So What’s Your Strategy ?
By Chris Webb
This article is published on: 30th April 2016
Investing is not a sure thing in most cases, it is much like a game – you don’t know the outcome until the game has been played and a winner has been declared.
Anytime you play almost any type of game, you have a strategy. Investing isn’t any different – you need an investment strategy.
An investment strategy is basically a plan for investing your money in various types of investments that will help you meet your financial goals, depending on your time horizon.
Each type of investment contains individual investments that you must choose from. A clothing store sells clothes – but those clothes consist of shirts, trousers, dresses, skirts etc. The stock market is no different, it’s a type of investment, it contains different types of stocks and different companies that you can invest in.
If you haven’t done your research, it can quickly become very confusing – simply because there are so many different types of investments and products to choose from. This is where your strategy, combined with your risk tolerance and investment style, all come into play.
If you are new to investments, we will work closely together to ensure you have a full understanding before making any investments. I will help you develop an investment strategy that will not only fall within the bounds of your risk tolerance and your investment style, but will also help you achieve your financial goals.
Never invest money without having a goal and a strategy for reaching that goal! This is essential.
Nobody hands their money over to anyone without knowing what that money is being used for and when they will get it back! If you don’t have a goal, a plan, or a strategy, then you are essentially handing your money over without any idea of what it can do for you!
How Much To Invest?
By Chris Webb
This article is published on: 28th April 2016
Many first time investors think that they should invest all of their savings. This isn’t necessarily true. To determine how much money you should invest, you must first determine how much you actually can afford to invest and, just as importantly, what your financial goals are.
So, how much money can you currently afford to invest? Do you have savings that you can use? If so, great! However, you don’t want to cut yourself short when you tie your money up in an investment. What were your savings originally for?
It is important to keep three to six months of living expenses in a readily accessible savings account – don’t invest that money! Don’t invest any money that you may need to lay your hands on in a hurry in the future.
So, begin by determining how much of your savings should remain in your savings account, and how much you feel you are comfortable to use for investments.
Next, determine how much you can add to your investments in the future. If you are employed, you will continue to receive an income, and you can utilise your surplus income to build your investment portfolio over time.
Together we can work at setting a budget and determine how much of your future income you will be able to invest.
With my help, you can be sure that you are not investing more than you should or less than you should in order to reach your investment goals.
For many types of investments, a certain initial investment amount will be required. This at first glance, may look out of your reach. However I may be able to reduce these entry levels.
If the money that you have available for investments does not meet any required initial investment, you may have to look at others. Never borrow money to invest, and never use money that you have not set aside for investing!
Stabilise first then invest
By Chris Webb
This article is published on: 14th April 2016
Before you consider investing in any type of market you need to take a good look at your current situation. Investing for the future is a priority but clearing up potentially bad situations in the present is just as important.
Assess your liabilities, you should do this once each year. It is important to know what is outstanding and what the time horizon to clear it is.
If you’ve set aside some money to invest, but you have outstanding debts, you are better off cleaning up the debt first!
Next, look at what you are paying out each month, and get rid of expenses that are not necessary. For instance, high interest credit cards are not necessary. Pay them off and get rid of them. If you have high interest outstanding loans, pay them off as well.
If nothing else, exchange the high interest credit card for one with lower interest and refinance high interest loans with loans that are lower interest. You may have to use some of your investment funds to take care of these matters, but in the long run, you will see that this is the wisest course of action.
Get yourself into good financial shape – and then enhance your financial situation with sound investments.
It doesn’t make sense to start investing funds if your bank balance is always running low or if you are struggling to pay your monthly bills. Your investment monies will be better spent to rectify adverse financial issues that affect you each day.
French Tax Return dates 2016
By Spectrum IFA
This article is published on: 11th April 2016
The time is approaching for French residents to make their 2016 income tax declarations and there is an important change in procedure.
If your revenue fiscal de reference (taxable income) was at least €40,000 in 2014 (i.e. as declared in 2015), then you are now obliged to make an on-line declaration. The only exception to this is if your principal residence does not have an internet connection, in which case, you can still submit a paper declaration. By 2019, only on-line declarations will be possible and between now and then, the ceiling of the income limit for paper declarations will reduce each year.
On-line declarations can be made from 13th April 2016 up to the following deadlines:
• 24th May 2016 for departments 01 to 19;
• 31st May 2016 for departments 20 to 49; and
• 7th June 2016 for all other departments and non-residents.
Paper declarations, where permitted, must be submitted by 18th May 2016.
For those of you who came to live in France during 2015, then you will need to make your first French tax declaration and declare all your worldwide income and gains, but only for the period since becoming resident in 2015. To do this, you will need to collect the necessary forms from your local tax office.
Income and gains that might be tax-free in another country, for example, UK ISAs, premium bond winnings and Pension Commencement Lump Sums, must be declared, as all are taxable in France. Even for income that is taxable in another country, for example a UK government type of pension (i.e. civil service, military, police and teachers pensions, but not State pensions) and/or UK property rental income, the amount must still be reported in France and it will be taken into account in calculating your French income tax. You will then be given a tax reduction to take into account the fact that the income is taxable elsewhere.
If you have been living in France for less than 183 days in 2015, you may be thinking that you do not need to register in the French tax system. This is a myth because the time that you spend in France is not the only factor that is taken into account in determining whether or not you are resident in France. For more on this, please see my article at:
If you do not register in the French tax system and you should have done, you risk a financial penalty. Never mind what that nice lady in the tax office says about you not needing to register if you have been here for less than a year – you will be liable for the fine, not her!
Are you convinced now to register in the system? If you’re still not sure, call me and with just a few questions, I will be able to tell you.
It is also obligatory to declare the existence of bank accounts and life assurance policies held outside of France, regardless of whether these accounts pay interest or if there is a zero balance in the account. The penalties for not doing so are €1,500 per account or contract, which increases to €10,000 if this is held in an uncooperative State that has not concluded an agreement with France to provide administrative assistance to exchange tax information. Furthermore, if the total value of the accounts and contracts not declared is at least €50,000, then the fine is increased to 5% of the value of the account/contract as at 31st December, if this is greater than €1,500 (€10,000 if in an uncooperative State).
No-one should ever try to second guess the Fisc or think that they can out-manoeuvre this government department. I hear some interesting stories of people being contacted and questioned about why they are not registered in the French tax system. You would be amazed at what is used to check – telephone bills, utility bills, etc., etc. How long will it be before our use of cash machines and our bank and credit card transactions in shops might be used to verify how much time we spend in France? Scary thought and actually they probably don’t need to go that far, as we can be tracked through our mobile phones and probably also our internet use.
On a final note, if anyone finds that they need to complete the pink 2047 form, this means that you have foreign income and/or gains to declare. If this is for any reason other than pension income and earnings, then perhaps you may benefit from a brief discussion to see if your financial situation can be improved by investing in something that is more tax-efficient for French residency.
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 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 at
https://spectrum-ifa.com/spectrum-ifa-client-charter/.
Reasons To Invest
By Chris Webb
This article is published on: 8th April 2016
Have a think about how different our lives are compared to our parents or grandparents….. How often do we travel? How used to our luxuries in life are we? Well guess what ……. this all costs money and as we are all going to retire at some point it might be a good idea to start thinking about that cost now!
This is why investing has become increasingly important over the years. Gone are the days of relying on the state to look after you in your golden years, and I’m pretty sure leaving your cash in the bank isn’t going to get the results you need either.
Times are changing and more and more people want to insure their futures, and they already know that if they are depending on state benefits, and in some instances company pension schemes, that they may be in for a rude awakening when they no longer have the ability to earn a steady income.
Investing is the answer to the unknowns of the future.
You may have been saving money in a low interest savings account over the years. Now, you want to see that money grow at a faster pace. Perhaps you’ve inherited money or realised some other type of windfall, and you need a way to make that money grow. Again, investing is the answer.
Investing is also a way of attaining the things that you want, such as a new home, a university education for your children, or the longest holiday of your life………… retirement.
Of course, your financial goals will determine what type of investing you do.
If you want or need to make a lot of money fast, you will be more interested in higher risk investing, which will hopefully give you a larger return in a shorter amount of time. If you are saving for something in the far off future, such as retirement, you would want to make safer investments that grow over a longer period of time.
The overall purpose in investing is to create wealth and security, over a period of time. It is important to remember that you will not always be able to earn an income… you will eventually want to retire.
You cannot rely on the state system to finance what you want to do, and as we have seen with Enron, you cannot necessarily depend on your company’s pension scheme either. So, again, investing is the key to insuring your own financial future, but you must make smart investments.
Spectrum sponsored DFAS lecture – Costa del Sol, Spain – Wednesday 16th March.
By Charles Hutchinson
This article is published on: 7th April 2016
The Spectrum IFA Group co-sponsored an excellent NADFAS (National Association of Decorative & Fine Arts Societies) lecture on 16th March at the San Roque Golf & Country Club on the Costa del Sol. The Spectrum Group was represented by our local adviser, Charles Hutchinson, assisted by his wife Rhona who attended along with our co-sponsor George Forsyth from Prudential International.
The National Association of Decorative & Fine Arts Societies is a leading arts charity which opens up the world of the arts through a network of local societies and national events.
With inspiring monthly lectures given by some of the country’s top experts, together with days of special interest, educational visits and cultural holidays, NADFAS is a great way to learn, have fun and make new and lasting friendships.
At this event, around 150 attendees were entertained by an immensely interesting and informative historical talk on the Russian royal family and Fabergé’s Easter Eggs made for the Imperial Russian Court, by Toby Faber of the publishers Faber & Faber.
The talk was followed by a drinks reception which included a free raffle for prizes including CH produced Champagne and a coffee table glossy book on Fabergé. Prudential also supplied a presentation bottle of 12 year old malt whiskey and smaller gifts.
All in all, a good turnout and a very successful event at a wonderful venue. The Spectrum Group were very proud to be involved with such a fantastic organisation and we look forward to next season this Autumn.
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Are your investments tax compliant in Spain?
By John Hayward
This article is published on: 30th March 2016
Many UK nationals resident in Spain will have premium bonds, ISAs, unit trusts, and other vehicles which, although tax efficient in the UK, are not in Spain and are therefore non-compliant for tax purposes. Tax on the growth on these investments may need to be paid in Spain each year, whether withdrawn or not. The advantage of a Spanish Compliant investment, “wrapped” within an insurance policy, is that tax is only payable on gains when these are withdrawn. The gains are charged at SAVINGS TAX rates and NOT INCOME TAX rates. Tax savings can be significant when investments are organised in line with Spanish regulations.
Tax increase on pension funds
The lifetime allowance on pensions will reduce from 6th April 2016. For those who have pension funds over £1 million, 55% tax will be payable on the excess taken as a lump sum. A 25% charge will apply to income although, for a higher rate taxpayer, this extra tax could mean an overall rate of 55% as well. For every £10,000 of income, £5,500 would go in tax. There are people who have not reached this level of pension fund. However, let´s say that there is currently £800,000 in pension savings. With 5% increases each year, in 5 years´ time the funds will be worth over £1 million. There are ways to protect against this charge, up to certain limits and with restrictions. This is one of the reasons why a QROPS arrangement could be suitable for those living overseas as these additional tax charges do not apply to QROPS.
Source: https://www.gov.uk
Additional Spanish Succession Tax for non-EU membership
With effect from 1st January 2015, any non-resident who inherits a Spanish asset, and is an ascendant (parent or grandparent), descendent (child or grandchild), or a spouse of the deceased, will be treated in the same way as a Spanish resident, receiving the same allowances and benefits. The tax will then be dependent on the autonomous region in Spain where the deceased was resident or where the asset is situated. This treatment only applies to EU citizens. The EU referendum on 23rd June in the UK could have a serious impact on what future taxes could be due for residents of the UK who inherit Spanish assets.
Source: http://www.legaltoday.com
Le Tour de Finance Italy
By Spectrum IFA
This article is published on: 30th March 2016
We know our clients well and can tell you what their main
financial concerns are in today’s world.
- What will happen to my money if Italian banks go bust?
- What will the impact of BREXIT be on my money and should I change my Sterling into Euro now or wait until until later?
- Is it possible to pay less tax in Italy?
- Do I have the right financial products for a resident of Italy, even if I have finances in other countries?
- Am I invested in the correct financial markets given the ups and downs at the moment? Is it really possible to protect my money from recent falls in value like that of the oil price?
If you would like to know the answers to any of these questions, you are invited to a FREE seminar where The Spectrum IFA Group will bring you a cross section of experts in International and Italian financial matters.
Le Tour de Finance Italy
- April 13th – the Santa Caterina Hotel,Las Spezia
- April 14th – the UNA Hotel Tocq, Milano
The events will commence at 10:30 with a welcome caffè and end at approx 14:00 following a FREE buffet lunch including wine and a chance to speak with the experts one on one. The discussion will start at 11:00 with brief presentations followed by targeted questions for the speakers by Gareth Horsfall of the Spectrum IFA Group (Italy). During this time, we openly welcome questions from the attendees and even welcome questions in advance of the event.
The speakers on the tour will be:
Chris Wanless: Associate Director at Rathbones Investment Managers (UK)
Answering questions on the state of world financial markets and how to protect yourself from further falls in the markets.
Andrew Lawford: From SEB life International.
Explaining how to utilize the Investment Bond as a way to minimize taxes on assets for Italian resident expats.
Judith Ruddock: Representing cross border tax experts, Studio del Gaizo Picchioni
Judith will be taking questions on being ‘in regola’ in Italy.
Gareth Horsfall: Manager of The Spectrum IFA Group in Italy
Discussing financial planning issues that concern all foreigners living in Italy.
For further information on Le Tour de Finance Italy and to book your place please click here
Retiring abroad – BBC.com article featuring The Spectrum IFA Group
By Spectrum IFA
This article is published on: 29th March 2016
Daphne Foulkes was recently asked to contribute to an article by the BBC.com on what to consider if you’re thinking about retiring abroad or to a warmer climate.
You can read the full article here
Le Tour de Finance
By Spectrum IFA
This article is published on: 21st March 2016
The first spring leg of Le Tour de Finance has finished in France, with three events being held in Limoges, Poitiers and Mouzeil.
The events were a resounding success with attendance up on last year and an extended pool of international guest speakers present for the three events. The organisers work hard to bring representatives from large international financial institutions to these events, giving attendees unrivaled personal access to these experts and asksome of those ‘need to know’ questions in a small and informal group. Each event ends with a complimentary buffet and offers attendees even more personal access to the experts.
Le Tour de Finance will return to France in May with events in Toulouse, Bergerac and Brantome with further events in June.
Le Tour de Finance – Italy
Le Tour de Finance continues in April with events in La Spezia on the 13th April and in Milano on the 14th April. More information and booking information can be found here.
Le Tour de Finance – London
We are also pleased to announce that Le Tour de Finance will be running an event in London. This is the perfect opportunity for those of you who are thinking of making the move to France and will allow you to ask these experts direct questions about becoming an expat.
For more information about Le Tour de Finance in London please click here