Viewing posts categorised under: Spain
The Spectrum IFA Group & the Decorative & Fine Arts Society
By Charles Hutchinson
This article is published on: 2nd April 2015
02.04.15
The Spectrum IFA Group and Charles Hutchinson in the Costa del Sol were proud to sponsor a recent event for the DFAS (Decorative & Fine Arts Society), which is the local branch of NADFAS (National Association of Decorative & Fine Arts Society).
The lecture in March was held at the legendary San Roque Golf & Country Club where the centre piece is the magnificent Domecq mansion. Attended by over 100 people on the 18th March the informative lecture was entitled “Romancing the Stone” and was given by Joanna Hardy on the subject of Jewellery and Gem Stones. She is a world famous authority on the subject, having been with De Beers, Sotheby’s, Phillips, regularly writes for the Daily Telegraph and features regularly on the Antiques Roadshow.
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Le Tour de Finance 2015
By Spectrum IFA
This article is published on: 26th March 2015
After a very successful string of events during 2014, Le Tour de Finance is back and has started its spring series.
The events in 2014 were a huge success, with large numbers attending all the events with fact filled sessions followed by an opportunity for an informal questions and answers session over complimentary refreshments and a buffet. The initial events in 2015 have been even better! The first events have been held in truly spectacular surroundings in Les caves, de la Maison Ackerman, near Saumur, the Château Colbert in Maulevrier, Pays de la Loire.and at the Chateau de Javarzay, Chef Boutonne, Deux Sevres
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The relaxed and open forums are a chance to expand your knowledge of personal finance as an expat resident in France. The panel of speakers are experts in their respective fields and are on-hand to answer questions you may have about protecting and strengthening your personal financial situation while a resident in France.
The spring events are continuing throughout April in Spain and Italy:
Spain:
- Barcelona – 14th April
- Sitges – 15th April
- Denia – 16th April
Italy:
- Castiglione del Lago – 20th April
- San Gineso – 21st April
The Spectrum IFA Group is an European leader in professional personal financial advice and will be covering subjects such as; QROPS, pensions, tax advice, investments and wealth management, healthcare, and mortgages.
Le Tour de Finance is an excellent and relaxed forum in which you can get those important questions answered, plus mingle in a pleasant and relaxed atmosphere with other expat residents whilst enjoying a buffet lunch.
All of Le Tour de Finance events are very popular so we therefore recommend you to book well in advance using the form below:
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Can You Avoid Spanish Inheritance Tax?
By John Hayward
This article is published on: 27th February 2015
Savings with UK banks and investment companies could form part of a Spanish Inheritance Tax (IHT) calculation.
If you have money in a Spanish bank, the Spanish tax authorities know about it. If you have money in a UK bank, they probably know about this too due to information passed over by the UK tax authorities. Of course, if you have over €50,000 in a UK bank account you will have reported this to Spain within your Modelo 720 form.
For a Spanish tax resident inheritor, Spanish IHT is due on worldwide assets. Therefore, a Spanish resident wife, inheriting from her husband, could pay tax based on their Spanish property and other Spanish assets PLUS tax on the overseas assets.
The English Will does NOT stop the Spanish tax authorities claiming Spanish IHT (Succession Tax) on overseas assets. The Will governs the distribution of the estate, not its taxation directly.
We can help mitigate, delay and even sometimes completely avoid Spanish IHT by placing money in a Spanish compliant insurance bond based outside Spain. Suitably arranged, the bond could save many thousands of euros in inheritance tax.
Financial Independence: What’s your number?
By Jonathan Goodman
This article is published on: 16th February 2015
16.02.15
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:
- 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?
- 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.
- 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.
Remember…
- 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?
Smart Ways to Make the Most of Your Finances
By Chris Burke
This article is published on: 10th February 2015
10.02.15
The year 2015 is picking up speed, and now is the perfect time to stop and re-evaluate our finances before we slip back into our old comfortable routines. A time to review the past year and determine those areas with potential for improvement, to make sure we are getting the most out of our investments and reaching all our financial goals.
Do you know where your money goes each month? Could you be making more if you invested elsewhere? Is your credit rating a true reflection of your financial situation, and are there things you could be doing to improve your standing?
Follow these smart ways to make the most of your finances and put you and your family on the right track for a wealthier future.
Study your Credit Report
Have you ever seen a copy of your credit report? Most people haven’t and it may surprise you to hear that they very often contain errors. Research online and get access to your report and make sure there aren’t any mistakes which could be having a negative impact on your rating. If you don’t, you could be at risk from undiscovered inaccuracies.
Study your Cash Flow
Set some time aside to study your cash flow. Go over all your statements from the past year and crunch those numbers to gain a true understanding of where your money goes each month. How much are you spending? Where is it all going? Where can you make cuts to your monthly outgoings?
Credit Cards & Banks
Check the Terms and Conditions of all your credit cards and compare terms, rates and fees with those of other cards. Are you getting the best deal or are you just renewing cards out of habit? Get rid of credit cards which don’t give anything back, and compare rewards and cash back with other offers. If your current bank is letting you down and not providing the service you need, change.
Understand Investments
Most of us don’t fully understand investments. Be the minority. Do your research and find out as much as you can about viable investment options. Use the Internet and its many free tools, and study the market to assess how to make the most of your finances.
Seek Professional Advice
Ultimately, the best advice is professional advice. The Spectrum IFA Group can assist you in reviewing your financial situation and advise you on smart ways to make the most of your finances. For more information or to contact one of our Financial Advisers please use the contact form below.
The Financial Implications of Moving Abroad
By Chris Burke
This article is published on: 30th January 2015
Moving abroad can be a stressful and confusing experience and starting from scratch in a new location can often be overwhelming.
If you have recently decided to up sticks and move to Barcelona, or if you’re a recent arrival in the sunny Catalan capital, then you will have many choices to make. Aside from the immediate practicalities of moving to a new country, such as choosing schools, buying or renting property, and setting up residency for you and your family, there are many other (often overlooked) factors to take into consideration:
Pensions:
Unlike the UK, most companies in Spain don’t provide a private pension scheme or private health insurance. However, as an Expat, you may have unique opportunities available to you. An adviser will be able to discuss each of the options enabling you to make a decision.
Banking:
Having the right banking arrangements is a key part of life overseas. It’s best to sort your finances out before you go, as local banks usually require a credit history and proof of address to set up an account – which you won’t have when you arrive.
Tax:
Dual-Country financial arrangements are complex and should not be taken lightly, as even the most innocent transaction can be costly if not well planned.
Savings and Investments:
There are many factors that go into determining the best country in which to locate your investments. Bear in mind that you may have access to, and potentially benefit from, onshore and offshore savings and investment assets.
ISAs:
If you currently have an ISA and are planning to move abroad, they are not tax efficient in Spain. You also need to be fiscally resident in the UK to pay into one.
Will & Testimony:
Your Will (and those of your family members) will need to be updated so that it is compliant in Spain
Financial Advice:
The complexities in managing currency risk, an investment portfolio, and dual-nation tax reporting are many. It is important for expats to have a trusted adviser who understands the financial nuances of living an international lifestyle.
Smoothing: Reduce Volatility and Increase Growth
By Jonathan Goodman
This article is published on: 15th January 2015
15.01.15
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
07.01.15
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.
Volatility:
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.
Leverage:
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.
Saving for Retirement in Spain
By Chris Burke
This article is published on: 28th December 2014
How do you save for retirement in Spain and what are the best options for expats?
These days there are quite a few choices on how to receive your pension as a British expat and, if you qualify for a UK state pension, you can claim it no matter where you live. The money can be paid into a UK bank or directly into an overseas account in the local currency. If you move to Spain before retirement and work there for a number of years, it may also be possible to receive a state pension from more than one country.
If you’ve qualified for a state pension from the UK, it will be paid (and taxed) in Spain but uprated every year in the same way as the UK. The personal tax allowance in Spain is €6,069 (£4,923) compared with £10,000 in the UK. The basic rate of tax is also higher, at around 24% compared to 20% in the UK. And in Spain there is no 25% tax free lump sum available when retiring, and any Isa’s you have in the UK will be liable for tax if you become resident in Spain.
A lot to consider…
Saving for Retirement: Tips
Plan Ahead: Pay off debts and take advantage of tax free personal allowances.
Do Your Homework: Before sitting down with an independent financial adviser, make sure you have a clear picture of your current finances and what you need to consider in order to achieve the lifestyle you want over the years ahead.
Consider Your Saving Options: The recent Budget announced radical changes to pension schemes – good news for savers. From April 2015, individuals may withdraw as much or as little from their pension fund in any year with 25 per cent being withdrawn free of tax.
Regularly Review Investment and Retirement Plans: Review your investment and retirement plans every six months to ensure any advice received is up to date and relevant.
Prudential: Flexible Savings for Retirement
The Prudential Flexible Retirement Plan gives access to a range of flexible retirement and investment solutions to suit your changing needs and priorities. Whether you are approaching retirement or some way off, the flexibility provides an easy transition from saving for retirement, through to approaching retirement and then taking an income.
Professional Advice for Expats
The earlier you get your financial planning in order, the better. Make a mistake with your pension, and you could end up paying for it for the rest of your life.
A pensions expert will be able to point you in the right direction. You will need to take Spanish rules into consideration, so taking advice from an adviser conversant with both UK and Spanish pension and tax rules is essential.
Finding a Financial Adviser in Barcelona
By Chris Burke
This article is published on: 27th December 2014
The number of British people moving abroad is rising, with about one in 10 British people now living overseas.
Despite its obvious economic difficulties, Spain continues to be one of the most popular destinations for British expatriates, as the laid-back lifestyle and improved transport links with the UK gives it an allure that is hard to resist.
However, setting up residence in a Spanish city, such as Barcelona, involves a great deal of upheaval, both on a personal and practical level, and it’s a sad reality that expats can be particularly vulnerable to poor financial advice.
How to Choose a Financial Adviser
In practical terms, one of the most important things to get right as an expat is your finances, and having the right banking arrangements is a fundamental part of life overseas. Banking services should ideally meet at least two main criteria: flexibility (money should be easy to access and transfer between countries); and financial security (in a reputable bank that complies with international financial regulations and has a solid capital base).
But what other factors should you take into consideration when searching for a Financial Adviser in Barcelona?
- Are they regulated? Do your research, visit websites, and confirm registration with the IFA before choosing an adviser.
- Qualifications: Every nation has different rules relating to how qualified a financial adviser needs to be to gain authorisation, but the UK is a world leader in terms of required qualifications. So if you’re speaking to a British adviser abroad, you can gauge their industry education based on the British qualifications they have.
- Experience: You can ask your adviser how long they’ve been qualified and giving advice, and you can research the brokerage to see how long they’ve been in business.
- Are they independent? Ensure that your adviser is independent rather than tied to one financial institution, so that they are able to advise you on suitable products from the entire financial market place.
- Testimonials: If your IFA is good at their job, they are highly likely to have a list of satisfied clients, from whom you can request a testimonial.
The Spectrum IFA Group
At The Spectrum IFA Group, we provide financial advice to expats on all aspects of living, moving and working in Spain. From calculating the cost of living to choosing a good school for your children, our guides to money management and family finances will help you prepare for the challenges of living and working abroad – so you can make the most of your expat experience.
We provide Insurance Intermediation advice and assist clients in their choice of Investment Management Institution. Mutual respect is earned by working together, looking after your best interests and by adding value to your financial planning through qualifications, experience and enthusiasm.
