au capital initialement déclaré.

Des sanctions sont possibles en cas de non respect de cette déclaration.

À déposer avant le 31 mars.

Déclaration De La Renta

La déclaration d’impôt se fait entre les mois d’avril et juin. Vous pouvez soit l’effectuer directement sur internet, soit prendre rendez-vous avec un

conseiller du Trésor Public (Hacienda), soit léguer cette tâche à un “gestor” (conseiller fiscal).

L’année fiscale en Espagne va de janvier à décembre, vous déclarez donc vos revenus de l’année précédente.

En Espagne les impôts étant prélevés à la source, Agencia Tributaria n’effectuera qu’une vérification. Dans la plupart des cas, vous ne paierez pas de supplément.

À déposer avant le 30 juin.

Impuesto Sobre El Patrimonio (Catalogne)

Impôt sur le patrimoine: cette déclaration est obligatoire si votre patrimoine brut (sans déduction

des dettes) est supérieur à 2 000 000€ ou votre patrimoine net supérieur à 500 000€.

La résidence principale est exonérée jusqu’à 300 000€.

À déposer également avant le 30 juin.

Afin de vous aider à mieux comprendre la fiscalité en Espagne, Spectrum a créé le “Guide des impôts en Espagne 2021” (document en anglais).

Ce guide vous aidera à comprendre les règles de résidence fiscale locale et les impôts sur le revenu, les successions, les investissements, la propriété et les retraites.

Vous pouvez librement télécharger ce document sur notre site et dans le même temps, si vous le désirez, vous abonner à ma newsletter “actualités financières et fiscales en Espagne”.

spectrum-ifa.com/cedric-privat/spanish-tax-guide-cedric-privat

Je reste à votre disposition pour vous apporter des informations complémentaires.

New Spanish bank charges post-Brexit

By John Hayward
This article is published on: 11th February 2021

11.02.21

If you bank with Sabadell, you may well have noticed that they are charging you for transfers in and out of your account. Although you may have an account that didn´t attract changes before Brexit, it could do now. When approached by a client of mine, who has a Premium account with Sabadell, their response was, and I paraphrase “because we can”, using the Bank of Spain rule book to justify the charges. It is because the UK is no longer in the EU. It appears that these charges are being applied to ad hoc transfers as opposed to regular payments such as pensions.

I have heard of other instances where transfers have been made from the UK using a currency exchange company. Currencies Direct, for example, have stated that they will cover the charges made by banks as they feel that it is incorrect and goes against the SEPA (Single Euro Payments Area) agreement, challenging the actions of the banks.

Solutions

  1. Close the account with Sabadell. (This is probably not convenient for many)
  2. Tell Sabadell that you will close the account if they continue to charge. (You will probably not get too much of a reaction to this one)
  3. Instead of transferring money as and when required, which is something many people do, set up a regular payment.
  4. Make transfers via companies where you can have an account in GBP and another in Euros. When the money is received or paid by Sabadell in Euros, from or to an EU based account, they do not charge.

I understand that other banks are also making charges when they did not before Brexit, so check with your bank. You do not have to just accept what they are doing.

Cash is King?

By John Hayward
This article is published on: 10th February 2021

10.02.21

What are investors doing with their cash?
Last year, Quilter, a British multinational wealth management company, conducted research* with 2,000 UK investors. The Covid-19 pandemic has provided many investors the opportunity to save more than they were before. However, many are either choosing to lock this money in a bank account or are waiting for what they believe is the ‘right’ time to invest in markets. But when is the right time to invest?

The research also found that most of those surveyed don’t understand the potential risks that having too much of their savings tied up in cash can have on their financial plans over the long term.

More recently, Quilter reached out to a sample of their international customers and found that the very same sentiment was shared by them. Many investors are sitting on cash that is not necessarily working for them and they could be missing out by being too cautious with their money.

Prudential have reported that, according to the Bank of England 28% of households have seen savings increase in 2020. That could mean they have a cash pile sitting unproductively earning minimal interest.

We understand that people are concerned about the future, even more so now with Covid-19 in play, but we also know that interest rates are likely to stay low for the foreseeable future whereas as inflation remains in the background. Many were waiting (years) for Brexit to go through and then Covid-19 came along and now they are waiting for this to go away before taking action with their money. In the meantime, the value of their cash has gradually reduced whilst those invested have seen the benefit of being so.

Here is a link to Prudential’s Investing for Beginners for those who are would like to know more about some investment basics and we can provide additional guidance.

Investing for Beginners | How to Start Investing | Prudential

There are many articles which call themselves ‘Investing for beginners’ but maybe a better place to start is to simply understand the ‘point’ of investing. Why could it be a good idea? Why should you consider it?

To find out how we can help you decide how best to plan for your current needs and those of the future, contact me today.

Is it necessary to have a Spanish will and a British will?

By John Hayward
This article is published on: 9th February 2021

09.02.21

Dying without a will can have serious consequences for the people you care about, making it hard (or even impossible) for them to claim what is due to them. Even with a will there may not be enough detail as to what assets the deceased had, which is why it is vital to have to have a separate list of all your property including bank accounts and investments, as well as details for key contacts (lawyer, accountant, financial adviser).

Now we are talking about two different countries with two different sets of probate law and two different languages. Although you may hear of “international” wills, the fact is that there could be conflict with one will trying to deal with, effectively, two different estates.

What tends to put people off making a will is:
a) Writing a will makes the certainty of death even more so
b) Cost

If the cost is a problem (around €200 for Spanish will and £200 for an English will), it is important to think of the subsequent costs, inconvenience, trauma, and potential loss of assets, by not making a will. It is generally considered wise to have a Spanish will to cover Spanish property and a British will to look after everything else.

We can help you deal with both types of will and save those who you wish to benefit a whole lot of problems.

*Note that England and Wales, Northern Ireland, and Scotland have different processes

Domicile re-visited – has Brexit had an impact?

By John Lansley
This article is published on: 8th February 2021

08.02.21

This article is aimed at those living in Andalucia, but also applies to the rest of Spain and further afield.

UK domicile has always been a rather difficult topic, but, as it determines whether UK Inheritance Tax (IHT) will apply to your estate or not, it has always been important to understand how it works, especially since Brexit.

Inheritance Tax in Andalucia provides much more generous exemptions. So, is it a matter of choice? Are you able to choose which Inheritance Tax regime applies to you?

Domicile
Firstly, some ground rules. As far as the UK HMRC are concerned, if you were born in the UK, the probability is that you will have a UK domicile of origin. Unless this changes, at your death your estate will be exposed to UK IHT, and this applies to your assets anywhere in the world.

If you are not domiciled in the UK, only UK assets will be subject to IHT. So, straightaway, it’s clear there can be a huge advantage in not being UK domiciled.

Example
For example, imagine someone who lives in Andalucia and is tax resident there, owns a house in the UK worth £300,000 and has £300,000 worth of assets outside the UK. If UK domiciled at death, his estate would face a bill of £110,000*. If domiciled outside the UK, the UK IHT tax bill would be zero.

So, on the face of it, losing his UK domicile would make sense as it would save his heirs £110,000 (don’t forget Spanish Inheritance Tax! See below). But is it as simple as that?

Can I change my domicile?
Changing domicile is very difficult in practice. In the old-fashioned sense of emigrating to another country, where all UK links were severed and new ones established with your new home country, you might easily acquire a domicile of choice elsewhere. However, these days, when moving to Spain or France, or another country close to ‘home’, it is not so easy – for example, retaining a property in the UK, having UK investments and income sources, and even writing your Will under English Law, can all demonstrate that you have not sufficiently severed your links and acquired a new domicile.

Intentions
Beyond simple facts such as these, domicile also hinges on intentions. So, someone who moves to Spain and vows never to return stands a better chance of losing UK domicile than someone who is pretty sure that, when poor health and family pressure become significant, a return to the UK is almost certainly going to happen.

Inheritance Tax in Spain
Spain’s Inheritance regime is different to the UK, in that it applies to those who die in Spain and also to assets situated in Spain. It is the recipient of an inheritance who pays the tax, and the amount depends upon the relationship between beneficiary and deceased.

As mentioned above, Andalucia’s Inheritance Tax rules are very generous, and an estate of the same size (ie, £600,000 or equivalent) located in Andalucia could attract no tax at all, if all the assets are left to the deceased’s children, for example, but a more distant beneficiary, or an unconnected person, would likely see tax having to be paid. Other Spanish regions are not so generous and bigger bills would ensue, as would be the case in many other countries, so it pays to check carefully.

pensions Spain

Brexit
So, has Brexit had any effect on this? Not in terms of UK and other Inheritance Tax laws themselves, nor Wills, but perhaps in the sense that your thoughts about moving back to the UK in later years might have been changed, especially if you have a non-UK spouse (due to the tough new income requirements in such cases). Or you might have UK assets that fall foul of various rule changes, and you need to consider making changes which could have an impact on your domicile, for better or for worse.

Loss of freedom of movement
If you have spent a lot of time in Spain in recent years, perhaps had a ‘foot in both camps’, and enjoyed the freedom of being able to come and go as you please, the recent realisation that you need to be rather more specific about which country you are based in might have meant looking closely at such things as where you pay tax, healthcare access, Wills, driving licences, bank accounts and other investments, and many more. Domicile and Inheritance Tax exposure in both the UK and Spain should have been part of the review because a wrong decision could prove costly.

Equally, if you left the UK after 31 December 2020, or considering doing so, you might find that the requirements for residence in Spain are too much of a hurdle and your intentions of remaining in Spain indefinitely (and saying goodbye to UK tax concerns) have had to be shelved and replaced with the alternative of spending much less time in Spain each year, with the resultant impact on domicile and UK IHT liabilities.

Wills
Don’t forget that your Will is an integral part of domicile and Inheritance Taxes planning in both Spain and the UK. Now is a very good time to consider whether yours needs to be updated.

So, as always, it’s vital to obtain proper professional advice, and this is a subject that, while perhaps not affecting you personally, could have a tremendous impact on the long term wealth of your family. Brexit has generated a number of less than obvious changes – domicile isn’t an obvious one, but it is certainly something that should be given careful thought.

*NB other exemptions and reliefs are available that might reduce the liability.

Document pour mieux préparer son décès

By Spectrum IFA
This article is published on: 4th February 2021

Document pour mieux préparer son décès

Benjamin Franklin disait: “En ce monde rien n’est certain, à part la mort et les impôts.” Cette réflexion peut paraître pessimiste mais elle est néanmoins réaliste.

En ce début d’année 2021, nul besoin d’alimenter la morosité ambiante; et pourtant, n’oublions pas la réalité.

Personne ne souhaite laisser ses proches dans l’embarras lorsqu’il ou elle viendra à partir (le plus tard possible!). Alors quelque soit votre âge, pourquoi ne pas anticiper et faire en sorte de ne pas ajouter au deuil des vôtres des complications administratives qui pourraient être facilement évitées?

Afin de vous y aider, Spectrum a créé un document récapitulatif (pdf à remplir) regroupant l’ensemble des informations relatives à votre situation actuelle. Il résume vos données personnelles, fiscales, financières, vos contacts, vos mots de passe, vos assurances, vos factures à résilier, etc.

Il vous suffira ensuite d’envoyer ce document à une ou plusieurs personnes de confiance (conjoint, enfant, avocat, notaire, “gestor”, conseiller financier, à qui bon vous semble) qui se chargeront de le conserver en lieu sûr.

Financial Advisers in spain

Vous pouvez librement télécharger ce document sur notre site et dans le même temps, si vous le désirez, vous abonner à notre newsletter “actualités financières et fiscales en Espagne”.

     

    The Spectrum IFA Group is committed to building long term client relationships. This form collects your name and contact details so we can contact you about this specific enquiry. For further information, please see our Privacy Policy.

    Currency Exchange and the benefits of using a specialist provider

    By Spectrum IFA
    This article is published on: 2nd February 2021

    02.02.21

    Relying on a bank to transfer currency is an expensive option. Currency transfer specialists provide competitive terms, secure, swift transactions and a range of other benefits including regular payments, forward contracts and rate tracking alerts.

    At The Spectrum IFA Group we work with Smart Currency Exchange to deliver the best possible rates, service and support for our clients.

    Whilst nobody can predict exchange rate direction, the relative strength (or weakness) of the euro is relevant for most of us. I attached a weblink to Smart’s 2021 quarterly currencies forecast.

    Smart Currency Exchange
    Quarterly Forecast 2021

    A historic Presidential election, Brexit deal and global pandemic sent currencies in directions that no one could have predicted in 2020.

    Does that mean matters will settle down in 2021? We wouldn’t suggest you bet your transfers, your property budget and your future plans on that!

    Fresh uncertainties for the year ahead bring new challenges for economies – and currencies – too. So, predicting the pound’s movements accurately can be a near-impossible task – even for the major banks.

    I invite you to read this quarter’s currency forecasts, but with a strong suggestion that you do not base any decisions on them. Predictions for GBP/EUR range between 1.06 and 1.28 over the next 12 months!

    Smart Currency Exchange

    What’s in your Quarterly Forecast?

    Post-Brexit special – what happens now?
    Looking to buy a property overseas this year? What do you need to consider in a post-Brexit world? Our resources section can help.

    New and improved tables and charts
    How are economies coping in the midst of the pandemic? Our new charts and tables offer a deeper insight.

    Expert analysis sections
    Smart’s Senior Risk Management Analyst offers his insight and opinion – do you agree with him?

    Your next move?
    In this climate of uncertainty, how should you plan for the future?

    For any further information on currency exchange, please contact your local adviser or please send an email to: info@spectrum-ifa.com

    Financial Advisers in France
    Financial Advisers in spain
    Smart Currency Exchange

    Financial and Retirement Planning – Cash flow Modelling

    By Chris Burke
    This article is published on: 2nd February 2021

    02.02.21

    Many people seek financial advice, or financial planning, but if you asked them what they would like to get out of it, most people would probably say clarity on their finances, planning how to make their monies work and to have what they need in retirement, or partial retirement. Only 45% of people in Spain save into private pensions, and now with the government reducing the amount you can save that way tax efficiently, retirement planning is even more important.

    Most financial advisers will look at your assets, see what you are doing, talk through why, then recommend a product to improve what you are doing. There is nothing wrong with that, in fact that is part of what we do, however this isn’t really giving people what they hoped to get out of the meetings/talks.

    A key part of helping people with their finances, as well as making their monies work, is real life planning of what they have now, what their goals are and showing them how to get there. People take in and understand much more visually, as most of us know; in fact 65% of us are visual learners. That’s why it’s important that when planning your finances you consider using a visual modelling system that shows your monies, what they are doing, future monies potentially coming in, and if you save ‘X’ amount into a pension/property/investment this will be the outcome. For example, which of the below would you prefer to see as your advice?

    ‘We recommend you place your €50,000 with ‘X’ company, and over the years achieving ‘X’ % return. Also, save ‘X’ a month in a savings program and both of these at retirement will give you ‘X’

    OR TRY THIS…

    Cash Flow Chris Burke
    Cash Flow Chris Burke

    What it really comes down to is the expertise of the planning, the knowledge of the financial adviser with whom you are working, and how much is actually put into planning your finances, rather than just making what monies you have work.

    This is just one example why I/we at Spectrum stand out as excellent professional financial advisers and planners, if you would like to seriously start planning your retirement and investments or review what you are doing now, don’t hesitate to get in touch, or sign up to my Newsletter below to keep well informed.

    Chris Burke newsletter

    UK pension consolidation living in Spain

    By Chris Burke
    This article is published on: 1st February 2021

    01.02.21

    Now more than ever, with the UK leaving the EU, if you have a UK pension/pensions you will need to make sure that they are being properly looked after and managed. This needs to be by someone who can legally practice in the country where you are tax resident. Many UK pension companies are no longer able to give advice to those living outside of the UK, meaning you could have difficulties accessing, managing and securing your pension moving forward. A local adviser also has the advantage of knowing the local regulations, so is able to make sure you are adhering to the rules in addition to being as tax efficient as possible.

    When people approach me to speak about their UK private or company pensions, they usually are not clear on:

      • What they are invested in, and whether the strategy is appropriate given the stage of life they are at now
      • How investment decisions are made, who makes them and when
      • The costs of management, what they are and are they efficient
      • How to access the pensions, particularly doing it tax efficiently living in Spain
      • How to consolidate multiple pensions, reducing costs and creating greater annual gains

    When I ask most people what their pensions are invested in, what the annual returns are and when they last reviewed this, they usually don’t know or can’t remember. One of the reasons for this is that being outside of the UK makes all this all the more difficult to manage, and even more so now after Brexit.

    Or, if they do know the answer to my questions, they have now found they cannot receive any advice from UK pension companies or UK based financial advisers moving forward.

    Consider consolidating several pension pots

    If you have several different pension pots, there are potential advantages if you consolidate them into one. These include:

    • Simplification of administration and keeping track of your pensions
    • Managing your pension savings more easily and effectively, including potential tax liabilities knowing local, Spanish rules
    • Saving money if you can transfer from higher-cost schemes to a lower-cost one
    • Opening up a greater choice of investments if you are consolidating your pension pots into a flexible scheme

    In many cases, the first step would be to locate your pensions and then evaluate what you have, how they work, what your options are and then have these managed effectively.

    I help clients consolidate their UK pensions, managing them efficiently and effectively, planning for when they want to access them integrating with their tax situation and lifestyle. We can help you achieve all this, giving ongoing advice and moving forward making sure you access you pension tax efficiently, adapting to your life as it changes along the way.

    For example, if you are over 55 years of age and currently on the Beckham Law, did you know you can cash your UK pensions in, potentially paying no tax in the UK, and potentially none in Spain? This is because on the Beckham Law, all ‘non-Spanish’ income is tax exempt (this depends on your personal circumstances) and being a NON-UK resident, you have no tax liabilities there either.

    If you would like to discuss your various UK pensions and what your options are, feel free to get in touch.