The Spectrum IFA Group opens an office in Limoux
By Derek Winsland
This article is published on: 27th June 2016
“Out with the old and in with the new”
No this is not a reference to Rob Hesketh departing the scene (which he isn’t, he remains a very important part of the Spectrum operation here in Limoux). Rather it relates to my decision, after 20 plus years at the coal-face of UK Financial Services, to sell up and move lock, stock and barrel to this beautiful part of France.
So far the move has gone well, apart from one or two hiccups that should be expected. But I’ve been grateful for the help and support I have been given by colleagues and the wider ex-pat community who have been generous in sharing their experiences of moving here and the pitfalls to avoid. It has also enabled my fiancée and I to bring forward our wedding plans and so we return to the UK to the beautiful City of Chester to tie the knot at the end of this month.
As both Sue and I have been married before, the more acerbic reader may observe that this is another case of “out with the old, in with the new”!
“Out with the old, in with the new” also refers to Spectrum’s decision to open an office here in Limoux. This is the first office Spectrum has formally established in rural France (up until now Rob and Daphne and all the other Spectrum IFA’s in the area have worked from their homes or other informal locations), so for the company to select this area for its first venture of this kind is testimony to the brilliant work both Rob and Daphne have done over many years. Both Rob and Daphne have now decided they’d like to ease down a bit, and this explains my introduction to this area.
It’s worth noting that The Spectrum IFA Group already have offices in major cities like Paris, Barcelona, Amsterdam, Luxembourg and Rome and now Limoux joins that illustrious list!
We’ve taken on an office manager, Jaime Donkin, who will be responsible for the day-to-day operation of the office – the office is open Tuesday-Thursday 09.30-12.00 and 14.00-16.00 and Friday 09.30-16.00.
Limoux Friday Clinic
Another change is the introduction of a new service we are offering of a Friday Clinic. As you will no doubt know, Friday is market day here in Limoux, so I will be here to answer any questions you may have; you don’t need to make an appointment, just drop-in on any Friday morning and I’ll endeavour to assist. If you’re making a special journey, you can also ring in to the office and we’ll set aside a half hour appointment if you prefer, the office number is 04 68 31 14 10.
The choice of office location couldn’t be more appropriate either, situated as it is between the bank and the tax office! We like to think we offer an essential buffer between your money flowing out of your bank account and in to the taxman’s – to find out how, pay us a visit on any Friday morning or alternatively ring for an appointment, which could either be in our office or at your home.
BREXIT & The Spectrum IFA Group
By Spectrum IFA
This article is published on: 24th June 2016
All of the Spectrum team and the majority of our clients are extremely disappointed with the result of yesterday’s UK BREXIT referendum.
What will the leave vote mean to our clients and potential clients?
In terms of dealing with Spectrum, we are an EU licensed IFA firm, not a UK or Gibraltarian firm trading under EU passporting arrangements.
Most of the products we recommend are individually EU compliant based in Dublin, so no change there.
Existing EU resident expatriates and new UK expatriates will now need our advice and services more than ever before. Once the UK actually leaves the EU there will be issues to solve in relation to Healthcare and Pensions, for example.
Many of our clients have opted to transfer their UK pensions to an EU jurisdiction (QROPS), the main reason being that they are fed up with frequent changes to UK rules. We now expect even more UK pension rule changes. We expect more people will be looking to transfer their pensions to achieve a degree of certainty in the future now that the UK are leaving the EU.
So for Spectrum, our clients and potential clients, we see it as “Business as usual”.
Our belief is “With Care, You Prosper” and we remain available to help where we can.
Michael Lodhi CEO
The Spectrum IFA Group
Planning for Certainty in an Uncertain World
By Spectrum IFA
This article is published on: 17th June 2016
At the time of writing this article, the UK Referendum on membership of the EU is only a week away. As the polls swing from one side to the other, uncertainty increases, in part driven by sensationalist media reporting. It seems that even football hooliganism might have the potential to affect the outcome of the Referendum, if England is disqualified from Euro 2016.
If the vote is to remain, in theory, life should go on as we know it. In practice, the schism created within the government over the EU question could make things unworkable. The next UK general election is scheduled for May 2020, but could we see this brought forward?
If the vote is to leave, no-one knows at this stage what this will mean in practice, as it will depend on any exit terms negotiated. If nothing is agreed within two years, then the UK will just exit the EU without any special terms at all, unless all the remaining countries agree to extend the deadline. However, will any of the Member States be favourable to granting special ‘club membership terms’ to any country that leaves the club?
For those of us living outside of the UK, how do we plan for our financial future, amidst all this uncertainty? Well the saying, “when in Rome, do as the Romans do”, comes to mind here. As difficult that thought may seem to be now, financial planning is for the long-term and part of that planning is managing through ‘events’ that occur – including the big political and economic ones.
So whether the UK is in or out of the EU, what really should be considered in planning for a secure financial future is what works best for us according to our country of residence. We already have many clients who are non-EU nationals living happily in France (and in the other countries in which we are based). Whilst there may be some different home tax issues to consider, the financial planning that we carry out for these clients is no different to what we do for our British clients.
Last month, I wrote about tax-efficient savings and investments in France and if you did not see this, the article can be found at https://spectrum-ifa.com/tax-efficient-savings-investments-france/. All the savings and investment products mentioned are widely used by people of all nationalities – being an EU national or not, makes no difference.
A very important part of planning for a secure financial future is to have an appropriate investment strategy for financial assets. Your attitude to investment risk and objectives for your capital are major factors to be taken into account when recommendations for any investments are made. For expatriates, it is also important to consider currency and mobility needs. Investment recommendations should only be made following an in-depth review of your personal situation. Everyone’s situation is different and there is no ‘one plan fits all’ facility.
In practice, financial advice is needed more than ever in uncertain times. Doing nothing can often be an expensive mistake. Hence, if you would like to have a confidential discussion with one of our financial advisers, you can contact us by e-mail at limoux@spectrum-ifa.com or by telephone on 04 68 31 14 10. Alternatively, drop-by to our Friday morning clinic at our office at 2 Place du Général Leclerc, 11300 Limoux, for an initial discussion.
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 the investment of financial assets or on the mitigation of taxes.
The Spectrum IFA Group advisers do not charge any fees directly to clients for their time or for advice given, as can be seen from our Client Charter here.
Known Unknowns
By Derek Winsland
This article is published on: 16th June 2016
Individual investors may face many “known unknowns”—that is to say, things that they know they don’t know. The UK’s referendum on EU membership is one of them, confronting people with a large degree of uncertainty. But as we’re witnessing, it’s not just the investor that’s afflicted by this Known Unknown condition – the markets are really uncomfortable as evidenced by the fall in the value of the pound.
We have though been here before; perhaps not having to make decisions that could affect our financial stability for years to come, but as the chart below shows, major global events that have impacted on our lives to a greater or lesser effect. Through all of them, the markets have shown a remarkable resilience over the longer term and that is one of the most important lessons the individual investor can learn.
You see, it’s not necessary to “make the right call” on the referendum or its consequences to be a successful investor. Our approach is to trust the market to price securities fairly; to take account of broad expectations of future returns.
In arguing for the status quo, the “remain” campaign is able to point out familiar characteristics of membership.
The “out” campaign, however, is based on intangibles that can only be resolved after the result of the referendum is known. It is impossible for any individual to predict the implications of these unknowns with certainty.
But this is no cause for concern. While the referendum is imminent and its implications are potentially vast and unpredictable, it is not necessary for individual investors to make any judgement calls on the outcome. We have faced many uncertainties in the past—general elections, market crises, recessions, wars—and throughout all of them, the market has done its job of aggregating participants’ views about expected returns and priced assets accordingly.
And while these events have caused uncertainty, volatility and short-term losses and gains, none of them has altered the expectation that stocks provide a good long-term return in real terms.
We have a global view of investing, and we know that the market is very good at processing information that is relevant to future returns. Because of this view, we don’t attempt to second-guess the market. We manage well-diversified portfolios that do not rely on the outcome of individual events or decisions to target the expected long-term return.
These events are not offered to explain market returns. Instead, they serve as a reminder that investors should view daily events from a long-term perspective and avoid making investment decisions based solely on the news. Past performance is no guarantee of future results. MSCI data © MSCI 2016, all rights reserved.
Research has demonstrated time and again that the best returns are achieved through ‘Time in the Market’ and not by trying to ‘Time the Market’; in other words, stay invested rather than guess the best time to invest and disinvest.
If you would like more information on our investment philosophy, please ring for an appointment or take advantage of our Friday Morning Drop-in Clinic here at our office in Limoux. And don’t forget, there is no charge for these meetings.
Le Tour de Finance spring events
By Spectrum IFA
This article is published on: 16th June 2016
The final three Le Tour de Finance events of the spring season finished in Pezenas, Nimes and Frejus. The venues for these past three events were spectacular bringing even more enjoyment to the days events for the attendees. The weather was kind and the events were a huge success.
So far, Le Tour de Finance in 2016 is proving to be the most popular series of events ever. The seminars offer English speaking expats a chance to meet various experts from fields including; specialist expat independent financial advice, wealth management, currency exchange, QROPS/pensions and expat tax advice. The experts represent a range of international institutions giving attendees unprecedented access to ask those nagging questions about living as an expat in France.
Representatives from a wide range of international companies such as Tilney BestInvest, SEB Life, Standard Bank, Rathbone Brothers plc, Prudential International, Momentum Pensions and AXA attend the events for a small presentation but more importantly, the events allow attendees to ask direct questions to these experts. This unprecedented access to the experts is what really sets Le Tour de Finance events apart.
The events will re-commence after the summer break in September and October. Keep an eye open for events in France, Spain and Italy or contact us here to receive updated information on events in your region.
The objective of Le Tour de Finance is to provide expatriates with useful information relating to their financial lives. We try and cover frequently asked questions that we receive from our clients, however, it would be helpful for us to know what your particular areas of interest might be.
If you have any specific question please contact us here – Le Tour de Finance Questions
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Tax cuts in Italy…?
By Gareth Horsfall
This article is published on: 14th June 2016
Before you have to steady yourself at the mere thought of tax cuts in Italy, I have to warn you, (sorry, I am so used to warning people about tax increases that it comes naturally to use the word, ‘warn’), or I am pleased to inform you that if you can hang in there a little longer they may be on their way.
And ‘I am’ talking about ‘Income tax Cuts’ (IRPEF)!
Renzi and Padoan have realised that the way that the tax rates are structured in Italy basically choke the sector of society which provides the most, the middle earners i.e any income from €15000 upto €55000p.a
Therefore, proposals to restructure the current tax bands are currently on the table. The proposals are as follows:
1. Lower the tax rates by 1% on the tax bands of gross income from €15000 – €28000 and €28001 – €55000p.a. The bands would effectively lower to 26% and 37% respectively.
On an income of €35000 p.a, this would equate to an annual saving of €210 p.a.
That doesn’t sound very interesting does it? Although it would cover my 6 monthly TARES bill.
The other proposal which is also on the table is to radically alter the existing tax bands from 5 tax bands to only 3, as follows:
- The first €15000p.a of income to be taxed at 23%
- Between €15001p.a and €75000p.a taxed at 27%
- Over €75000p.a. at 43%
Certainly the savings would be much more interesting. Using the same example above, someone with an annual income of €35000p.a would make an annual saving of €770p.a.
In reality the first option, a 1% reduction in the 2 tax bands, is likely to be introduced in ‘la Legge di Stabilità 2017’ and to be actioned from January 2018.
At the end of 2016 a proposed cut in corporation tax and a freeze on IVA is expected to be introduced.
Obviously, we should not hold our breaths because all these cuts are Renzi’s proposals and should the public not vote in favour of his Constitutional Reform in October this year, then he has already stated that he would stand down as Prime Minister and then I would imagine the proposed tax reforms would go ‘out of the window’.
In the meantime let’s all get through the BREXIT vote and take one step at a time.
Where there’s a Will
By Pauline Bowden
This article is published on: 7th June 2016
Many people avoid drawing up wills because it requires them to contemplate their own mortality. If you are a foreigner with property and/or other assets in Spain, you should make a Spanish will.
You should also have a will for each jurisdiction within which you hold assets. For example, if you have a bank account in Gibraltar, Isle of Man, Jersey etc, you also need a will in that country.
Each of these wills needs to clearly state that they are for the disposal of assets in that country only and that you want your will to be governed by UK/ other EU country law. Only if you state this, will that disposal of assets be governed by your own national law and not that of Spain.
It is now possible to have your Spanish will made out in two columns. One side in Spanish and the other in English. This is checked by a Notary Public and signed by you, the Notary and your interpreter, if your Spanish is insufficient for you to read the Spanish side of the document yourself. The Testamento Abierto (Open Will) is kept by the Notary, an authorized copy will be given to you and the Notary will send a notification to the Registro Central de Ultima Voluntad in Madrid.
It is important to discuss with your legal or financial adviser in Spain, details of the heirs named on your Spanish will. The more direct descendants that are named in your Spanish will as heirs, the less the Inheritance Tax you should have to pay.
Unlike the UK and many other countries, in Spain it is the person receiving the inheritance that is taxable, NOT the deceased person’s estate.
There are many differences between the UK law and Spanish law on Inheritance and Gift tax and although the UK and Spain have many reciprocal arrangements for double taxation, there is no such arrangement for Inheritance Tax.
To die intestate (without a will) in Spain, makes the process of sorting out the deceased’s estate much more time consuming and costly. For the sake of a small amount of money and an hour of your time, you can leave your affairs in order, to help those left behind.