Viewing posts categorised under: Spain

Mortgage Rates in Spain

By Spectrum IFA
This article is published on: 31st January 2020

31.01.20

At Spectrum International Mortgages we do an annual update on the rate development in Spain. We do this every year in February and this year will be no different.

As ever, the rates we mention are based on the market at the moment of publishing and we cannot guarantee that these rates will be available in the future, nor that they will be applicable to every individual case. Additionally, it is worth noticing that the banks in Spain still do not offer interest only mortgages, which means that both the fixed rate mortgages and variable rate mortgages are capital repayment loans.

Duration in years	rate in % (with correct client profile)
10	2.00
15	2.10
20	2.25
25	2.35
30	2.50

Looking at variable rates, we observe around 1.2-1.5%+EURIBOR

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As opposed to last year, we are now seeing that the Spanish banks have a bigger focus on financial profile rather than residential status. This means that although non-residents are still offered a lower LTV than residents, the fact that they are non-residents no longer has the same impact on rates, terms and conditions as it did last year around the same time.

The rates above are still so called “clean” rates, meaning that except for the first year, there are no other products from the bank attached. It is still normal practise for the banks to have clients set up e.g. different insurances, credit cards, investment funds or pension plans to decrease the rate. Arranging a mortgage through us, you will be able to avoid this in the vast majority of cases. Every case is handled individually and rates will vary depending on individual circumstances, but as a guideline, this is a realistic scenario for the moment.

How will that unfold for a mortgage of 280,000€?

To apply this in reality, let me provide you with an example of how a mortgage of 280,000€ could look when going through Spectrum International Mortgages:

Property price	400,00€
Mortgage amount	280?000€ (70%)
Duration in years	20
Fixed rate	2.25%
Monthly instalments	1,449.86€

Cash needed to complete the operation 168,000€ (30% down payment ->120,000€ plus approximately 12% taxes and costs -> 48,000€ = TOTAL of 168,000€

Products contracted for the first year: life and house insurance. After the first year both insurances can be cancelled with the bank and set up externally, which is normally advisable.

For more information, please contact our specialists in the mortgage team

Get a Spanish Mortgage Quote

Inheritance Tax in Catalonia

By Chris Burke
This article is published on: 27th January 2020

With all that has been happening this year, it could well have slipped many people by that significant changes have been made to the inheritance laws in Catalonia, particularly for those who are resident there and receiving an inheritance from someone outside of Catalonia.

Previously, spouses and descendants received great allowances in respect of tax due to be paid, starting from 99%. However, for those receiving inheritance as a descendant this has been reduced, at the worst to only a 60% reduction. This raises two main questions, firstly, what would the tax payable be for an inheritance, and secondly, is there a better way to receive this, for example, as a gift rather than an inheritance, which itself has different tax rates?

It is important to understand how an inheritance is taxed in Catalonia. Major factors are the relationship between the deceased and the inheritor, what asset is being received and where the money comes from, i.e. which country. In the UK it is fairly straightforward: if someone dies being resident in the UK and leaves you assets up to £325,000 there is usually no inheritance tax (paid by the estate); anything over this is taxed at 40%. However, in Catalonia it is not that simple (Surprise surprise, I hear you say!) and alongside what is declared and may be tax payable in the UK, you must also declare and pay the relevant tax in Catalonia. Any assets you already own can also be taken into the equation of what tax is payable.

Inheritance tax in Catalonia is paid for by the receiver, not the estate, and very importantly, you have 6 months to declare this inheritance, EVEN if you haven’t received it yet (this is from the date of decease) or you will be fined the following way on the amount of tax you are liable to pay:

5% in the following 3 months (i.e. months 6-9 since death)
10% from 3 months to 6 months
15% from 6 months to 12 months
20% plus interests after 12 months

But if you know that you will need more time you can ask for an extension of an additional 6 months during the first 5 months from the death. In this case, the surcharges described above will not be applicable and you will have an extra period of 6 months.

There are some discounts on inheritance tax in Catalonia. To start with, there is usually no tax to pay on the first €100,000 being received if you are a spouse or child of the deceased. For other descendants the allowance is €50,000. If you are an ascendant the allowance is €30,000 and for any other relation the reduction is €8,000.

From this point on, there are further reductions between 97-99% and there are also other factors to be taken into account, such as are the children under 21, disabled, or if you receive the main home (“vivienda habitual”), family business or shares in certain type of companies.

As you can see, the calculation is not straightforward. The quickest and simplest way, I feel, to give you an idea of what tax you would pay is if I give examples using the most typical scenario of people we help, which is of a parent resident in the UK leaving their child, who is living in Catalonia, an amount of money/assets not including property (as we said there would potentially be extra tax deductions for receiving this). The guidelines are shown below for someone tax resident in Catalonia, over 21 years old, owning assets themselves of less than €500,000. Note that the ‘domestic trousseau’ has also been included (the domestic trousseau is a tax on inherited household items, for example furniture, by default calculated as 3% the estate value):

Amount to be inherited	Tax due in Catalonia
€100,000	€84
€250,000	€6,969
€500,000	€29,888
€750,000	€64,908
€1,000,000	€109,297

One possibility we would check for a client is whether it would it be better to plan the future inheritance and anticipate it, receiving the monies through a donation that is taxed between 5% and 9% between parents and their children (with some specific requirements). Additionally, please note that if a previous donation has been made, this must also be considered in order to calculate the effective inheritance tax rate. We always suggest getting in touch to confirm exactly what the amount would be, and for help declaring it. For the assets themselves, it is worth knowing that many assets overseas are not always efficient to have while living in Catalonia.

For example, investments or ISAs in the UK are declarable and tax is payable in Spain on any gain annually, EVEN if you do not take any of the money, unlike in the UK. It is possible to have these monies in a Spanish compliant structure, still in sterling if you prefer, where you can benefit from the money growing through compounding and potentially greatly mitigating tax. This is where we help our clients to get organised efficiently and can manage the assets if needed.

If you have any questions relating to this article, would like help planning for this eventuality, or anything similar, don’t hesitate to get in touch.

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TAXATION UPDATE IN SPAIN

By Charles Hutchinson
This article is published on: 16th January 2020

16.01.20

We now have a new government here in Spain, albeit quite far to the left which could cause some more interesting changes in taxation. Watch this space.

WEALTH TAX
So far, the reinstatement of the 100% allowance for Wealth Tax (which was approved in 2011) has been delayed again for one more year as part of the 2018 budget extension, due to the recent era of no federal government being in place. Nor has the Junta de Andalucia made any moves to reinstate the allowance in the 2020 budget either.

MODEL 720 DECLARATION OF FOREIGN ASSETS
On the 23rd October 2019, the EU Commission filed a complaint in the European Court of Justice to the effect that Spain has not complied with the Commission’s findings in November 2015 namely that Modelo 720 deters businesses and private individuals from investing or moving across borders in the Single Market. Also these provisions are in conflict with the fundamental freedoms in the EU; this conflict affects free movements of persons, free movement of workers, freedom of establishment, freedom to provide services and the free movement of capital.

Furthermore, the Commission has claimed that by introducing late filing penalties and the labeling of these foreign assets as unjustified capital gains (which are not subject to the statute of limitations), it has breached EU law. Additionally, whatever the amounts involved, they are all subject to tax at the top marginal rate (45% in 2012) plus a fixed penalty of 150% in addition to the tax and further fixed penalties for failure to file, which are higher than the general rules on similar infringements. Spain, therefore, is liable to comply with EU law and to pay costs.

Although precedence does not exist in Roman law, a precedent was set in 2011 when the EU successfully prosecuted Spain over discriminatory Inheritance and Gift Tax rules. This ended with a Court resolution in 2014 that led to an amendment in Spanish Law and opened the door for reclaims of taxes paid over the previous 4 years.

The issue of the Declaration continues to be of great concern to many people in Spain, particularly the expatriate community. Some of the most vulnerable assets are foreign bank accounts. These can be easily switched into other foreign assets where reporting under Modelo 720 is not required and the taxation of income from them (if taken) is greatly reduced.

If you have concerns in this area, please contact me where I can assist you with the problem.

Source: JC&A Abagados, Marbella

Financial Planning for Business Owners in Barcelona

By Barry Davys
This article is published on: 8th January 2020

08.01.20

This is the first in a series of three articles on the challenges of financial planning in your personal life when you own a business or are a significant shareholder in a business. This first article is planning when starting a business. The next article covers planning when you have an established business. The final article, the one we all want, goes through what happens when you sell the business and find yourself cash rich.

When starting a business, it is the business that gets the attention and often your personal, non-business, financial position is left unplanned. I would recommend at this stage you do prioritise the business as if it goes well, your business is likely to be the driver of your wealth. It should certainly grow your wealth quicker than investing in funds, shares, etc. It will probably make you wealthier than investing in Bitcoin!

Making your business the priority, however, does not mean that you can completely ignore your personal finances or manage them on a “when I get round to it” basis. Owning a business means it is very important to do your own personal planning because success can ebb and flow and, especially for a new business, it can go bust. Making sure your own affairs are in order protects your family and may even allow you to start up again, if arranged properly.

I recognise that different companies have different characteristics and that this can affect your planning. I also recognise that owners of businesses in Barcelona should base their planning specifically on Catalan laws and taxes.

Planning your personal finances when starting a business

Product – tick. Business plan – tick. Website – tick. Instagram – tick. Business partner – tick. Financing – tick. So the business is good to go and will, of course, be a success.

I wish all of you who are starting a business the very best of luck. It can be a most rewarding experience, even though it can also be exhausting and stressful. However, the data shows us that whilst 80% of new businesses survive one year, only 30% make it past the 10 year point¹. This statistic shows you why your personal finances will continue to need your attention.

Planning points:
1. Recognise that personal money differs from business money. Keep it separate!
2. Get your affairs in order before starting your business. If you have children, make sure you have life cover. Get private medical insurance so you can be seen quickly and get back to work as soon as possible.
3. Know what your personal expenses are before you start the business. This can help you decide how much to take from your business each month. Do not start your business and then take only what you think the business can afford. This will push you into debt personally.
4. Conversely, when business is going well, don’t buy flash cars, boats, luxury holidays etc. until you have sold your business or unless you are Bill Gates, Elon Musk etc. and your company is doing remarkably well.
5. Keep an emergency fund in your personal finances of at least 6 months’ expenses in case there is a business “wobble”.
6. When getting equipment and vehicles for your business do not buy them in the early days of the business, especially if you have to put personal money into the business to make the purchase. Your financial risk is minimised if you rent or lease equipment. We can also now get cars on a “subscription” basis. This means that instead of buying or leasing you pay a fixed monthly fee for the use of a car. This is like renting a car from Avis but you rent it from the car company. If you need to walk away after six months, you can do so with no liability. This is available from several car companies in Spain.
7. Keep flexibility in your personal finances. Do not, for example, put money into pensions in the early days of your business unless you have additional reserves. We cannot access money invested in a pension until you approach retirement.
8. This may mean that you need to leave money in the bank. In Spain, that means we will earn, at the moment, virtually no interest. Accept that fact and make your money

¹Forbes, Fortunley and Business Wire. Statistics are USA statistics

So what is the outlook for 2020?

By John Hayward
This article is published on: 4th January 2020

04.01.20

How was 2019 for you? For many, it has been another year of uncertainty with an apparent lack of decision making by politicians which has led people to delay making their own decisions. For me, it was the year that I broke my ankle two days into a fortnight holiday. If only for that reason, it has not been my favourite year ever.

So what is the outlook for 2020? Questionable political leadership in the UK over the last 4 years has created a weak economic backdrop where investment firms have been unwilling to risk client money in the UK. That appears to be changing and, whether you agree or disagree with Brexit, certainty creates confidence. A known is far easier to deal with than an unknown.

The current problem is how exactly Brexit is going to go through and how long it will take. That is why top investment firms that we recommend spread their exposure globally and not just in the UK. Although most British people have been hung up about Brexit (me included), the rest of the world has been carrying on their business regardless, creating growth for our clients at a time when other people I have spoken to have been too scared to invest, waiting for that magic day when everything will be at its perfect investment point. This approach is almost guaranteed to fail, certainly in the long term. Taking a grip and making sensible, informed investment decisions now is vital without waiting for a politician to decide your short-term, and long-term, fate.

Since David Cameron announced in February 2016 that there would be a referendum on the UK’s membership of the EU, we have seen the following (to 31/12/19)*:

+12% – UK inflation
+49% – FTSE100
+30% – A low risk investment fund that we recommend for cautious investors
+4% – Average savings rate
-8% – GBP/EUR exchange rate

What these figures illustrate is that the person who invested, or remained invested, in February 2016, should now be pretty happy. Those who have decided to wait until they know what is happening are likely to have made nothing with their money remaining in a non-interest bearing current account. Their money is now worth 8% less when allowing for inflation. This “loss” is compounded for those living in Spain, receiving regular income from UK State and other pensions, by the fact that the exchange rate is down 8%.

How long do you, or can you, wait before arranging your finances for your benefit and not leaving your money propping up banks that still have issues? We have many satisfied clients who have benefited from our knowledge and expertise. In addition, with our experience of tax in Spain, we can help those living in Spain after Brexit, guiding clients who have UK investments and reducing the impact of the Modelo 720 asset declaration.

Whilst there is a new batch of uncertainty surrounding what Brexit deal will be put in place on 31st January 2020, and what trade agreements will be set up by 31st December 2020, there are positive signs for the coming year and the benefits of these can only be achieved if one is invested appropriately.

We can review your current investments, wherever they may be, and make sure that they are both profitable and tax efficient, both here in Spain and the UK.

*Sources
Hargreaves Lansdown
Financial Express
Swanlowpark

Spanish Succession and Gift Tax boost for non-EU beneficiaries

By John Hayward
This article is published on: 6th December 2019

06.12.19

Imagine that it is Saturday 1st February 2020. Britain has calmly left the European Union with trade deals in place with Australia, Canada, South Africa, the USA, China, Cuba, Afghanistan, Iraq, Iran, and Columbia (I did say imagine). It is possible that you have children who live in one of these countries and you are resident in Spain. 2 years ago your children would not have benefited from the European Court of Justice ruling (2014) which stated that children who live in an EU/EEA country should benefit from local Spanish rules and allowances when calculating Spanish Succession and Gift Tax. Since the decision in 2018 in favour of a Canadian (Canada is not due to join the EU), the Spanish Supreme Court have ruled that “connected” non-EU beneficiaries will also benefit from the rules of each Autonomous Region in Spain. What this means is that, even if there was a hard Brexit, your child in London would be treated as fairly as one in Valencia, Havana, or Beijing.

It is possible to reclaim overpaid Succession and Gift Tax. Please get in contact if you know anybody who has been a beneficiary of an inheritance using the allowances under the old rules. The claim could amount to many thousands of Euros.

Contact me for more information

Gifting your Spanish property can save tax

Investing some time in estate planning now will help to make certain that your wealth is distributed the way you want it to be and not end up in the taxman´s pocket. One example is where we have helped parents in Spain gift their properties to their children, who live in the UK, whilst the parents continue to live in the property. This could save thousands in future inheritance tax.

Positioning investments in tax efficient structures can also help protect against inheritance tax. We have the solutions.

One kind of hangover is enough………

By Chris Webb
This article is published on: 2nd December 2019

02.12.19

If you´re anything like me, you´ll be busy planning Christmas. Anything from where to see the best festive displays in Madrid, to trying to get your family EVERYTHING they want.

Christmas is an exciting time of the year for all of us. As a parent I still love that my children think Santa will make a personal appearance to our house and that he will be parking his sleigh right in the back garden (I have some doubts that they´re now just stringing me along, but I will continue to enjoy it while I can).

We´re all busy fitting in lots of social occasions, handing out gifts and cards and trying to squeeze in a party or two. However, there is also a serious side to the festive season: it’s very easy to overspend and overindulge and end up paying for it well into the new year.

Statistics show that most of us use credit cards to fund Christmas present purchases and to attend occasions we might not normally attend. Unfortunately, many people have problems paying back that debt after Christmas.

I have put together some tips to make sure you start 2020 on the right financial foot, and hopefully this will help you get through the festive season without a financial hangover.

1. Plan your shopping
Always write a list! My wife will laugh aloud at this as I am useless at writing lists BUT it is one of the most important things to do. Never just hit the shops; always write a list of who you want to buy for, an idea of what you want to buy and how much you want to spend. Without your list you´ll shop aimlessly and make purchases on a whim. You´ll lose track of your budget and spend unnecessarily.

Planning and making a list also means you can do some internet research to see what shops have the best sales, or if you could buy the gift online cheaper and save some money.
Research shows that people spend more than they can really afford on Christmas presents each year and end up with a credit card debt they didn’t anticipate after the ¨silly season¨ ends, so it is important to plan and make sure you know how much you can afford to spend.

2. Establish some ground rules
This is an important tip. Too many people get caught up gift giving. It’s nice to give and receive gifts, but it’s helpful to have ground rules. Have the conversation up front with family and friends to make sure everyone is on the same page. Agree on spending limits and who you will and won’t be buying for. This avoids offending anyone or any awkward moments at the Christmas table.

Being part of a big family, we decided to make it about the kids. If we didn’t it would mean buying a lot more presents and spending a whole lot more. When the whole family do get together for Christmas, which is rare due to the geographical situation of our family, then we do a Secret Santa for the adults where limits are set so everyone is on the same page.

3. Focus on personal value rather than financial value
All too often, people get caught up in spending money on gifts at Christmas and focusing on the financial value of those purchases. Instead, focus on the personal value.

From my own experience, I´ve had many a ¨nice¨ item bought for me, but the one present that means more to me than anything else is a framed picture where my kids used their hand prints to make a picture of two robins sitting in a tree (it has a very personal meaning). It has pride of place in my office and is appreciated far more than anything new, shiny or tech related.

Remember, it’s the thought that counts.

4. Avoid the financial hangover of festive season events
Festive season events can cause more than one hangover and let´s be honest, we don’t really enjoy any hangover.

Additional and sometimes unexpected events can really hurt the finances, as we never tend to factor them in to our regular spending habit´s but everyone thinks it’s ok to do it because it’s Christmas. Its amazing how these additional costs add up. Tickets to events, food & drinks, transport, new outfits…the list goes on and on.

If you are planning on being a social animal, think about the event before you go. Plan your whole evening and understand the whole cost of the event, not just the ticket price.

If your budget is a bit tight, be selective and choose the events you can afford to go to. You don’t have to go to everything. Don’t be pressured into attending something just because it’s Christmas. And remember, it’s ok to say no and you don’t need a new outfit for every event!

Finally, if you´re the host don’t be afraid to ask people to bring something to share. Whenever we plan an event, we always ask people to either bring a plate or bring a bottle. People are more than happy to help and generally aren’t expecting a free ride.

5. Make room for the new by getting rid of the old
This is probably more important when kids are involved. Why? Because they seem to have everything already and as they get older it becomes a struggle to know what to buy them. Generally, kids are going to get a lot of gifts. If you have children, you´ll know exactly what I mean. Don’t be afraid to ask them what they don’t play with anymore or what they don’t want anymore.

Look to see what you can dispose of. That’s a harder job before Christmas but can help financially if you can offload unused toys to offset new toys. I had this exact conversation with my daughter, Christmas 2018. All she wanted was a new iPhone, so after first agreeing with the wife to splash out on a new model, we then agreed that the old one was ours to do what we wanted with. A quick online sale gave us €200 which made the new purchase a lot less painful.

We also donate some items to charity; whilst that doesn’t help us financially, it makes a huge difference to others.

6. January sales
Post-Christmas sales can be a great opportunity to get a bargain, but they can also be a good opportunity to get sucked in and enhance the Christmas hangover. Do you really need to go out splurging cash just because there´s a sale? If so, then it’s important to go into the sales with a plan, just like in tip 1. Have a list of what you need so that when you go to the sales you go looking for specific things.

And remember, if you’re planning on hitting the shops with your credit card, you have already put pressure on that pre-Christmas.

7. Survive the school holidays with budget-friendly activities
This is important throughout the year but is still a big part of the silly season. Kids are about to start school holidays and it’s important to budget for entertaining them during that time.

There are so many free things to do with kids in and around Madrid. Most of this can be researched online and within our many local Facebook groups. You don’t need to spend a fortune. We´re lucky enough to have some fantastic parks nearby, some amazing countryside within a short drive and all at no cost.

Planning is crucial. If you plan the money you have available for the period it needs to last, you are less likely to feel the strain of not having enough money.

No Financial Hangover!

8. Plan now for 2020
Planning for 2020 and next Christmas is very important. Talk to your family early about the plan for next year and get the ball rolling straight away so you can be prepared well in advance. Plan birthday and Christmas presents so you can buy in advance and save spending more on less just because it was last minute.

The most important thing to take away from all our tips is to PLAN. Planning plays an important part in being in control of your finances and aware of what you can afford and how much you are spending.

I make no apologies for writing a sensible guide to avoiding the Christmas hangover. Most of us are too focused on the here and now, ensuring we have a great time, only looking at the implications of that good time when the bills start to roll in come January. I hope this will help you to enjoy the festive season, allow you to spend what is right and celebrate without any financial regrets.

Wishing you all a great Christmas and a prosperous New Year!

To book your personal financial review call me on 639118185 or drop me an email at chris.webb@spectrum-ifa.com

Arts Society de La Frontera event

By Charles Hutchinson
This article is published on: 27th November 2019

27.11.19

The Spectrum IFA Group again co-sponsored an excellent Arts Society de La Frontera lecture on 20th November at the San Roque Golf & Country Club on the Costa del Sol. We were represented by one of our local and long-serving Advisers, Charles Hutchinson, who attended along with our co-sponsors Prudential International in the form of George Forsythe.

The Arts Society is a leading global Arts charity which opens up the world of the arts through a network of local societies (such as in Spain) and national events throughout the world.

With inspiring monthly lectures given by some of the UK’s top experts, together with days of special interest, educational visits and cultural holidays, the Arts Society is a great way to learn, have fun and make new and lasting friendships.

At this event, over 120 attendees were entertained by a talk on Stolen Masterpieces: The Most Sensational Art Thefts in History by Shauna Isaacs who is one of the UK’s top experts in this field. She gave an excellent lecture revealing to us the history and reasons behind great art thefts. She is also a particular expert in the Nazi thefts of Art prior to and during the Second World War which she covered in a later Arts Society lecture that same day.

The talk was followed by a drinks reception which included free raffle for prizes including a CH supplied book on Stolen Masterpieces, Christmas crackers and mince pies. Prudential International donated a bottle of 12 year old whisky.

All in all, a great turnout and a very successful event at a wonderful venue, although we were in temporary accommodation as the main clubhouse is under renovation. The Spectrum IFA Group was very proud to be involved with such a fantastic organization during its current global expansion and we hope to have the opportunity to do so again.

Financial Planning Impact of the Spanish Election

By Barry Davys
This article is published on: 13th November 2019

13.11.19

The 10th November (10 N) General Election has, like in many other countries in Europe, resulted in no party gaining a majority of seats in parliament. The result is unsurprising, but what does it mean for our financial planning as individuals who are living in Barcelona and the Costa Brava?

With elections come many headlines, often contradictory. More and more we need to look beyond the headlines to find real data that helps with our planning. This is an example of why we need to look beyond the headline. The headline is ‘Ibex (Spanish Stock Market) rises 9.45% year to date’. Beyond the headline we find that profits of the companies that make up the IBEX index have fallen 20% to end of September 2019. How does this contradiction happen? The Ibex has no top weighting, unlike other indices, so can be highly affected by one company or a sector. The largest company on the IBEX 35 is Inditex (Zara etc) at 14% of the index. The banking sector represents 21% of the IBEX. This can lead to a distorted indication of the performance of a broader selection of Spanish companies. I have used the example of the IBEX because we live in Spain but it is similar for most indices around the World.

Below, I summarise points of the Spanish election that will impact our planning:

There is no sign that plans for post Brexit will be changed because of the election. This includes, for example, not changing the double taxation agreement between Spain and the UK.

It is unlikely that the change to a standardised method of Inheritance tax across Spain, as required by the EU, will be implemented as there is no majority government. Existing inheritance tax laws in Spain will remain the same.

The 10 N election was triggered because of the voting down of the budget proposed by the last government. The new government could well face a similar struggle to pass a budget. This means no changes to the tax rules and spending plans.

Still, borrowing by Spain will increase each year and this is similar across many European countries. Despite this, European government bonds have a very high price, many giving negative interest. Should you include these in your portfolio at this price?

The high prices in the stock market index and government bonds mean that headlines appear that suggest investing in commercial property as an alternative (there are lots of commercial property funds available). These headlines can include property growth rates from the last 10 years where property has enjoyed falling and very low interest rates. However, economic growth is slowing across the World and technology is changing our work, how we shop and play. Slowing economic growth and technological change mean that commercial property is not likely to do so well. A very careful approach to which property a fund manager buys will be especially important over the next 10 years. Without a majority government, we are unlikely to see Spain buck the World trend for lower economic growth.

We can take the following actions because of the elections:

Tax in Spain. We know the taxes and how to plan in a tax efficient manner because we have not had revisions since the last budget. Make your investments tax efficient.

Not all commercial property will do badly. Warehouses and logistically important points will do better than factories, for example. Warehouses are part of the Internet delivery system, which is becoming an increasingly large part of the shopping process for both companies and individuals. If we like commercial property we do not have to invest just in Spain. It is possible to invest in most of the developed markets.

When Barcelona city indicates that it will use driverless cars in the centre of the city, investment funds will buy car parks. It is estimated that the use of driverless cars will reduce the need for car parking in a city by as much as 70%. This could be a good opportunity as these car parks will be turned into other property types such as 3D printing manufacturing points, drone landing spots for internet deliveries and more. Admittedly, we may need to wait awhile before this happens.

Do not despair with shares. The major indices are used for headlines to give an indication of the relative price position of the market. Yet these indices are based on only a few companies e.g.

Spain Ibex – 35

France Cac – 40

Germany Dax – 30

UK FTSE – 100

There are many other companies to invest in these countries. We can also use funds which invest in companies doing business in and with India or China, for example.

There are some excellent opportunities in markets but it requires very careful and technical analysis to know which companies. Get help! See a previous article “5 mistakes the rich never make” which explains how the rich get help with their planning. I put this into practice in my own planning by using fund and investment managers to do the day-to-day management of my investments.

Good luck with your planning. If you would like to discuss help please feel welcome to contact me, especially if you own a business or are approaching retirement.

About the Author
Barry Davys is a partner with The Spectrum IFA Group. He lives in Barcelona and provides financial planning specifically for international people who live in Catalonia using his knowledge of Catalan, Spanish and UK tax. The advice is given in English. Business owners and people approaching retirement find his guidance particularly useful.

UK Pension transfer – most common questions asked

By Chris Burke
This article is published on: 8th November 2019

Without even mentioning the ‘Brexit’ word, if you have a private or company pension scheme in the UK but reside outside, it’s a good idea to understand what your options are in managing and having access to them. There are a handful of subjects I am regularly asked about regarding this:

UK pension currency
If you transfer your pension outside of the UK, it does NOT have to remain in sterling; all major currencies are usually available. It can also be changed at most times and be held in different currencies. Of course, at the moment this is an even more important thought process for your retirement savings.

Access to pensions
From age 55 you can have access to as much of your UK pension as you like, although bear in mind that in Spain pension money will be subject to personal income tax, after any allowances. Therefore, you might want to arrange this so as to not incur higher taxes (there are several ways to do this).

Pensions from a previous employer
These pensions are known as dormant or frozen, and at the very minimum you should know what you have, where they are and how they work. We help clients track these down, explain how they work, what your options are and start planning to make them either more ‘healthy’ or easier to access. Some pensions may have high charges, or the pension scheme could be financially in trouble. Having all this knowledge as well as the options available will help you make an informed decision.

Can I transfer any pensions I have myself?
In short, if you are abroad, no, since the process is complex and not easy to understand if you are not in the financial world. Also, HMRC won’t allow it unless you have received advice. We have clients with different levels of experience in finance and pensions, and we work alongside them all closely, giving them the knowledge to make their decisions and managing the process for them.

If they are UK pensions and you want to keep them in the UK, then yes, you can usually do this yourself depending on the value involved.

You cannot transfer a pension to another person, although there are ways you can pass it on effectively.

Pensions transfer charges
When overseas pension transfers were started many years ago, the costs were a lot higher than running a UK pension scheme, although the benefits were greater. Now, with increased competition from providers, the charges for moving and maintaining an overseas pension are a lot lower. However, this does depend on who you perform the transfer with and what advice you are given. I still come across clients where the charges are so high it is almost impossible for the pension to grow. There are ways of helping these people, but usually by then they have lost out on many years of growth, which is really frustrating as it didn’t need to be that way. It’s so important you work with a Financial Advisor who is working for you, at your pace and advising in your best interests, not theirs.

Selecting a Financial Advisor to work with when investigating moving a UK pension
There are several points/questions you should check when deciding whom to seek advice from. These are:

1) Recommendations, you cannot beat them. Does anyone you know work with a Financial Advisor and they are happy with them?
2) Does the Financial Advisor have the necessary qualifications to give you advice?
3) How are they remunerated? Ask them how much and when.
4) Do they have any long-standing clients you can speak to? If they do and you manage to speak to them, ask them specific questions so you know they are both genuine and how it worked for them.
5) Look into their eyes… meet them several times, get a feeling for them as a person, their morals and actions.
6) Research them on the internet, or ask around and see what’s said about them.

I do know clients who have done most of this and still not had a great experience. The only additional advice I can give is to look at the pensions and companies they are recommending. If you haven’t heard of them before or you don’t get the ‘spider sense’ that they purely have your best interests at heart, then look elsewhere. Remember, they are going to be looking after your retirement. For years I have helped people evaluate their pensions, and as well as looking to help new clients, the main reason I write these articles is to help people avoid potentially working with someone that doesn’t have their best interests at heart.