French Trust Law
By Spectrum IFA
This article is published on: 3rd March 2014
As a financial adviser to the expatriate community, I am contacted by lots of people who have either already moved to France from another country, or are planning to do so. Amongst many other things, people are seeking advice as to how best to structure their financial assets for tax-efficiency in France. Since most of the people I advise originate from Anglo-Saxon countries, it may be the case that they may have an interest in a trust, which creates difficulties for them, due to the French tax treatment of trusts.
In 2011, France introduced legislation, which defined the taxation rules and reporting requirements, concerning trusts with at least one of the following:
- French resident settlor;
- French resident beneficiary; or
- French situated assets – even if the settlor/beneficiaries are not living in France.
Basically, the law is aimed at the ‘family type of trust’ and generally excludes trusts falling outside of this area. A summary of the taxation treatment is shown below.
Income tax relating to trusts
Distributions received from a trust (whether capital or income) are treated as investment income, in the hands of the taxpayer. Therefore, 100% of the amount received is added to other taxable income of the household and taxed according to the progressive rates of income tax set out in the barème scale, for which the highest rate is 45%. Social contributions (current rate 15.5%) are also chargeable on the amount distributed.
Wealth tax (ISF) relating to trusts
The law aims for transparency, so that the real ‘owner’ of the assets placed in a trust can be identified. This will either be the original settlor or where that person has died, the beneficiary is subsequently deemed to be the settlor.
The trustees are required to report the annual value of the assets of the trust and to pay a levy, based on the highest percentage rate of ISF (currently 1.5%) of the underlying value of the trust’s assets. However, the levy is not payable if the French resident taxpayer has already declared the trust assets for ISF. Failure to report by 15th June each will result in a fine of 12.5% of the value of the total trust assets or if greater, €20,000. The settlor and/or the beneficiaries are jointly and severally liable for the payment of the levy and for any penalty as a result of non-reporting.
Gift & succession duty regimes relating to trusts
Lifetime gifts and inheritance transfers from a trust with a French resident settlor or ‘beneficiary deemed settlor’, as well as to beneficiaries who have been resident in France for at least six out of the last ten years, are liable to taxation; so too is the transfer of assets into a trust. For non-resident settlors, the transfer of French assets into or out of a trust (for example, property) is also caught by the rules.
Using the market value of the assets, as at the date of transmission, the tax liability is as follows:
- For trusts set up after 11th May 2011, or for trusts set up in a jurisdiction that has not concluded a Tax Information Exchange Agreement with France (referred to as a “non-cooperative territory”), the tax rate is 60% in all cases.
- For existing trusts, which are set up in a “cooperative territory”, the rate of tax is as follows:
- if the relationship between the settlor and the beneficiary can be identified, the tax rate and allowance will be according to the standard IHT barème scale;
- if the beneficiaries are, globally, the descendants of the settlor, the tax rate will be the top rate for descendants in direct line, i.e. 45%; and
- anything else will be subject to a tax rate of 60%, unless covered by specific exemptions in the French tax code.
Overall, trusts do not work well in France and an alternative structure is needed to achieve the same objectives. Therefore, seeking professional advice from someone who understands both the Anglo-Saxon systems and the French system is essential.
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.
The Spectrum IFA Group Expands in Madrid, Spain
By Spectrum IFA
This article is published on: 3rd March 2014
The Spectrum IFA Group are delighted to announce that Conor MacSherry has joined Chris Webb in the Madrid office.
Conor has worked in Financial Services for 27 years covering all aspects of protection, mortgages, investment and retirement planning. Through many years of management roles covering sales, development, compliance and consultancy, Conor has always maintained his authorisation to deal with and look after his clients directly.
As well as being a fully qualified Financial Adviser, Conor holds a B.A. Degree in Business Studies, a Diploma in Management Studies and a Masters of Business Administration.
Commenting on this recent appointment, The Spectrum IFA Group’s Chairman Michael Lodhi explains that “The group has been expanding within Europe over the past few years and it is clear that our services are badly needed by the expatriate community. This recent appointment under pins The Spectrum Group’s commitment to extend our range of services and add further advisers in Europe to provide expatriates with professional financial advice”.
You can contact Conor directly here
Brandeaux February Update 2014
By Chris Burke
This article is published on: 25th February 2014
Brandeaux February Update 2014
Brandeaux Student Accommodation Fund (Sterling) Limited
Brandeaux Student Accommodation Fund (Multi Currency) Limited
Announcement
Further to the recent press speculation, the Brandeaux Student Accommodation Fund (Sterling) Limited and the Brandeaux Student Accommodation Fund (Multi Currency) Limited confirm that they are continuing to actively review various options with the aim of creating liquidity for their existing shareholders. The options being considered include a potential initial public offering of the assets of the Brandeaux Student Accommodation Fund (Sterling) Limited. The consideration of an initial public offering is at an early stage and there is no certainty at this time that this option will be pursued.
A further statement will be made as and when appropriate.
The above is an extract from Brandeaux on the February update of their suspended funds. In many cases we will be able to help you if you have money frozen in these funds, please contact one of our advisers to find out more
Written by: Chris Burke based in the Barcelona/Costa Brava area
If you are based in that area contact Chris at: chris.burke@spectrum-ifa.com
If you are in another area please complete the form below and we will put a local adviser in touch with you.
Investments can have too much structure
By John Hayward
This article is published on: 24th February 2014
What are structured products?
Structured products are usually set up as an investment of a lump sum in exchange for a return based on the performance of an underlying index such as the FTSE100. They are arranged as fixed term contracts of, normally, 5 to 6 years although some can pay out earlier under certain circumstances. They can be bought from a variety of sources and are particularly popular with banks.
Structured products could be suitable for someone who is willing to buy and hold, understanding that if markets fall sufficiently, then the return could be less than what was paid in. Some structured products offer capital guarantees. This ´promise´ of the return of your initial investment can be somewhat veiled in that the guarantee could be based on the particular underlying index not falling below, say, 50% of its starting level. For example, the initial investment is made and the FTSE100 and that point stands at 6000. 5 years later, the end of the contract, the FTSE100 is at 5700. In this case, the client would receive the full initial investment even though the index level has fallen. Some suggest that the FTSE100 falling by 50% is not likely thus selling the product as risk free. The FTSE100 certainly has fallen by more than 50% in the past (eg. 1999 to 2003).
The people offering any guarantee could be a third party. This is where we have another level of risk, known as counter-party risk. If the third party fails then the guarantee could be worthless.
Another risk is people wanting to access their money before the fixed term is up. The problem is that these products often have no secondary market which could mean you may not be able sell it without suffering a significant loss.
As with all types of investments, there are varieties on a theme, some suitable, some not, depending on one´s risk profile. Complete understanding is essential from the outset.
For more information on how we can protect your savings whilst offering low risk, liquid investments, contact one of our advisers.
Suspended – 20% tax on overseas transfers into Italy
By Gareth Horsfall
This article is published on: 20th February 2014
Suspended – 20% tax on overseas transfers into Italy
The witholding tax of 20% on overseas transfers into Italy has been suspended.
No sooner had the law regarding the 20% withholding tax on transfers from overseas been introduced, than it is suspended. Until July 2014.
The main isssue with the law was one of distinguishing between transfers from abroad that were ‘profit from investment’ and those that were income from other sources, such as pensions. And if you made an auto certificazione’ with your bank to state that you were not bringing money into the country, from profit on investment, then would you have to sign another auto cetificazione when you did? and what happens if you forgot but still declared the asset on your Unico’? These are just some of many questions which needed answering. In the end the law was just another example of very badly thought out policy which really should have been planned more carefully. (Interestingly I have just seen a report that the EU has not condemned the law but says that it needs more thought, essentially)
Athough, the more I think about the law itself, as a way to catch those who were not making accurate declarations, the more I admired it. But once again it came down to implementation and even the best laid ideas are doomed to failure without adequate planning and thought.
That all being said it now seems that, at least for the meantime, Italy will be resorting back to the, what now seems the almost historic, share of information agreements with co-operating countries.
As you may or may not know the EU has an open share of information agreement. Some UK rental property owners found this out to their chagrin in 2012 when the Guardia di Finanza went knocking on doors asking why rental income from a UK property (which interestingly was already being declared and tax being paid in the UK) was not being declared on the Italian tax return. Some of the fines which I heard of were astronomic.
Luxembourg and Jersey have now signed up to a free exchange of information on interest payments, in the EU, from 1st January 2015. Austria will likely follow as the 1st January 2015 marks the entry into force of the mandatory exchange of information agreement across Europe.
The Isle of Man and Guernsey have already agreed a full and open share of information agreement with the EU on income from interest and so the information on offshore bank account holders is fully reported.
And the USA has already entered into agreement with Italy under its FATCA law (Foreign Account Tax Compliance Act) which allows for a free exchange of information on resident individuals in either country. In fact there is a new acronym doing the rounds: GATCA. Global Account Tax Compliance Act.
One of the most interesting points about the Italian move to withhold 20% at source was that it was an open attack on profit from investment.. The share of information agreements, to date, have been mainly focused on interest from savings. Could this mean that the EU is about to enter the next phase of tracking down mis-reported incomes and/or gains from investment. Probably! The mandate has been clear since the implementation of the EU Savings Tax Directive that ultimately the EU will have an open information policy across all EU states on all incomes and profits from savings and investments. We may laugh at the inadequacies of the Italians to implement a law, which on the surface of it seemed ridiculous, but it would not surprise me to see this being the first of many steps throughout the EU to open the information exchange channels even further and to exchange information on almost every financial asset you can think of.
As I have said many times before, if you are a resident in Italy, now is the perfect time to be planning to stay ahead of the game. Many things can be done now to limit losses, limit potential fines, and plan efficiently for tax and it needn’t be painful or frightening.
If you have income and assets in Italy or overseas and want to know how to potentially reduce your tax liabilities and plan more effectively, whilst ensuring you are ‘in regola’, then you can contact me on gareth.horsfall@spectrum-ifa.com or call me on 3336492356
Swedish and living in France
By Tim Yates
This article is published on: 19th February 2014
“I wish I had known about this five years ago when I moved here!”
The subject of this quote from one of your compatriates was “Assurance Vie” (AV) but more of this later. If you attended our seminar at Villa Ingeborg at the beginning of November you will know all about it. If you are tax resident in Sweden and just have a holiday home here in France then it is largely irrelevant to you and you can stop reading now – unless of course you plan to move here permanently at some time in the future.
Many people are hesitant about spending too much time here, and therefore becoming tax resident (even if you would like to make this your home), because the perception is that the tax regime in France is punishing. This is a valid perception if you work here and your income is “earned” income because the social charges are high. However if you are retired and your income is derived from pensions and investments then you could be pleasantly surprised to find out that actually your tax and social charge liability is not as high as you thought it would be – particularly if you take advantage of the various tax efficient opportunities that exist here in terms of structuring your wealth.
If you live here and are tax resident here then AV is definitely something you should be aware of and be familiar with because it could save you a substantial amount of money.
If you have decided to live and work, or have decided to retire, here in France it probably means you are financially comfortable. That being the case you have probably commissioned your bank and/or a financial adviser in Sweden to manage your money in an investment portfolio. They are undoubtedly doing a good job for you (otherwise you wouldn’t still be using them) and they are investing your money wisely. You are holding a well diversified portfolio with exposure to equities, bonds and all the other asset classes. The problem you now have is that your adviser is now suggesting you sell something that has given you substantial capital growth. Whilst you have no need to take the money out of your portfolio to spend never the less if you follow their advice you will have a significant capital gains tax liability on the sale. You could have “wrapped” your investment portfolio in such a way that would have meant that you wouldn’t have had any tax liability until you decided to take the money out of the portfolio to spend it – and even then it would have benefitted from a lower rate of tax depending on how long it had been wrapped.
That seems too good to be true? – I hear you say – and what happens if the rules change. It is true that the French government could change the rules and it is rumoured that they will reduce the tax benefits of assurance vie (AV). However it is highly unlikely it will be retrospective and to understand why we need to look at when and why this all started. Back in the 1970’s most western European governments wanted to encourage families to take out life assurance to ensure that, on the death of the income earner, the family was not going to be a financial drain on the state. To do this they introduced a preferential tax regime for life assurance policies.
However they didn’t define life assurance quite as precisely as perhaps they intended. You have life assurance that is pure protection – i.e. you pay your premium each month but it has no value during your lifetime but will pay out a lump sum when you die to make sure your family are financially looked after on your death. You also have life assurance investment plans where the money you have put into them is always available to you during your lifetime but on death will pay out 101% of the value of your investment portfolio. This extra 1% means it qualifies as a life assurance policy and a preferential rate of tax is applied to the proceeds on death. This was clearly not the intention so why haven’t successive governments not closed this “loophole” where you have an investment portfolio masquerading as a life assurance policy? The simple reason is that politicians generally will not do anything to disadvantage themselves and their families even if this means compromising their ideological principles. There are 22 million AV policies in France and it is highly likely that all the members of our present government will have some of their capital wrapped in one.
There is another advantage of having your assets wrapped in an AV policy – unlike unwrapped assets they do not have to follow the French forced heirship rules. If you want to leave your estate to your spouse then you can if it is AV wrapped. Otherwise if you have one child they have to inherit half of your estate. With two children it is 2/3 and with three or more children it is 3/4 divided equally between them. This may not be a problem for you but whilst everything you leave to your spouse is tax free only the first €100,000 you leave to each of your children is free of tax. If you have re-married and have children from a previous marriage then it gets really complicated because anything your children from your previous marriage receive from a “step parent” is liable for 60% tax as there is no blood relationship between the two. With AV wrapped assets you are free to leave them to whoever you choose and the tax they pay (if it is not a spouse) is not determined by how closely related they are.
The bottom line is that investment management is only part of wealth management and that what you have done in Sweden, in terms of structuring your investments, to mitigate tax may not be as tax efficient in France. Clearly assurance vie is more complex than I have space to cover comprehensively in an article like this. However if it is a subject that is of interest to you please contact me and I am more than happy to detail how it could be relevant to your financial planning and remember that existing portfolios can be wrapped without you having to sell everything and then buy it back.
Brandeaux Suspended Funds Update
By Chris Burke
This article is published on: 19th February 2014
The following is an extract from Brandeaux on the latest update of their suspended funds. In many cases we will be able to help you if you have money frozen in these funds, please contact me below to find out more:
Chris Burke
Partner
Office; 34 936652828
Mobile; 34 689915730
chris.burke@spectrum-ifa.com
Ground Rent Income Fund Limited, The Ground Rent Portfolio Limited Ground Rent Portfolio Plus Limited (the “Ground Rent Funds”)
Brandeaux Dual Asset Fund (Sterling) LimitedBrandeaux Dual Asset Fund (US Dollar) LimitedBrandeaux Dual Asset Fund (Euro) Limited(the “Dual Asset Funds”)
Brandeaux Student Accommodation Fund (Sterling) LimitedBrandeaux Student Accommodation Fund (Multi Currency) Limited(the “Student Funds”)
(and together the “Brandeaux Funds”)
The Ground Rent Funds
Update on sales The Brandeaux Update of 26 September 2013 reported that the Ground Rent Funds were in negotiations on sale transactions representing approximately 80% of the total value of the ground rent properties.
Brandeaux is pleased to report that property sales to release approximately £173 million of liquidity available for shareholders have now been achieved representing approximately 37% of the total remaining assets of the Ground Rent Funds. The sale prices for these properties are in line with the directors’ expectations as communicated in our last Brandeaux Update of 26 September 2013 and therefore there is no change to the current share price of any of the Ground Rent Funds.
The potential buyer for the remaining properties that we reported in our September Update as being at an advanced stage failed to complete the purchase in the agreed time frame. This was unexpected and disappointing, but the continuing interest that has been shown in these properties is very positive and a reflection of their inherent value. Brandeaux has recommenced marketing of these properties and will report progress as it develops. In addition, Brandeaux is actively marketing two remaining portfolios and has received significant interest.
Future of the Ground Rent Funds Given the desire that has been expressed by investors in the Ground Rent Funds to realise liquidity, and following the positive results achieved in property sales so far, the directors of the Ground Rent Funds have resolved to market and sell all the remaining properties within the Ground Rent Funds. Once completed, the intention is to wind-up the Ground Rent Funds.
The directors do not wish to wait until winding-up the Ground Rent Funds is completed before releasing to shareholders the proceeds of the sales achieved thus far and so, after allowing for ongoing operating cash requirements and transaction costs, it is intended that the net proceeds will be released to shareholders as quickly as possible. It is presently anticipated that this will take place early in the New Year.
In view of the intention to wind-up the Ground Rent Funds, the directors consider that the best way of ensuring that all shareholders benefit fairly from the liquidity created by the sales is to make compulsory pro rata share redemptions to all shareholders. The effect is that every shareholder will
receive a proportion of the available liquidity based on their current percentage shareholding. The directors have written separately to all shareholders in the Ground Rent Funds to provide further details of the arrangements, process and timing of the redemptions.
The directors will keep under review the progress of further sales and whether further redemptions can be made as further property sales are achieved prior to the commencement of the winding-up process. It is not possible to say definitively when further property sales will complete and, therefore, when the winding-up process will commence. However, the directors are taking steps to progress these matters as quickly as possible while at the same time preserving shareholder value.
The Dual Asset FundsThe Dual Asset Funds, which are shareholders in Ground Rent Income Fund Limited (as well as in Brandeaux Student Accommodation Fund (Sterling) Limited), will receive their share of the net proceeds of the Ground Rent property sales as these are distributed. The Dual Asset Funds will distribute their share of the proceeds of each redemption to their own shareholders on the same basis as the Ground Rent Funds, namely by way of a compulsory pro rata share redemption to all shareholders. It is intended that this will be carried out promptly following the share redemptions by the Ground Rent Funds. The effect is that every shareholder will receive a proportion of the available liquidity based on their current percentage shareholding.
The directors have written separately to all shareholders in the Dual Asset Funds to provide further details of the arrangements, process and timing of the redemptions.
Future of the Dual Asset Funds The Dual Asset Funds were created to give investors exposure to both the Ground Rent and Student Accommodation asset classes within one fund. Once the Ground Rent Funds are wound-up, the Dual Asset Funds will no longer be invested in both asset classes. The directors therefore intend to wind-up the Dual Asset Funds in due course. In order for this process to be completed it will be necessary for the Dual Asset Funds to first realise their investment in Brandeaux Student Accommodation Fund (Sterling) Limited and then distribute the proceeds to shareholders. Accordingly, it will be necessary for liquidity to be achieved in the Student Funds before the Dual Asset Funds can be wound-up.
Important information for IFA’s who have clients invested in The Ground Rent Funds and the Dual Asset Funds through institutional platformsThe shareholders of the Brandeaux Funds are the institutional platforms that hold Participating Shares in these funds. Brandeaux does not have details of any underlying investors (neither their names nor bond numbers) and are unable to identify their individual holdings. IFA’s should contact the relevant platform for information concerning queries from their clients, and the process and timing of distributions from the platforms over which Brandeaux has no control.
The Student Funds The directors are actively continuing the process for the creation of liquidity for shareholders through property sales and other means, although the timeframe remains, at present, uncertain. A number of discussions have taken place over the past six months and the directors are actively looking at various alternative ways to create liquidity for investors but at this time there is nothing further to report.
A further update will be sent when there is information of significance to report.
16 December 2013
This Update is for information purposes only and is not intended as an offer or solicitation to anyone in any jurisdiction in which such an offer or solicitation is not authorised, or to any person to whom it would be unlawful to make such an offer or solicitation. Persons who receive this Update are required to inform themselves about and observe any such restrictions and should seek professional advice. This Update should be read in conjunction with the Funds’ Articles of Association and Private Placement Memoranda. Information and representations herein are based on information available at the date hereof, and are, therefore, subject to change. In particular, past returns are not a guide to future returns and the value of shares may go down as well as up. Moreover, returns in non-sterling denominated shares classes may increase or decrease subject to currency fluctuations. Brandeaux calculates its returns net of Brandeaux charges. This Update is distributed on behalf of Brandeaux Managers Limited by Brandeaux Administrators Limited, Brandeaux House, 13 Upper Mount Street, Dublin 2, Ireland, which is authorised and regulated by the Central Bank of Ireland under the Investment Intermediaries Act, 1995.
Investing for a higher Income
By Gareth Horsfall
This article is published on: 18th February 2014
Investing for a higher Income
Investing for income, rather than capital appreciation, is as old as investing itself but its relevance becomes more noticeable in times of low bank interest rates. (Or historically low as the media likes to keep reminding us).
It offers an additional lifeline for those who need to live from the interest from their savings and not just accumulate for a point in the future. The relevance is bigger for those who are not working and do not have a regular income due to ill health, out of work or in retirement.
To elaborate this theme, I have written in the past how an investment should be considered to behave like a garden. It should be well cared for, maintained, trimmed, fed and watered otherwise it becomes out of control and the weeds take over. In no time the tendered beauty and joy of a well cared for garden, diminishes.
Well, I would like to expand on that concept further to explain the purpose of investing for income.
For most of our working lives we try to accumulate capital, save from the very money that we earn to amass the assets that we will one day live off in retirement. But during this time, you may be unaware that you are actually investing for income as well. Its just that the income is being reinvested back into your account to make the capital appreciation quicker. The difference is that when you reach the point when you want the income, you invest in those assets which pay the better levels of interest and have it paid out instead of reinvested.
If we think about it another way, it is the equivalent of the garden. A beautiful cottage style garden that you cultivate from seed and over many years that you carefully tend to. The flowers bloom each spring, and you diligently tend to the plants as they grow, check for problems, apply pest control methods, trim the flowers to put on your kitchen table and enjoy the joy that it brings for you and the family over the years. During this time you may have a small vegetable plot. (the equivalent of an income). But during your working years you have to invest in earning a living and this may prevent you from expanding the vegetable plot, after all you earn enough money to buy vegetables from the supermarket instead of growing them. The garden provides joy and pleasure but only a small amount of income.
When you finish working and your income level may drop, you now have more time to spend on the part of the garden that can provide you with more of the supplemental income.
But, there are 2 types of vegetable plot, those that provide and those that don’t. The difference relies heavily on the soil. The fertility of soil in which you plant those veggies. If your soil becomes too abused it will stop producing. (Note, Westernised economies and the reason for low interest rates). So you have to look at either changing the type of vegetables you plant (crop rotation) or changing the soil. Both can be as effective as one another.
This is the basic concept of investing for income. If one area is not providing sufficient rewards, then it is time to look elsewhere. (Note, bank interest rates are so low that to maintaina standard of living it is necessary to look at other forms of income producing assets)
Example
I would like to talk about Vodafone for a moment and in particular shares in Vodafone. We all know the name but you may not know the significance of Vodafone as an income producing share.
The talk of shares in companies scares alot of people, but Vodafone is a good example of a reliable company that rewards it shareholders with good dividends (income) for being an investor. At the time of writing, if you invested in Vodafone stock today, you would be rewarded with an interest rate of 5.13%. And Vodafone also has a long history of paying income to its investors and more importantly a rising income.
See the table below for the facts
|
Year ended 31 March |
Interim Dividend |
Final Dividend |
Total Dividend |
Growth % |
| 2010 | 2.6600 | 5.6500 | 8.3100 | 6.95 |
| 2009 | 2.5700 | 5.2000 | 7.7700 | 3.46 |
| 2008 | 2.4900 | 5.0200 | 7.5100 | 11.11 |
| 2007 | 2.3500 | 4.4100 | 6.7600 | 11.37 |
| 2006 | 2.2000 | 3.8700 | 6.0700 | 49.14 |
| 2005 | 1.9100 | 2.1600 | 4.0700 | 100.00 |
| 2004 | 0.0535 | 1.0780 | 2.0315 | 20.00 |
| 2003 | 0.7946 | 0.8983 | 1.6929 | 14.99 |
| 2002 | 0.7224 | 0.7497 | 1.4721 | 5.00 |
| 2001 | 0.6880 | 0.7140 | 1.4020 | 5.01 |
| 2000 | 0.6550 | 0.6800 | 1.3350 | 4.95 |
The thing to note is that from the 10 years till 2010 Vodafone increased its dividend 231.98%. If this were the equivalent of bank interest, assuming bank interest started at 3% in 2000, then you would be receiving 6.959% interest on your bank interest in 2010. (The dividends have also been increased through 2010 to 2013 as well !!, so the rate today would be even higher). All this through 2 stock market crises (the tech boom and bust of 2000 and more recently the financial market collapse of 2008/2009). It should be noted that the underlying stock price has increased during this time as well.
I am not recommending that you go online today and buy Vodafone stock. With all investments of this type it comes with risks, management of the business, future profitability of the business and ability to continue to pay dividends, profit warnings, market sentiment, to name a few. However, you can minimise your risk of investing in this way by investing through a fund that specifically invests, manages the risk and can pay out the income.
The point of this blog post is to reiterate the point that if you feel that bank interest is not satisfactory for your living requirements, or you have a tax bill because of being resident in Italy and need supplementary income to pay it, or you just need some more income to make life easier then there are alternatives to leaving the money in the bank or investing in Government Bonds (the historical investment choice of type for the ‘average’ Italian).
If you would like to know how to build a portfolio of income producing assets or would like to discuss any other ways of improving your current financial situation then you can contact me on gareth.horsfall@spectrum-ifa.com or call me on 3336492356.
Aude Flyer
By Spectrum IFA
This article is published on: 14th February 2014
Another busy year is under way; at least it’s certainly started that way. I can’t believe that March is on the horizon already. January saw the gathering of most of the Spectrum clan in Davos for the Financial Forum. This is our annual conference; a time to gather together to discuss the last year and to ponder what might await us in the coming months. As it transpired, 2013 was a fabulous year for Spectrum, with business up a massive 51% over the previous year, which had in itself been a record year.
We are joined at these events by market experts from leading financial houses to offer their input on various financial topics. These sessions are always informative, and often entertaining. The ‘most entertaining’ title clearly went to a Swiss lawyer, who took us through the demise of the famous Swiss Banking Secrecy era, a subject very pertinent to Daphne’s article two weeks ago. Amazingly tax fraud, or ‘frode’ as it became for the session, is not illegal in Switzerland. It is a civil infringement of course, and subject to fines, but the genteel Swiss still recognise that to err is human. Anyone can forget a few tax details here and there, can’t they? Not if you live in France or the UK you can’t, so please bear that in mind.
It is amazing to me how administratively far behind you can get when you take a five day break from the office. Despite keeping in email contact and handling any urgent items by phone, my in-tray was overflowing when I returned from Davos. This was partly because of my policy of sending out policy statements to all my clients just after the end of each quarter. I find this can tend to focus the mind on investments, and helps both me and my clients to keep on top of things. Anyway, the two factors combined to ensure that any leisure pastimes I might have had planned were put aside for a while.
Since then of course a more normal timetable has been restored, and it is largely business as usual, albeit still busy. Meeting new clients for the first time; writing up reports and then arranging follow-up meetings; executing (hopefully) the ideas presented in the reports, these are only a part of a day’s work. Monitoring existing business on a regular basis is vital, hence the quarterly reporting. Then there is also the financial ‘agony uncle’ side to the work, which I find extremely interesting. E-mail enquiries generated from any number of sources covering all types of financial questions land in my in-box every week. Sometimes I read them and have no idea what the answer is (such as ‘where can I source bulk volumes of ice cream for my new business in Carcassonne?’ or ‘can I use my UK credit card on motorway petrol pumps on national holidays?). Yes, really.
Life as a financial adviser is fairly consistent. There are only so many mainstream subjects (not ice cream) that can crop up in my daily routine, so it is refreshing when something out of the ordinary comes up, and recently I had a very interesting time doing some research for a new client who wanted his money to be invested in SRI funds. I doubt that many readers will have heard of SRI, but it stands for ‘Socially Responsible Investing’, perhaps better known as ethical investments. This is not new to me of course, but it isn’t something that crops up in many client meetings. I tend to think of new clients in investment terms along the scale of carnivores or herbivores; meat eaters or vegetarians. Meat eaters will invest in most things, and tend to assume that they are not consuming, or indeed investing in, anything toxic. Vegetarians are more complex. A normal Veggie will need reassurance that he is not eating any meat or meat derivative products. In other words he doesn’t want to invest in any of the bad people who pollute our world physically or morally. Then there are the Vegans, who are not satisfied by the Veggie approach. No occasional fish or eggs or milk for them; they are straight down the line. No meat. Period. The Vegan investor isn’t satisfied with avoiding the bad guys; he’s out to find the good guys and invest in them. He wants to support irrigation projects; AIDS and Cancer research; sustainable energy sources and the like. Vegan investors can be difficult to please, as to some even ‘profit’ is a bad word, but trying can be a rewarding experience.
Back to more mundane matters next month, but until then, keep the calls and mails coming!
If you have any questions on this, or any other subject, please don’t hesitate to contact me, Rob Hesketh:
By phone on 0468 247758 or mobile 0631 787647
Or by mail at rob.hesketh@spectrum-ifa.com You can find out more about Spectrum on spectrum-ifa.com
Is my Assurance Vie flexible?
By Amanda Johnson
This article is published on: 14th February 2014
How flexible is my Assurance Vie, should my needs or circumstances change in the future?
When you take out Assurance Vie it is not only important that the money you put in is invested properly for your requirements and attitude to risk today, but that it can be managed, reviewed regularly and changed should your circumstances alter in the future.
Here are several questions you may want to consider when you when choosing or reviewing your Assurance Vie:
How do I change how the money is invested within my assurance vie?
During your annual review or should your circumstances change, it is important to be able to review your Assurance Vie and understand how it is performing. If it is not matching your requirements the mechanism for changing or swapping how your money is invested should be simple and not cost prohibitive.
How often can I change the contents of my assurance vie?
Flexibility to change how money is invested within your Assurance Vie, simply and inexpensively is important. You cannot predict when you may wish to change how your money is invested or encounter an unexpected need to withdraw some of it at short notice, so having a local financial planner who can manage this process simply and efficiently is a good idea.
How flexible is an Assurance Vie should I decide to leave France and live somewhere else?
It is important to ensure you are Assurance Vie portable should you wish to change your country of residence?
Do I understand the charges applicable to my Assurance Vie?
Whether you already have an Assurance Vie or are looking to take one out it is important to understand your obligations regarding applicable charges, taxes and social charges. It is worth noting that where & how your money is invested can have impact on social charges you are liable to incur.
At The Spectrum IFA group we firmly believe that your free financial health check is just the start of our ongoing commitment to your financial well-being. If you want to understand more about the options you have with an Assurance Vie, register for our newsletter, attend one of our road shows or speak to me directly, please call or email me on the contacts below & I will be glad to help you. We do not charge for reviews, reports or recommendations we provide.
Amanda Johnson
tel : 05 49 98 97 46 or 06 73 27 25 43
e-mail : amanda.johnson@spectrum-ifa.com
web: https://spectrum-ifa.com/amanda-johnson
March Financial Surgeries:-
- Thursday 13th March Café des Belles Fleurs, Fenioux 10.00 – 12 noon.
- Tuesday 25th March Pause Café, L’Absie 10.00 – 16.00
- Thursday 27th March Café Cour du Miracle Vouvant 11.00 – 15.00
- Friday 28th March Open Door Library, Civray 10.00 – 12 noon