Your right to vote and the risk of doing nothing

By John Hayward
This article is published on: 31st October 2019

31.10.19

So we pass another Brexit date with 31st January 2020 the next one. I have some questions:

Will there be a (another) referendum before?
Who will win the General Election on 12th December?
Does anyone in a position of power really care?
What will I get for Christmas?

These are all unknowns, to me at least, but there are two that I can have an influence on. If I´m good, I could get something nice for Christmas. Perhaps a matching sock for last year´s. I could also have an effect on who gets elected in the UK on 12th December.

The 15 year rule
It is generally known that one has up to 15 years to register to vote in General Elections in the UK having moved abroad. Although there has been talk about abolishing this rule, it still exists. One aspect generally unknown is that you have the right to vote if you registered within the last 15 years after moving abroad. Therefore, this means that you can vote in the upcoming election if you registered on or after 12th December 2004. In my case, after leaving the UK in late 2004, I believed that I had missed the opportunity by a month or so. In fact, and because I registered to vote in the 2005 election, I have been told by my last constituency office that I have until 2020 to continue voting.

If you left the UK within the last 15 years then you simply register now. I believe that you have up until 25th November to do so. If you have registered to vote within the last 15 years, after leaving the UK, I suggest that you get confirmation from your last constituency office and then register to vote in the coming election at https://www.gov.uk/register-to-vote.

Unfortunately, this could be an election based purely on Brexit. We know more now than we did in June 2016 and so, hopefully, whoever wins, there will be clear direction and they get on with leaving or staying.

Lost benefits waiting for Brexit
Many people have delayed making decisions due to Brexit uncertainty, especially when it comes to buying property or investing. On the property side, this has meant missing out on property value gains, lost rental revenues, or simply a delay in the dream move. From our side, in the investment world, those who have been invested in the types of cautious fund that we promote have seen their money grow by over 20% since the referendum in June 2016. At the same time, for those people who have left their money in the bank in readiness for what they didn´t really know, have seen their money reduce in real value by around 11% through inflation. In simple terms, £100,000 invested in a low risk fund would now be worth £120,000, £107,000 when allowing for 11% inflation. Left in the bank, with no interest, £89,000. People would be up in arms if they were told that their bank was charging them 2% (£2,000 in this example) a year in charges but this is effectively what inflation has caused and has been the consequence of ‘playing safe’.

There´s probably another ‘Brexit’ around the corner, but life goes on. I look forward to receiving my sock regardless of who is Prime Minister on 25th December.

To find out more about how you could benefit from quality financial planning advice and years of experience both in Spain and the UK, contact me today on +34 618 204 731 (call or WhatsApp) or at john.hayward@spectrum-ifa.com

Is Financial Planning Different for Women?

By Spectrum IFA
This article is published on: 28th October 2019

28.10.19

In a recent global poll by UBS, they found that women are ‘acutely aware’ of their financial needs in the long term. The top three needs were identified as follows:

Retirement planning – 76%
Long term care – 72%
Insurance – 68%

Considering this, you would think that the figures would be similar for women taking the lead in managing their own long term financial planning; and you would be wrong. As, in the same report, only 23% took charge of long term financial planning, with 58% deferring to their spouse for criti-cal long term decisions.

Reading this report, I was not surprised. The majority of my clients are men or couples (where the man takes the lead on major financial decisions. However, he will defer to his wife for the house-hold budget), with single women (and I include those who are in relationships but not married) in the minority. The reasons for this range from the perceived understanding that men typically know more about investing, to women thinking they are bad investors. Let me tell you this, some of my best clients are women, as they are less likely to want to sell underperforming funds than men, and therefore are more likely to take advantage of compound interest.

Though it is easier said than done, women need to take a more active look at their own financial planning. The reasons being:

1. Women still live longer
On average, women tend to live four and a half years longer then men; this figure can widen when based on lifestyle and family history and therefore they have to put aside more for their retirement.

2. The earning gap
Whilst great steps have been made in shrinking the earnings gap in some fields, in other fields they have either stayed the same or even widening. Women are also more likely to work part time as well. This obviously means that women have less to put away for their retirement than men.

3. Career breaks
Women are more likely to take a career break than men – whether it is maternity leave or time off to take care of an elderly relative. The outcome is the same. Your earnings potential can be seve-rely affected.

4. Divorce
Regardless of what you may see in the media, on average, women are more severely impacted financially as a consequence of a divorce, than men. This may be a result of men either being the sole breadwinner, or earning significantly more than his wife.

5. Conservative Investors
When investing, women are more risk averse on what they do invest, than men. Potentially mis-sing out of greater gains.

6. Involvement in Financial Decisions
Research shows that when women are involved in financial decisions, 91% report that they are less stressed about their finances and an even larger amount report that less mistakes are made.

Clearly, having the confidence to speak to either your partner or a financial adviser about your fi-nancial planning can greatly alleviate the stress and confusing options that are ahead of you.

To discuss further how to start your financial planning, please contact me either by email emeka.ajogbe@spectrum-ifa.com or phone: +32 494 90 71 72 to arrange a no obligation meeting

Professional Women’s Network – Cote d’Azur

By Lorraine Chekir
This article is published on: 25th October 2019

25.10.19

How Can We Make The Most From Our Money

PWN Nice Cote d’Azur is pleased to invite you to the event organised
with our partner EDHEC Business School:

Wednesday, November 6th

18.30 – 20.00 EDHEC Business School Campus, Nice.

Lorraine Chekir is the Treasurer for the Nice branch of the PWN and an International Financial Advisor with The Spectrum IFA Group, for the English speaking community on the Cote d’Azur and Var region. She helps and advises people on how to plan their investments and retirement planning tax efficiently based on their individual circumstances.

Lorraine will introduce the event and give a short introduction on the basics of financial planning. This will give you the basic tools on how to plan your finances in the most efficient, cost effective way to help grow your money for both your immediate, medium and longer term future.

Lorraine will introduce her two guest presenters, Holly Merriman and Harriette Collings who will cover the topics of:

Women Investing – why you should and how it can benefit you
The Investment Gap – what is it, how does it affect you and what can you do about it
The Pension Gap – Why does it exist, what changes you can make to Close your gap
Macro Economics – which will give an overview of the behavior and performance of the economy as whole and how this affects you and society as a whole

Everyone will have the opportunity to ask questions at the end of the presentations or a more private chat over a drink at the end.

This event is 15€ for PWN Members, 35€ for non-members, and Free to all EDHEC students. EDHEC students, please email Carmen at membership@pwnnice.net for your discount code.

We look forward to seeing you and learning with you on the 6th of November.

Holly Merriman
Tilney Group

Harriette Collings
Tilney Group

Lorraine Chekir
The Spectrum IFA Group

Is this the time to invest and where?

By Charles Hutchinson
This article is published on: 23rd October 2019

I was having lunch with a friend of many years the other day. When I asked why he was not currently invested and why he had not been for some time, he replied that it is too dangerous a time in the world with too many problems and that we were on the verge of a global market collapse. Further investigation revealed that he had had his money in the bank, largely unprotected against bank failure and earning less than a single digit interest rate (and that was for his Sterling) which was also taxed. What made it worse was that the majority of it is in Euros and he was actually having to pay charges to the bank for the privilege of keeping it there.

Although this sounds an extreme example of bad financial planning, it shows that we need to take professional advice sometimes. We need to diversify and we need to understand that the world is no worse or insecure than during the terrible wars and crises of the past. Money is not a Will o’ the Wisp, disappearing into thin air when not being utilised; it has to have a home in which to dwell for better or for worse. The secret, therefore, is to place it for the better in homes that are largely secure, allowing you to diversify smaller amounts somewhere else for better returns. In this era of low interest rates, which is set to continue for quite a while, that home should not be in a bank, except for your current account and a cash reserve for emergencies and planned spending over the next, say, 2-3 years. There is limited protection against bank failure and the return to be obtained is taxable and insignificant.

My old friend lamented that this was not the time to enter the market, to which I replied that there is no good time until you have left it too late (this is true of most markets). It is not market timing which is important, but time in the market. Unless you have a trading account for speculative investment, you must always plan to invest for the long term (5 years plus). The investment house Fidelity produced some excellent statistics which showed that (once invested) by not being in the market for just 10 specific days in the last 10 years, you would have lost nearly 50% of the market (London FTSE100) growth each year versus staying fully invested. Missing 20 days, this would have been halved again.

Missing out on 30 days, you wouldn’t have broken even after brokerage charges. Markets are like the tide on the sea shore – they rise and they fall. The difference is that each time the tide comes in, it reaches a little higher up the beach. And that is caused by a natural phenomenon called inflation, which moves hand in hand with growth

I asked my friend if he was invested in 1987. He looked away gloomily and said that he had instructed his broker to sell out all his positions when the October crash arrived that terrible Monday morning. He watched with dismay as the markets around the world collapsed as soon as they opened and there were no buyers, fuelled by a flawed computer system over which there was no control. He lost over 35% of his capital over the next four days. At the time I was a trainee investment manager on the Australian desk of a prominent investment house in the City. The telephones rang off the hook and our advice was emphatic and simple: do not bale out. Hang in there. I remember my mentor, who was a keen yachtsman, saying, “If you are in a boat out at sea and a big storm blows up, you don’t jump overboard, do you? No. you batten down the hatches and wait it out”. This is the advice I have always given my clients ever since. Those who heeded our advice and waited it out actually ended that year in a higher position than when it started.

I can hear some readers already asking where they should place their hard earned capital after a life time of working and saving. There is no one single answer to this. It depends on your risk tolerance, your likes, and your needs (now and in the future). As ably described in our book “A Guide to Investment Risk” by Peter Brooke (opposite), diversification is everything.

This could be across multiple global asset classes (to include gold bullion, diamonds, antiques, rare paintings, rare books, classic cars, etc.) or it could be an investment portfolio containing multi global assets managed by multi managers of different expertise and disciplines. It is always wise to remember that Risk is linked directly to Reward. The higher or lower each one is will reflect in the other. Also reflected is volatility, where the higher performing assets will mostly endure higher volatility (continuous high/low oscillations which are not for the faint hearted). When doing financial reviews with clients, we are careful to establish their risk appetite and the returns that can be expected taking into account that risk.

You cannot have a high performing low risk investment – there is no such animal. What you can expect from a good adviser is a steady performing investment at whatever level you set your tolerance to give you the return you want as long as you run the course, who does not try to time the market and who picks long established names who have been around many years. We often recommend long established (each over 150 years) London based investment managers to manage a client’s private portfolio, or we place clients in multi asset, multi manager investment funds. To those who are averse to volatility, we offer “smoothed” investments which are described by my colleague Anthony Poole elsewhere in this website in “Tax Efficient Investments“. These are safe secure investments which are tax efficient and which produce a steady return year after year, way above anything you can expect from a bank product.

Greed is the enemy of many investors. It is the curse of humanity. If you are not greedy, your money will grow securely at a respectable pace. Manage your own expectations – do not alter course when you see your returns are doing well. Do not cut corners, especially with tax. We only choose tax efficient products. Investment choice and tax efficiency are completely entwined. Tax is another subject to be explored in more detail and is covered elsewhere on this site by my colleagues. If you would like a copy of our Spanish Tax Guide 2019 (there is also one available for France), please contact me below.

To discuss these points in more detail, why not call me to make an appointment and let’s have a coffee together? Please remember, there is no commitment on your part but such a huge commitment on ours! With care, you will prosper.

Understanding the Taxe Foncière

By Katriona Murray-Platon
This article is published on: 19th October 2019

19.10.19

As the last quarter of the year approaches, there is one thing that is certain and that is that taxes are due. In September the final instalment of the income tax must be paid, in October the Taxe Foncière is due and in November the Taxe d’Habitation must be paid.

Taxe Foncière is a tax paid by property owners on the 1st January of each tax year. Note that it is paid by the owner not the occupant and applies to both buildings (houses or apartments) and land (agricultural or constructible).

If you sell your property or land, the tax liability for that year is apportioned to each party, by the notary, according to the timing of the sale.

You may qualify for an exemption if:

- the property is a new construction used as a main residence (the exemption is for 2 years)
- you are in receipt of disability allowance
- you are in receipt of old age allowance
- you are over 75 (depending on level of income)

The tax office may also allow an exemption for unoccupied property which is habitable and normally rented, provided that:

- it is unintentionally unoccupied
- it is unoccupied for at least 3 months
- part or all of the building is unoccupied

However, as the tax reduction is not automatically granted, you have to apply for it and demonstrate that you qualify (with reference to the specific points above).

Taxe Foncière is based on rental value according to the land registry multiplied by a rate set by the local authorities – so rates differ depending on where the property is situated and from one year to the next.

Any building on your property that is a permanent fixture could result in an increase of your Taxe Foncière. If you install a swimming pool (sunk or semi-sunk) then this could increase your Taxe Foncière. You have 90 days to declare to the tax offices that you have installed a swimming pool but you could also be exempt from paying the Taxe Foncière for the first 2 years.

The tax office sometimes makes mistakes when calculating Taxe Foncière liabilities, in which case you should contact your local office to ask for an explanation and rebate. You have until the 31st December 2019 to challenge your 2018 calculation. Additionally, the tax office sometimes doesn’t apply exemptions for which you qualify.

You can contact the tax office via your online account on the impots.gouv.fr website or by email or letter sent by recorded post.

Paying your taxe foncière monthly spreads the costs throughout the year. You have to settle in full by the middle of October, so if you do pay monthly and the amount hasn’t changed this year, you will have nothing to pay in November and December.

The Changing Financial World

By Alan Watson
This article is published on: 18th October 2019

18.10.19

It was December 15th 1996; my wife and I were happy to be in Morzine and were enjoying dinner at hotel Les Airelles. Jean-Claude, the owner, was very attentive – we were his only guests! Heavy snow was falling, so the drive back to our home in Le Biot was a slow one, spotting just one other vehicle parked suspiciously in St Jean D’Aulps, the Gendarmes, who looked bemused that a Dutch plated car should mess up the untouched snow cover.

During Christmas I worked as usual in my IFA business covering Europe, but it was a stress free time; international clients had little to bother them, the main concern being market direction. The FCA did not exist; tax people were only after the big fish; even the Financial Ombudsman, for complaints, was years from formation; regulation was unheard of; QROPS transfers were an age away. The Isle of Man, Guernsey, Jersey, and of course Switzerland were the favourite hiding centres. Clients were happy to deposit large sums resulting from their global company contracts. Banks happily took in and paid out in cash, accepted transfers from third parties, and asked minimal questions to new arrivals in the beautiful French Alps; they were simply hungry for this amazing new flow of business. The financial world was a relaxed place, where large sums of “tax free” money could be transferred to the Notaries, who would inform the local land sellers that they had become wealthy; keys were given, dreams were realised and that much expanded supermarket just out of town saw the wine shelves emptying like never before. Travel businesses sprung up with sexy names like, “Utah snow and sun”, and their chalets were full the whole winter. The French tax people started to scratch their heads. Not only were local people driving back and forth through the Swiss border every day, but now a new irritation had arrived in town and some serious checking was necessary. The French Fisc. suddenly had many more employees, serious computer power, and somebody could apparently speak ENGLISH !

It’s now October 2019, my wife and I still love to eat in Morzine, but things have changed. Conversations with my clients all over the Rhone Alpes region take on a very different and focused tone. A global directive of information exchange requirements has shaken up the old world called CRS, “Common Reporting Standard”, which means the UK will exchange all financial, bank account, insurance policy and investment account information with France. Even that renowned haven of Swiss Private Bankers are happy to flood Europe’s tax offices with full financial disclosure information on former residents and clients. If that’s not enough, I regularly hear of clients being pestered by cold calling IFAs based in Paris, the south of France, even Dubai. The pleasure of being seen on social media! But now the approach is somewhat different, we have tight European regulation, or do we?

Making life changing investment decisions is a delicate operation. If somebody tells you they are part of XX group in Gibraltar, but due to “flexible” European financial regulation, they can passport, operate in France – beware: if things go wrong the UK, FCA or French regulator Orias will be unable to help you. A fully regulated French company holds the correct licenses and your chosen adviser should know French rules and regulations, preferably from many years experience in the region. Some individuals choose to keep a leg in the old country, just in case, but this half-half decision could cost you dearly. “Is a UK ISA tax efficient in France?” “My money is 100% Sterling, so impossible to move it over here.”

Your chosen IFA should know a great deal. Test their knowledge on markets, tax issues, currency movements/history, inheritance. Can they introduce you to competent local professionals? Moving from one country to another is a big step. Do make sure all fits into place, you should enjoy this wonderful region for years to come.

How to invest – Multi-asset Funds – Investing Made Simpler

By Spectrum IFA
This article is published on: 16th October 2019

I have spoken about asset allocation and rebalancing and their affect on your investments. An-other strategy that is available to you is multi asset fund management.

You may have heard (read) that I have mentioned that here at The Spectrum IFA Group, we favour the ‘multi asset fund’ route of investing. But, what is that?

Multi asset funds provide you with access to multiple funds and asset classes through a single fund, managed and monitored by dedicated experts on your behalf. This type of fund can increase the potential for diversification and help reduce the overall level of risk.

Choosing the right funds and building a diversified portfolio can be extremely difficult. The options available to you are almost limitless, with tens of thousands available to investors in Europe alone.

Generally speaking, it is highly unlikely that a single fund manager is capable of delivering consis-tent outperformance, year on year. Making the right choice for a portfolio and then refining it and rebalancing it over the years takes time, information and skill. Therefore, fund managers need to be monitored to ensure they remain at the top of their game – and replaced when they are not. The resources and/or expertise to do this properly can be time consuming and expensive. There-fore, multi asset funds can play a valuable role in part or all of your investments.

All multi asset funds offer a convenient way to access a wide range of fund managers and asset classes. Spreading investments across a wide range of managers and assets reduces the proba-bility of a fall in value across the whole portfolio.

At the same time, multi asset funds that are designed to target different risk levels make it simple to adapt a portfolio to suit your changing circumstances. For example, if you have no need to ac-cess your savings any time soon, then you are likely to be able to take more risk than clients who are nearing the time when they do need to access their money.

Acheter un appartement à Barcelone : bonne ou mauvaise idée ?

By Cedric Privat
This article is published on: 15th October 2019

15.10.19

Vous êtes nombreux à vous poser la question du choix entre l’investissement immobilier et le placement financier, dans l’objectif de faire croître votre patrimoine.

Investir dans la pierre est souvent considéré comme une valeur sure, mais est-ce toujours le cas malgré la flambée des prix des dernières années?
Faire un placement financier permet de conserver une liquidité et bénéficier d’une imposition avantageuse, mais avec les taux fixes au plus bas et l’inflation actuelle il est désormais impératif de prendre un certain risque

Avant toute décision, il sera important de comprendre les avantages et inconvénients de ces deux options. Nous étudierons dans un premier temps via cet article l’achat immobilier à Barcelone.

Depuis les jeux olympiques de 1992, Barcelone est devenue une des villes les plus attractives d’Europe: à visiter, y vivre, y travailler et pourquoi pas investir?
La ville plaît beaucoup aux français, plus de 20 000 d’entre eux y vivent toute l’année et on ne compte plus les milliers de touristes quotidiens qui affluent de toutes parts.

À seulement 150 km de la frontière, la ville attire par son soleil, ses plages, ses montagnes proches, sa qualité de vie, sa culture, sa population cosmopolite, sa bonne connexion TGV/avion, etc.
Cet engouement comporte néanmoins certains revers dont tout futur investisseur doit tenir compte; notamment une insécurité croissante ces dernières années, une situation politique instable et des lois souvent en faveur du locataire (voir même okupas/squatteurs) en cas de conflit avec le propriétaire. La crise du marché immobilier de 2008 a également inquiété de nombreux particuliers projetant un achat à Barcelone.

Première question: achat perso (pour y vivre) ou achat locatif ?

Si vous comptez rester à Barcelone pour le long terme, un achat personnel s’avère souvent être la meilleure solution. Finis les loyers, vous serez enfin chez vous et pourrez potentiellement faire une plus-value si vous gardez ce bien assez longtemps. Mais attention au marché en haut de cycle; des études démontrent qu’actuellement une acquisition ne sera financièrement avantageuse par rapport à une location que si on garde le bien au moins 10 ans. Une revente rapide sera synonyme de moins-value; une stabilité professionnelle et familiale est donc indispensable
Pour un achat locatif vous devrez dans un premier temps évaluer le taux de rentabilité brut (diviser le revenu locatif annuel par le prix total du bien), si le résultat est inférieur à 6 % brut alors le rendement n’est pas suffisant (voir le paragraphe “Les coûts” ci-dessous pour avoir une estimation du résultat net). Aucun achat ne doit être fait sans une étude et un calcul précis

Il sera important de ne pas diaboliser le fait de rester en location. L’expression “jeter ses loyers par la fenêtre” est dépassée car nombreuses villes se sont avérées à une certaine période être plus rentables en location qu’à l’achat. Vous gardez ainsi votre liberté, vivez dans une superficie plus grande et n’avez pas à supporter les coûts et impôts d’un propriétaire. Nous aspirons pour la plupart à être propriétaire un jour, attention néanmoins à ne pas se précipiter.

La situation du marché ?
Le prix du marché doit ensuite être étudié, il vaut bien entendu toujours mieux acheter quand les prix sont bas.

Le marché à Barcelone est haut même s’il n’a pas encore atteint les chiffres de 2007, les prévisions annoncent une stabilité pour 2019/2020.

Crédit bancaire en Espagne: comment ça marche ?
Si vous êtes résident fiscal en Espagne vous devrez certainement passer par une banque locale pour votre prêt (peu de banques françaises vous accompagneront, à moins d’avoir un bien en France).

Un maximum de 80 % du prix du bien peut vous être prêté (70 % si non-résident), pour une durée maximum de 30 ans (jusqu’à l’âge limite de 70 ans). Il vous faudra donc un apport de 20 %.

Les espagnols sont habitués aux taux variables (très faibles ces dernières années), ce qui signifie que vous êtes dépendants de l’Euribor (taux de référence du marché monétaire de la zone euro), mais en cas de hausse de celui-ci vous risqueriez de voir vos mensualités fortement augmenter. Nombreux sont ceux qui ont perdu leur bien pour cette raison il y a 10 ans.

Depuis quelques années les banques espagnoles proposent de plus en plus un taux fixe comme le font le plus souvent les banques françaises. Vos mensualités resteront donc inchangées sur l’ensemble de votre prêt bancaire. Les taux sont plus élevés qu’en France, actuellement comptez entre 2.2 et 2.7 % pour un prêt sur 30 ans en Espagne

Quels sont les coûts ?
L’imposition sur un achat immobilier en Catalogne s’élève à 10 % du prix d’achat (11 % à partir de € 1 million). À cela s’ajoute les frais de notaire et frais divers liés à l’achat: comptez entre 3 et 4 %.

Comme évoqué précédemment, un apport de 20 % étant demandé par les banques en Espagne, l’apport global nécessaire est donc de 34 %.

Cas pratique: pour un appartement vendu € 300 000: le nouveau propriétaire doit donc s’assurer de posséder une liquidité de € 102 000 (impôt € 42 000 et apport € 60 000).

Être propriétaire vous impose également des coûts annuels qui viennent s’ajouter à vos mensualités bancaires:

IBI (Impuesto sobre Bienes Inmuebles), équivalent de la taxe foncière française
Assurances et impôts divers (tels ordures ménagères)
Charges de copropriété
Travaux d’entretien, maintenance, remplacement des gros équipements, rénovation (votés lors des réunions de copropriété ou obligatoire telle la rénovation énergétique)
Si vous louez ce bien, vous devrez éventuellement ajouter les frais d’agence (surtout si vous n’habitez pas à Barcelone) et le coût lorsque l’appartement n’est pas loué. Sans vouloir être négatif; il ne faut pas occulter les éventuels frais de justice ou d’expulsion si vos locataires s’avèrent être mauvais payeurs ou insolvables.
Et bien entendu le coût d’un prêt bancaire qui varie selon le coût d’achat, les années et le taux négocié
Concrètement, en s’appuyant sur l’exemple ci-dessus, l’achat d’un bien de € 300 000, le prêt sollicité sera de € 240 000 (maximum 80 %)
Supposons que la banque vous accorde un taux fixe sur 30 ans à 2.5 %, vos mensualités s’élèveront alors à € 948.29 soit un remboursement total de € 341 384.
La banque vous facturera donc € 101 384 pour un prêt de € 240 000

En conclusion, il n’y a pas de réponse évidente à la question: “Acheter un appartement à Barcelone : bonne ou mauvaise idée?” car l’équation a souvent plusieurs inconnues et de nombreux paramètres sont à prendre en compte. Acquérir un bien immobilier est une décision importante, un engagement, qui peut correspondre parfaitement à certains particuliers, mais peut vite devenir un gouffre économique pour d’autres.

Comme toute décision importante il est indispensable de planifier, calculer et comparer les options disponibles. L’immobilier a constitué un excellent investissement pour la génération des baby boomers, mais il ne doit pas être une obligation ni une logique. Obtenir une plus-value n’est plus systématique et comme tout investissement un achat immobilier implique un risque: rien n’est garanti (“sauf la mort et les impôts” disait Benjamin Franklin).

Spectrum conseille à ses clients de toujours diversifier leurs investissements et garder un équilibre dans son patrimoine entre l’achat immobilier et le placement financier. Des alternatives d’investissement existent en France et en Espagne telles l’assurance-vie (2ème placement préféré des Français après l’immobilier) ou les SCPI (Société Civile en Placement Immobilier).

Nous nous proposons de vous guider en nous adaptant à votre situation, chiffrer les différentes alternatives et vous présenter l’ensemble des options disponibles sur le marché.

En Espagne comme en France, Spectrum possède également une section “courtier en prêt immobilier”. A votre demande, nos conseillers sont à votre disposition pour effectuer les recherches nécessaires auprès des banques. Ils sauront vous guider, négocier en votre nom et vous permettre d’obtenir un meilleur taux à moindre coût sans frais de remboursement anticipé.

N’hésitez pas à me contacter. En tant que consultant chez Spectrum, je me tiens à votre entière disposition pour étudier toutes demandes ou répondre à vos questions.

Inheritance Tax in Catalonia

By Chris Burke
This article is published on: 11th October 2019

11.10.19

*There have been recent updates of 1st January 2020 – please click here for the new rates

In the circle of life, it’s an unfortunate occurrence that parents or relatives pass on from this world we live in and leave an inheritance, whether that is property, money, investments or other assets. The value of this inheritance may or may not be the kind you are used to having or looking after, and that is where we/ I come in, to make sure this your inheritance is safe and looked after, taking into account your life situation both now, and in the future.

How is this inheritance taxed in Catalonia though? I hear many stories or ideas among people I meet but no one seems to know for sure, or get it right anyway. One of the reasons for this is that it depends on where the money comes from, i.e. which country and what asset is being received. Many of my clients are from the UK, how does it also work there? In the UK it is usually very simple, if someone dies being resident in the UK and leaves you assets up to £325,000,there is usually no Inheritance Tax (Paid by the estate); anything over this is taxed at 40%. However, in Catalonia it is not that simple (Surprise surprise, I hear you say!) and alongside what is declared and maybe tax payable in the UK, you must also declare and pay the relevant tax here

Firstly, Inheritance tax in Catalunya is paid for by the receive, not the estate, and very importantly, you have 6 months to declare this inheritance, EVEN if you haven’t received it yet (this is from the date of decease) or you will be fined the following way, on the amount of tax you are liable to pay:

5% in the following 3 months (i.e. months 6-9 since death)
10% from 3 months to 6 months
15% from 6 months to 12 months
20% plus interests after 12 months

The good news is that there are discounts on inheritance tax in Catalonia, and most people are surprised by the amount of tax they have to pay, in a good way. To start with, there is usually no tax to pay on the first €100,000 being received if you are a child or spouse of the deceased. If you are a parent of the deceased, the allowance is €30,000 and any other relative receives a €50,000 nil tax amount including grandchildren.

From this point on, there are further reductions between 97-99% and there are also other factors to be taken into account, such as are the children under 21, disabled or if from a family business. The quickest and simplest way, I feel, to give you an idea of what tax you would pay is if I use the most common example, of a parent living outside of Spain, leaving their child whom is living in Catalonia an amount of money/asset not including property (there would potentially be extra tax deductions for receiving this):

Example (guideline) of someone tax resident in Catalonia, inheriting from a parent in the UK:

Amount to be inherited	Tax due in Catalonia
€100,000	€0
€250,000	€383.82
€500,000	€4,300.05
€750,000	€16,866.68
€1,000,000	€40,473.29

These are approximate and we always suggest getting in touch to confirm exactly what the amount would be, and for help declaring it. For the assets themselves, it is worth knowing that many assets overseas are not always efficient to have while living in Catalonia. For example, investments or Isas in the UK are declarable and tax payable on any gain in Spain annually, EVEN if you do not take any of the money, unlike in the UK. This is where we help our clients to get organised efficiently and manage the assets if needed.

If you have any questions relating to any of these points, or anything similar, don’t hesitate to get in touch.

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How to invest – Rebalance Your Investments

By Spectrum IFA
This article is published on: 9th October 2019

09.10.19

I previously discussed how asset allocation is an investment strategy that can limit your exposure to risk. As you get further along your journey of being an investor, you need to understand how to rebalance your portfolio to keep it in line with your investment objectives.

Rebalancing is bringing your portfolio back to your original asset allocation mix. This may be necessary because over time, some of your investments may become out of alignment with your investment objectives. By rebalancing, you will ensure that your portfolio has not become overexposed to one asset class and you will return your portfolio to a comfortable and more acceptable level of risk.

For example, let’s say that your risk tolerance determined that equities should represent 60% of your portfolio. However, after recent market fluctuations, equities now represent 75% of your portfolio. To re-establish your original asset allocation mix, you will either need to sell some of your funds or invest in other asset classes.

There are three ways you can rebalance your portfolio:

1. You can sell investments where your holdings are overexposed and use the proceeds to buy investments for other asset classes. With this strategy, you are essentially taking the profits that you have made and reinvesting it into a more cautious fund.

2. You can buy new investments for other asset categories.

3. If you are continuing to add to your investments, you can alter your contributions so that more goes to the other asset classes until your portfolio is back into balance.

Before we rebalance your portfolio, we would consider whether the method of rebalancing we agree to use would entail transaction fees or tax consequences for you.

Depending on who you speak to, some financial experts advise rebalancing at regular intervals, such as every six or 12 months. Others would recommend rebalancing when your holdings of an asset class increase or decrease more than a certain preset percentage. In either case, rebalancing tends to work best when done on a relatively infrequent basis.

Shifting money away from an asset class when it is doing well in favour of an asset category that is doing poorly may not be easy. But it can be a wise move. By cutting back on current strong performers and adding more under performers, rebalancing forces you to buy low and sell high.

To discuss further how rebalancing can help your existing investments, please contact me either by email emeka.ajogbe@spectrum-ifa.com or phone: +32 494 90 71 72.