GIVEWATTS and The Spectrum IFA Group
By Spectrum IFA
This article is published on: 17th December 2014
Please see below an open letter sent to The Spectrum IFA Group
by GIVEWATTS
Dearest Christine and Chris,
I hope you are well indeed! You have a big place in my heart, part of my secure base. Thank you for everything you have done and for always being there!
I can’t thank you and Spectrum enough for the support to GIVEWATTS over the years! It has meant a great deal, both in terms of funding (see attached project update), but also morally. You joined us at an early stage, taking a chance on something you believed in. I am happy to say that it is really working now, and it also has a great deal of impact.
It has been a very good year for GIVEWATTS. Our partnership with Spectrum has been a key component in our being able to scale up during the year. We have grown into 649 schools across Kenya, and we are starting in Tanzania early next year, and DRC a month after that. More reasons for you to come and visit again!
The school calendar has all the kids in Christmas recess now, and we are waiting for the final grades for the last term in January 2015. In the current report the improvement is at 7%, and this reflects the changes between a county wide diagnostics test and the national exam. After that we will update those numbers, as well as the changes in school ranking. You should expect a change of around 20%, which is the average change across our Kenyan schools between two national exams.
You will be pleased to see that 107 lamps have been paid off. The balance of lamps have been signed up for and are being paid for now. The total savings for the households is almost CHF 40K, and using the most conservative measures available (100 kg of Co2 per replaced kerosene lamp) so far the project has offset a total of about 17 tonnes of Co2. This calculation is based on number of total days lamps have been replaced. For comparison, for the total 265 lamps in the project, the saved emissions will be 26,5 tonnes per year. As the number of lamps increase, this number will go up.
I also include two impact videos. Short and concise for busy Spectrumers. We are also changing our project page on the website again, to make it more interactive. The local web developer we are using says that this will be done early next week. As soon as we have it, I will send you a note.
I hope to make it to Lausanne in the first quarter of 2015, and I will so very much take you out for a meal to celebrate our joint success! And just to have a curry with some great people!
A very Happy New Year!!
Jesper Hörnberg
To download the full report please click here
Pension workshops in 2015 – Deux-Sèvres
By Amanda Johnson
This article is published on: 14th December 2014
In November 2014, I was invited by Micala Wilkins of the “Ladies in Business in France” Facebook group to present a pension workshop to those within the group who have moved to France, are working here and wanted to know more about planning for their retirements. Choosing a small venue so that I could focus on the individuals present, we covered the following areas:
- What pension am I likely to receive from the UK when I retire?
- How is the French state pension calculated?
- What income will I require when I retire?
- How can I make up any difference between what I would like to receive and what I can expect to receive?
The delegates all found the information very useful and informative, as you can see from these event testimonials:
“It was a really useful meeting, thanks for organising it – Amanda Johnson gave us some interesting information and plenty to think about:)”
“It was a great session and certainly gave lots of food for thought!”
“An informative session on how, as expats, we can find out what our UK pension entitlement is, how we can maximise our full UK pensions and the steps we can take to get as much of a French pension as possible”
Subject to sufficient interest, I will be happy to conduct more workshops covering pensions, or any other areas of financial planning that readers of The Deux–Sèvres Monthly magazine or any others may want. If you email me your name, postcode and area of interest, I will endeavour to arrange local events throughout 2015.
Whether you want to register for our newsletter, attend one of our road shows or speak to me directly, please call or email me on the contacts below and I will be glad to help you. We do not charge for reviews, reports or recommendations we provide.
Looking forward to 2015
By Spectrum IFA
This article is published on: 9th December 2014
The end of the year is always a good time for reflection and this year we have had much to think about for our clients. However, as well as managing current financial risks for our clients, we are also forward looking. So I thought it would be a good time to do a quick review of some of the things that are on the horizon for 2015.
The UK Pensions Reform is big and we now have a reasonable amount of certainty of the changes taking place in April and it is unlikely that there will be any more changes of substance between now and then. The reform brings more flexibility, which is good, but the reality is that for many, the taxation outcome will be a deterrent against fully cashing in pension pots. This is likely to be even more so in France, where it is not just the personal tax and possible social contributions that are an issue, but also whatever you have left of the pot will then be taken into account in valuing your assets for wealth tax, as well as being potentially liable for French inheritance taxes.
The EU Succession Rules will come into effect in August. While the EU thinking behind this is good, i.e. to come up with a common EU-wide system to deal with cross-border succession, the practical effects will still have issues. The biggest issue for French residents is, of course, French inheritance taxes. Therefore, it may not necessarily be the case that the already tried and tested French ways of protecting the survivor and keeping the potential inheritance taxes low for your beneficiaries should be given up in favour of selecting the inheritance rules of your country of nationality. More information on the ‘French way’ can be found in my article at https://spectrum-ifa.com/inheritance-planning-in-france/ and on the EU Succession Regulations at https://spectrum-ifa.com/eu-succession-regulations-the-perfect-solution/
There is the UK General Election in May and who knows whether or not that will actually be followed at some point by a referendum on the UK’s membership of the EU. Nor do we know what the outcome of such a referendum would be and so there is really no point in speculating, at this stage.
For UK non-residents, we are expecting the introduction of UK capital gains tax on gains arising from UK property sales from April, subject to there not being any changes in the next budget. We had also expected that non-residents would lose their UK personal allowance entitlement for income arising in the UK, but we now know that this will not happen next year. The Autumn Statement confirmed that it is a complicated issue and if there are to be any changes in the future, these will not take place before 2017. Of course, there could be a change in government and so it might be back on the agenda sooner!
We will also have the usual round of French tax changes, although this year the expected changes are much less extensive than in previous years. The French budget is still winding its way through the parliamentary process and I will provide an update on this next month.
Turning to investment markets, my personal opinion is that the main factor that will have an impact in 2015 is central bank monetary policy. Whether this results in tighter or looser policy from one country to another, remains to be seen. What is clear is that the prospect of deflation in the Eurozone remains a real threat and not only needs to be stopped, but also needs to be turned around with the aim of eventually reaching the target of being at or just below 2%. Other central banks around the world have a similar target and in areas where recovery is clearly underway, the rate of price inflation and wage inflation also needs to increase before we are likely to see the start or interest rate movements in the right direction.
Last but not least, with effect from 1st January 2015, under the terms of the EU Directive on administrative cooperation in the field of direct taxation, there will be automatic exchange of information between the tax authorities of Member States for five categories of income and capital. These include income from employment, director’s fees, life insurance products, pensions and ownership of and income from immoveable property. The Directive also provides for a possible extension of this list to dividends, capital gains and royalties.
The above outline is provided for information purposes only and does not constitute advice or a recommendation from The Spectrum IFA Group to take any particular action on the subject of investment of financial assets or on the mitigation of taxes.
If you are affected by any of the above and would like to have a confidential discussion about your situation or any other aspect of financial planning, please contact me using the details or form below.
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.
Cogs4Cancer fundraising hits €285,000
By Spectrum IFA
This article is published on: 28th November 2014
Back in October there were 16 fearless riders that set off from Ancona in Italy and after cycling over 850km in six days arrived fresh faced in Antibes, France.
This gargantuan ride was completed with one thing in mind – to raise as much money as possible for cancer research. All funds raised, that means 100% are in aid of Cancer Research UK, Clinique Tzanck Cancer Care unit in Mougins, France and the Children’s Cancer unit at the Lenval Hospital in Nice.
The Spectrum IFA Group were very proud to be sponsoring Lee Mutch on this epic ride and were delighted to be part of the other fund raising events held in and around Antibes.
The amount raised at this time has hit an unbelievable €285,560.06.
Should I stay or should I go?
By Spectrum IFA
This article is published on: 25th November 2014
Quite frankly I’ve been struggling to think of what to write about this week, but then it suddenly struck me that there has been a recurring theme in a number of my client meetings recently. That theme put simply is, ‘Where will I end my days; in France, or in England?’ This isn’t a popular topic of conversation amongst vibrant, exuberant, middle aged expatriates, but we’re not the only people here. We are in the company of many seasoned expats who’ve been here longer than we have; seen it all; done it before we did, and are feeling a bit tired. Many of them are ‘going home’.
We should pay a lot of attention to this group, because we are going to inherit their shoes. We need to learn from their experiences, and take the opportunity to plan for the time when we will experience what they are going through.
Five years ago, when writing on a similar theme, I think I proffered the theory of the three ‘D’s as the principal reason to return to the UK: death, divorce and debt. I still think that they are valid causes, but I now think that there are many subtle variations to be taken into account, and the biggest addition to the equation is age. Age changes your perceptions; often for the better, but age often also brings insecurity and loneliness. Add to that illness, and maybe bereavement, and you have a powerful reason to examine your reasons to continue to live hundreds of miles away from a family that (hopefully) continually worries about you. In short, no matter how much we pooh-pooh the idea now, the chances are that we may eventually end up being cared for in our final years in the UK rather than in France.
OK, that’s enough tugging at the heartstrings. Why is a financial adviser (yours truly) concerned about where you live, and where you may live in future? The answer is currency, specifically Sterling and Euro. In a previous existence, I was responsible for giving advice to corporate and personal clients of a major High St bank regarding exposure to foreign exchange risk. The basic advice was simple – identify and eliminate F/X risk wherever you can. F/X risk is for foreign exchange dealers; it is gambling. Don’t do it unless you know what you’re doing, and even if you do, prepare to lose money.
On a basic level, eliminating exchange rate risk is easy. Faced with a couple in their 50’s relocating to France with a healthy investment pot behind them and good pensions to support them in the future, I will always ask ‘Where do you intend to spend the rest of your days?’ The answer is usually an enthusiastic ‘France, of course. We have no intention of going back to the UK. In fact wild horses wouldn’t drag us back.’ I know this for a fact – I’ve said it myself.
The foreign exchange solution is simple. Eliminate your risk. Convert your investment funds to Euro (invest in a Euro assurance vie). Convert your pension funds to Euro (QROPS your pension and invest in Euro). Job done! Client happy, for now! But what happens 25 years later, when god knows what economic and political shenanigans have transpired, and the exchange rate is now three Euro to the pound and the surviving spouse wants to ‘go home’?
As it happens, I will no longer be his or her financial adviser. The chances are that I will have popped my clogs years ago, but If not, I will most likely be supping half a pint of mild in a warm corner of a pub somewhere in the cheapest part of the UK to live in. (In fact that is poetic licence, as I know full well that I’d probably be being spoiled rotten in my granddad flat in one of my sons’ houses). To draw this melancholy tale to a close, I’d just like to round up by saying that things are rarely as simple and straightforward as they seem. My job is not always to take what you tell me at face value. I know people who’ve been here longer than you. My advice may well be ‘hedge your bets, spread your risk’. I will give you the best possible investment tools for your money and pensions, but I might just surprise you with my recommendation as to what currency those funds should be invested in.
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.
Benefits
- 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.
What New Year’s Resolution can I make for 2015?
By Amanda Johnson
This article is published on: 18th November 2014
As 2014 draws to an end and we look forward to spending the festive period with family and friends, there is one New Year’s resolution that you can make which will benefit both you and your family and that is to make sure that you review your finances in 2015.
2014 has seen the UK Government make changes to pensions, the French Government levy Social Charges on areas not previously charged and a joint agreement on Wills which is due to come into effect during 2015. On top of this, there is constant media concentration on whether the UK is better off in or out of the EU. Bearing all of this in mind, it is worth taking advantage of a free financial review to ensure your savings, investments & pensions are working for you in the most tax-efficient manner and that they match your goals and aspirations for the future.
A free financial review will include the following areas:
- Investments – to ensure they are as tax efficient as possible
- Inheritance tax – to minimise the amount of inheritance tax imposed and increase your say in where you money goes after you die.
- Pension planning – putting you in better control of planning for your future
Whether it has been a while since you last looked at your finances or you are unaware of how changes both in the UK & France could affect you, a decision to take a free financial review could be one of the best New Year’s resolutions you can make.
Whether you want to register for our newsletter, attend one of our road shows or speak to me directly, please call or email me on the contacts below and I will be glad to help you. We do not charge for reviews, reports or any recommendations we provide.
Have a Merry Christmas and a very Happy New Year.
Spectrum sponsor the Barcelona English Radio Party – 20th November
By Spectrum IFA
This article is published on: 14th November 2014
The Spectrum IFA Group are delighted to be sponsoring the English Radio Party on 20th November, 2014.
Baribau CARRER D’ ARIBAU 131, 08036 Barcelona View Map
Date & Time:Nov 20, 2014 20:00 – 03:00
€7 advanced booking
€10 on the door
DJ Simon Jordan
Beckham Bounces Back in Spain
By Barry Davys
This article is published on: 12th November 2014
When David Beckham (Becks) came to Spain to play for Real Madrid in 2003, a special Spanish tax system was set up for him so he did not have to pay tax on his worldwide image rights. This system has been extended to people moving to Spain, although in an ironic twist, professional footballers will be excluded from the scheme from 1st January 2015.
Tax rates in Spain are falling with plans to reduce the top rate of tax in Spain from 51% (56% in Catalunya) to 47%. The top rate is however still very high. However, in a bid to attract high earners to Spain the law is being improved.
Why use the Beckham Law?
Well, the three benefits are as follows:
- Flat rate income tax of 24% on Spanish earnings in Spain. If your income is derived from Spanish sources then the maximum rate you would pay will be 24% instead of normal rates up to 600,000€ pa. Above 600,000€ the tax rate is 45%. Here are some specific examples of the saving based on the 2015 Spanish Tax rates.
| Annual Salary € |
Beckham Tax Rule Saving € |
| 100,000 | 13,645 pa |
| 150,000 | 26,495 pa |
| 200,000 | 36,645 pa |
| 250,000 | 48,145 pa |
| 300,000 | 59,645 pa |
| 400,000 | 82,645 pa |
| 500,000 | 105,645 pa |
| 600,000 | 128,645 pa |
You are allowed to stay on the Becks rule for a maximum of 5 years. The total saving is therefore the figure above x 5. Your individual circumstances will dictate exactly how much saving you will acheive but the figures above are a good guide.
- No capital gains tax to pay on any gains made outside Spain. This includes the sale of property, shares, etc. This point is especially important if you have a property to sell or a business to sell outside of Spain. As an example an owner of a technology company that sells the business for £20 Million whilst on the Beckham scheme will not pay Capital Gains tax in Spain nor in the UK if he/she does not return to the UK for 5 years.
The potential capital gains tax saving in this example could be £8 Million.
- Only income obtained in Spain will be subject to Spanish taxation. As an example, bank interest earned from bank accounts outside Spain are not subject to Spanish Tax whilst you are on this method of taxation. Rental income from property outside of Spain is another example.
Beckham tax scheme rules
If you meet the following conditions you can reduce your tax by requesting to be taxed on a non resident basis under the Beckham rule:
- If you have not been resident in Spain in the last 10 years.
- If you apply for the “New” Beckham law within 6 months of arriving.
- You must be resident in Spain. The main condition being living in Spain for 183 days a year.
- The requirement for work to be primarily conducted in Spain has been reformed.
- The requirement to work solely for a Spanish company has been reformed.
- The reduced rate of taxation will apply for a maximum period of 5 years.
If you meet these criterias, you should consider using this method of taxation.
References:
SpainRoyal Decree 687/2005
Baker and McKenzie SLP, Acccountants, Spain
This information is intended as a guide only. A suitable qualified tax lawyer should always be used to calculate a specific liability. Legislation can be subject to change in the future.