Mortgage Rates in Spain

By Spectrum IFA
This article is published on: 31st January 2020

31.01.20

At Spectrum International Mortgages we do an annual update on the rate development in Spain. We do this every year in February and this year will be no different.

As ever, the rates we mention are based on the market at the moment of publishing and we cannot guarantee that these rates will be available in the future, nor that they will be applicable to every individual case. Additionally, it is worth noticing that the banks in Spain still do not offer interest only mortgages, which means that both the fixed rate mortgages and variable rate mortgages are capital repayment loans.

Duration in years	rate in % (with correct client profile)
10	2.00
15	2.10
20	2.25
25	2.35
30	2.50

Looking at variable rates, we observe around 1.2-1.5%+EURIBOR

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As opposed to last year, we are now seeing that the Spanish banks have a bigger focus on financial profile rather than residential status. This means that although non-residents are still offered a lower LTV than residents, the fact that they are non-residents no longer has the same impact on rates, terms and conditions as it did last year around the same time.

The rates above are still so called “clean” rates, meaning that except for the first year, there are no other products from the bank attached. It is still normal practise for the banks to have clients set up e.g. different insurances, credit cards, investment funds or pension plans to decrease the rate. Arranging a mortgage through us, you will be able to avoid this in the vast majority of cases. Every case is handled individually and rates will vary depending on individual circumstances, but as a guideline, this is a realistic scenario for the moment.

How will that unfold for a mortgage of 280,000€?

To apply this in reality, let me provide you with an example of how a mortgage of 280,000€ could look when going through Spectrum International Mortgages:

Property price	400,00€
Mortgage amount	280?000€ (70%)
Duration in years	20
Fixed rate	2.25%
Monthly instalments	1,449.86€

Cash needed to complete the operation 168,000€ (30% down payment ->120,000€ plus approximately 12% taxes and costs -> 48,000€ = TOTAL of 168,000€

Products contracted for the first year: life and house insurance. After the first year both insurances can be cancelled with the bank and set up externally, which is normally advisable.

For more information, please contact our specialists in the mortgage team

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The Spectrum IFA Group Conference 2020 – Athens

By Gareth Horsfall
This article is published on: 28th January 2020

28.01.20

The Spectrum IFA Group Conference 2020 - Athens

This year The Spectrum IFA Group annual conference was held in Athens. I attended it from the 23rd to the 26th January. As usual we had 2 full days of conference and a little time to ourselves as well. The time to myself this year proved enlightening as you will see from the image above. This is 100% Greek graffiti. I happened to stumble across it during a lone walking tour early in the morning, not so far from the Roman Agorà. It certainly gave me a chuckle, but also give an insight into the mentality of a certain sector of Greek society (whoever they might be), although it’s no surprise given their ongoing economic malaise at the hands of the EU.

Graffiti aside, the conference was full of the usual morsels of information (some more controversial than others) flowing from the investment and financial sector, but we were also treated to some much more interesting information on a bigger theme which is more likely to have an impact on our lives and the way we invest in the future. In this E-zine I will touch on the morsels, and the big idea that is circulating in asset management circles.

So let’s start with the appetizers:

TRUMP

If you follow the news you will know that the impeachment of US President D. Trump is underway. Whilst it was felt that this is uninteresting for investment markets, what is stranger is the opinion that Trump has actually been good for the US economy, employment and corporate profits. This is indisputable regardless of your opinion on his moral values. I can recall a conversation I had with a female taxi driver in Rome just before Christmas who was also telling me something similar. She said that no matter what you think of him, he has pretty much lived up to the promises he made to the US voting public. Love him or loath him, does this mean he could be in for another term? We will find out later this year.

Conversely, the financial markets are much more concerned about a US future led by Bernie Sanders or Elizabeth Warren. This would likely lead to periods of big instability in the financial markets and in our investment portfolios. It begs the eternal question about morals versus money!

TRUMP'S TRADE WARS

Take no notice. They don’t matter. The fact that Trump can tweet about trade wars and the markets hardly take notice anymore just shows that the ongoing details of the trade spats between nations has little effect on our investments. Trade Wars will take 5-10 years to resolve and so have very little bearing on our investment objectives. However, this doesn’t mean to say that we shouldn’t be mindful of them, for example too much exposure to companies who are heavily invested into Chinese imports are potentially companies to avoid or have a minimal allocation to.

BREXIT

Most of you know my personal position on Brexit (I am a reluctant remainer, just to be clear!), but if you are an ardent remainer you may not wish to read on.

The financial marketeers feel that the general election result for Sig.Boris will bring a period of stability to the UK. Most of the asset managers said that they had been increasing their allocation to UK companies significantly since the vote. They are also expecting to see that he will have to follow through on a number of election pledges which could mean massive infrastructure investment and a lot more spending. This will create big opportunities for UK companies as they fall out of the EU.

US companies are also very positive about the UK’s prospects (quelle surprise!). To give you an example, the UK market is the third most important for Estee Lauder, the cosmetics firm, behind the USA, NO 1 and China NO 2. They are keen to invest and grow in the UK, despite Brexit.

And for all the talk of companies upping and offing to the EU, in reality companies such as Packard UK will maintain their base in the UK, but also open EU operations to ensure continuinity across their EU markets.

THE EU

The big question for the EU is who is going to pay the bills moving forward? When the UK leaves the EU it will leave a massive funding gap and smaller less economically prosperous countries will have to fill the gap. How will this work and is it a sustainable model? Only time will tell.

WHATS THE BIG IDEA?

It may not surprise you to know that the big theme to this years conference was ESG investing. You may be wondering what that is? It stands for Environment / Social / Governance investing. We should also add healthcare into the mix. But, this is generally known as ethical investing, sustainable investing, environmentally friendly investing, green investing, or any number of other terms. But one thing is clear. This is BIG and it’s here to stay.

This is going to be a theme that is everywhere. There is not one person that I talk to who is not worried about the amount of plastic they use, or the slow pace of adoption into circular recycling and a society based on renewables rather than throwaways.

But it’s coming, and expect the pace to pick up. The general consensus of opinion was that any business or sector that fails to adopt, or adapt to the challenges we face in the coming years will very likely go out of business. Consumers are being selective about who they do business with and are making choices based on how company policy sits with their personal views. Equally investment managers have realised this trend are are also aligning their asset management styles with those of their customers, because they can see that prospective investors will avoid investments based on how they match with their ethical views. This in itself could be the biggest catalyst for change that we see. Asset managers are the worlds largest allocators of capital in the world: investment funds, pensions funds, sovereign investment funds etc and now they are starting to look at not just where they place money, but question why they do it. This could be the catalyst we see for real change.

Let’s talk of some examples where real change is taking place:

PUTTING THE CUSTOMER AND EMPLOYEE FIRST

Consumers and employees are the real capital of any business. Maximizing shareholder returns is now under the spotlight. People are making choices based on how businesses treat their customers and also their employees. Happy employees make for higher profits and more prosperous businesses. To give you an example, I rarely fly Ryanair anymore ( unless I am forced to do so). I struggle with their budget approach to customer service and lack of employee care.

Similarly there is a company in the US called Clorox. They make a range of household cleaning and consumer goods. They recently embarked on a cost cutting exercise and looked to reduce the administration budget by 10% with the introduction of new technology and artificial intelligence into their business. That would normally mean a cull of 10% of the admin workforce but rather than make them redundant Clorox chose to re-employ them into more innovative jobs and to use the human capital in a more productive way. In this way they are being seen as a company with a social conscious and become more investable.

TAX

PLASTIC AND ENVIRONMENTAL IMPACT

I touched on the company Estee Lauder above, but they are also worth mentioning in terms of their record on plastic reduction and environmental impact. 18 months ago Estee Lauder had no view on plastic in their business or the environmental impact of their business on the world. Today they have a permanent board member responsible for monitoring and exploring every aspect of their ESG footprint ( Environmental / Social / Governance) and they have made the decision to move all their plastic products to glass containers.

We can also talk about Rentokil. Not a company with the best ‘green credentials given its use of chemicals and record on non-humane disposal of pest animals. But, Rentokil have understood the changing trends of consumers and the CEO has put in place a process to find 100% non toxic chemicals to eradicate pests. He also wants to find humane solutions for the treatment and disposal of pest animals and insects. However, this comes at a price and typically it costs 3 times more for these solutions…is the customer ready to pay this price yet? This is the kind of journey that a company like Rentokil has to monitor and adapt to.

SOCIAL ASPECT

The social aspect of investing has also become a prominent factor in a company’s’ investability. This may have less environmental credentials, but the investors are now looking at products where companies have taken time to consider the true purpose of a product and alter it accordingly.

To explain this we can use the example of the US households goods company Clorox again. They have a wholly owned subsidiary of the business which is a charcoal maker in the USA and has a market share of approximately 50% share of the entire US charcoal market.

A few years ago they asked themselves, What is the purpose of charcoal? One might say it is for cooking, heating, etc. But they found that its purpose is to facilitate social gatherings. The biggest users of charcoal in the USA are age 25 and under. Charcoal’s primary purpose is social gatherings for millenials. So, Clorox conducted research and found that most people have a beer when they BBQ and that it takes, on average, 13 mins to drink. They went away and adjusted their charcoal recipe so that it came to the optimum cooking temperature after 15 minutes. Sales have rocketed. They showed that they were thinking more about the reason for their product and adjusting it to their clients needs and tastes.

Lastly, let’s take a look at the:

HEALTHCARE SECTOR

and then a short word of warning

The world is aging rapidly and countries around the world are going to have to adapt to older populations. The Italian healthservice, the NHS and many other governmental run health services are going to struggle to cope with the demands from an increasing number of patients in the next 10 years. Technological solutions will be required to meet these needs and these solutions are coming. Innovation is happening: robots and artificial intelligence are already taking the place of surgeons and are proving, in a lot of cases, better than human doctors at performing basic operations. Virtual reality is also a development which might mean a doctor can work in many places at the same time.

An example of a company spearheading development in this area would be the Smith and Nephew, leaders in global medical technology. They have developed wound dressings that can last for 3 or 4 days and notify the nurses when they need changing. This is time saving for nurses to concentrate their time on more important and potentially more urgent matters.

This is just one example, but one where rapid change is already taking place.

And lastly a word of warning: BUBBLES

Like any trend, but especially investing trends, they can find momentum and then become ‘too’ popular. This could also be the case with ethical investing. It has seen massive interest in the last 12 months and whilst it is recognised that these trends are here to stay, because consumer behaviour is changing, it could create bubbles in investment markets. So, whilst it is impossible to say right now what will happen, it is not outside the realm of possibility in the next couple of years that these trends start to take hold and more and more people pile into this sector.

However, you can avoid the worst of this, even if you want to be a part of it. Simply avoid anything too good to be true, don’t invest in anything without a track record, use professionals to guide you and avoid investments that merely have a trendy sounding name without doing some research first.

Change is coming, and probably faster than we might think.

Inheritance Tax in Catalonia

By Chris Burke
This article is published on: 27th January 2020

With all that has been happening this year, it could well have slipped many people by that significant changes have been made to the inheritance laws in Catalonia, particularly for those who are resident there and receiving an inheritance from someone outside of Catalonia.

Previously, spouses and descendants received great allowances in respect of tax due to be paid, starting from 99%. However, for those receiving inheritance as a descendant this has been reduced, at the worst to only a 60% reduction. This raises two main questions, firstly, what would the tax payable be for an inheritance, and secondly, is there a better way to receive this, for example, as a gift rather than an inheritance, which itself has different tax rates?

It is important to understand how an inheritance is taxed in Catalonia. Major factors are the relationship between the deceased and the inheritor, what asset is being received and where the money comes from, i.e. which country. In the UK it is fairly straightforward: 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 may be tax payable in the UK, you must also declare and pay the relevant tax in Catalonia. Any assets you already own can also be taken into the equation of what tax is payable.

Inheritance tax in Catalonia is paid for by the receiver, 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

But if you know that you will need more time you can ask for an extension of an additional 6 months during the first 5 months from the death. In this case, the surcharges described above will not be applicable and you will have an extra period of 6 months.

There are some discounts on inheritance tax in Catalonia. To start with, there is usually no tax to pay on the first €100,000 being received if you are a spouse or child of the deceased. For other descendants the allowance is €50,000. If you are an ascendant the allowance is €30,000 and for any other relation the reduction is €8,000.

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 you receive the main home (“vivienda habitual”), family business or shares in certain type of companies.

As you can see, the calculation is not straightforward. The quickest and simplest way, I feel, to give you an idea of what tax you would pay is if I give examples using the most typical scenario of people we help, which is of a parent resident in the UK leaving their child, who is living in Catalonia, an amount of money/assets not including property (as we said there would potentially be extra tax deductions for receiving this). The guidelines are shown below for someone tax resident in Catalonia, over 21 years old, owning assets themselves of less than €500,000. Note that the ‘domestic trousseau’ has also been included (the domestic trousseau is a tax on inherited household items, for example furniture, by default calculated as 3% the estate value):

Amount to be inherited	Tax due in Catalonia
€100,000	€84
€250,000	€6,969
€500,000	€29,888
€750,000	€64,908
€1,000,000	€109,297

One possibility we would check for a client is whether it would it be better to plan the future inheritance and anticipate it, receiving the monies through a donation that is taxed between 5% and 9% between parents and their children (with some specific requirements). Additionally, please note that if a previous donation has been made, this must also be considered in order to calculate the effective inheritance tax rate. 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 is payable in Spain on any gain annually, EVEN if you do not take any of the money, unlike in the UK. It is possible to have these monies in a Spanish compliant structure, still in sterling if you prefer, where you can benefit from the money growing through compounding and potentially greatly mitigating tax. This is where we help our clients to get organised efficiently and can manage the assets if needed.

If you have any questions relating to this article, would like help planning for this eventuality, or anything similar, don’t hesitate to get in touch.

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TAXATION UPDATE IN SPAIN

By Charles Hutchinson
This article is published on: 16th January 2020

16.01.20

We now have a new government here in Spain, albeit quite far to the left which could cause some more interesting changes in taxation. Watch this space.

WEALTH TAX
So far, the reinstatement of the 100% allowance for Wealth Tax (which was approved in 2011) has been delayed again for one more year as part of the 2018 budget extension, due to the recent era of no federal government being in place. Nor has the Junta de Andalucia made any moves to reinstate the allowance in the 2020 budget either.

MODEL 720 DECLARATION OF FOREIGN ASSETS
On the 23rd October 2019, the EU Commission filed a complaint in the European Court of Justice to the effect that Spain has not complied with the Commission’s findings in November 2015 namely that Modelo 720 deters businesses and private individuals from investing or moving across borders in the Single Market. Also these provisions are in conflict with the fundamental freedoms in the EU; this conflict affects free movements of persons, free movement of workers, freedom of establishment, freedom to provide services and the free movement of capital.

Furthermore, the Commission has claimed that by introducing late filing penalties and the labeling of these foreign assets as unjustified capital gains (which are not subject to the statute of limitations), it has breached EU law. Additionally, whatever the amounts involved, they are all subject to tax at the top marginal rate (45% in 2012) plus a fixed penalty of 150% in addition to the tax and further fixed penalties for failure to file, which are higher than the general rules on similar infringements. Spain, therefore, is liable to comply with EU law and to pay costs.

Although precedence does not exist in Roman law, a precedent was set in 2011 when the EU successfully prosecuted Spain over discriminatory Inheritance and Gift Tax rules. This ended with a Court resolution in 2014 that led to an amendment in Spanish Law and opened the door for reclaims of taxes paid over the previous 4 years.

The issue of the Declaration continues to be of great concern to many people in Spain, particularly the expatriate community. Some of the most vulnerable assets are foreign bank accounts. These can be easily switched into other foreign assets where reporting under Modelo 720 is not required and the taxation of income from them (if taken) is greatly reduced.

If you have concerns in this area, please contact me where I can assist you with the problem.

Source: JC&A Abagados, Marbella

Why should I review my finances

By Amanda Johnson
This article is published on: 14th January 2020

14.01.20

Very little has changed in my life during the last 12-18 months; why should I review my finances?

When and how often you should review your financial position is a question I often get asked by people attending my financial surgeries. There are several questions which I feel are important to consider when looking at whether you are due for a financial review:

When did you last sit down and fully review your finances?
If you have not had a review for 12 months or more, you may not be aware of legislation changes or new opportunities which may be open to you.

Have your personal plans and aspirations changed since your last review?
Are you now looking at retirement closer or wish to look in more detail at inheritance planning? Perhaps you are looking at downsizing and want to make any surplus monies work efficiently for you?

How are any investments or savings you hold performing against your expectations?
When you took out an investment or savings plan, it is likely you looked at how they had performed, and this past performance made a sizable contribution to your choices. That information is now out of date and replaced by more recent information. Reviewing this new data is vital in ensuring your money is still working for you to its best ability.

Just because your last year feels standard, you should not underestimate how external factors can influence your financial security and your ability to make the best use of any money you have worked hard to earn.

Whether you want to register for our newsletter, attend one of our road shows or speak to me directly, please call or email me on the contacts below & I will be glad to help you. We do not charge for reviews, reports or recommendations we provide.

Financial Planning for Business Owners in Barcelona

By Barry Davys
This article is published on: 8th January 2020

08.01.20

This is the first in a series of three articles on the challenges of financial planning in your personal life when you own a business or are a significant shareholder in a business. This first article is planning when starting a business. The next article covers planning when you have an established business. The final article, the one we all want, goes through what happens when you sell the business and find yourself cash rich.

When starting a business, it is the business that gets the attention and often your personal, non-business, financial position is left unplanned. I would recommend at this stage you do prioritise the business as if it goes well, your business is likely to be the driver of your wealth. It should certainly grow your wealth quicker than investing in funds, shares, etc. It will probably make you wealthier than investing in Bitcoin!

Making your business the priority, however, does not mean that you can completely ignore your personal finances or manage them on a “when I get round to it” basis. Owning a business means it is very important to do your own personal planning because success can ebb and flow and, especially for a new business, it can go bust. Making sure your own affairs are in order protects your family and may even allow you to start up again, if arranged properly.

I recognise that different companies have different characteristics and that this can affect your planning. I also recognise that owners of businesses in Barcelona should base their planning specifically on Catalan laws and taxes.

Planning your personal finances when starting a business

Product – tick. Business plan – tick. Website – tick. Instagram – tick. Business partner – tick. Financing – tick. So the business is good to go and will, of course, be a success.

I wish all of you who are starting a business the very best of luck. It can be a most rewarding experience, even though it can also be exhausting and stressful. However, the data shows us that whilst 80% of new businesses survive one year, only 30% make it past the 10 year point¹. This statistic shows you why your personal finances will continue to need your attention.

Planning points:
1. Recognise that personal money differs from business money. Keep it separate!
2. Get your affairs in order before starting your business. If you have children, make sure you have life cover. Get private medical insurance so you can be seen quickly and get back to work as soon as possible.
3. Know what your personal expenses are before you start the business. This can help you decide how much to take from your business each month. Do not start your business and then take only what you think the business can afford. This will push you into debt personally.
4. Conversely, when business is going well, don’t buy flash cars, boats, luxury holidays etc. until you have sold your business or unless you are Bill Gates, Elon Musk etc. and your company is doing remarkably well.
5. Keep an emergency fund in your personal finances of at least 6 months’ expenses in case there is a business “wobble”.
6. When getting equipment and vehicles for your business do not buy them in the early days of the business, especially if you have to put personal money into the business to make the purchase. Your financial risk is minimised if you rent or lease equipment. We can also now get cars on a “subscription” basis. This means that instead of buying or leasing you pay a fixed monthly fee for the use of a car. This is like renting a car from Avis but you rent it from the car company. If you need to walk away after six months, you can do so with no liability. This is available from several car companies in Spain.
7. Keep flexibility in your personal finances. Do not, for example, put money into pensions in the early days of your business unless you have additional reserves. We cannot access money invested in a pension until you approach retirement.
8. This may mean that you need to leave money in the bank. In Spain, that means we will earn, at the moment, virtually no interest. Accept that fact and make your money

¹Forbes, Fortunley and Business Wire. Statistics are USA statistics

2020, here we come…

By Gareth Horsfall
This article is published on: 6th January 2020

06.01.20

This is the start of a new decade and it will surely bring fresh challenges for all of us, but there is much to look forward to as well.

Climate change is constantly being talked about, we can look forward to a reduction in single use plastics from 2021 in the EU, electric car sales are showing the highest growth in numbers, our current model of economic growth is under question and more focus is being placed on corporate welfare of customers, employees and ecological footprint. In addition, technology is bringing about massive disruptive change to old industries who have had their feet under the table for too long. This is not all without serious challenges but if we work together we can get the results that we need for the benefit of everyone, no matter which side of the political spectrum we might sit on.

My biggest lesson over the last decade

We can’t expect everyone to agree with us about everything. Brexit has been an exponentially steep learning curve for me, one which I have learnt alot from: Tolerance more than anything, but also challenging norms and preconceived ideas. I also learnt that illness is the most democratic thing of all: it spreads regardless of money, age, sex or political views.

My resolutions for 2020

(I make them once a decade)

I aim to reduce my use of social media massively to avoid any influence from fake news (If Sig. Zuckerberg won’t regulate it, then I am afraid I won’t use his platform as much), to read alot more books, try and understand more the people who have differing views from myself, attend a Salvini rally at some point (this is a strange one, but I attended a Sardine manifestazione in December 2019 and I wanted to get a balanced view, so committed myself to attending a political rally of Salvini – watch this space), continue to reduce plastic (Oh my god, how hard is that in Italy), eat less meat and maintain a healthy lifestyle.

And on those bombshells, I would like to wish you first and foremost the best health, and also happiness for the next decade.

Happy New Year 2020

My next article ‘8 reasons to be wary of yourself in 2020’ will be released shortly.

So what is the outlook for 2020?

By John Hayward
This article is published on: 4th January 2020

04.01.20

How was 2019 for you? For many, it has been another year of uncertainty with an apparent lack of decision making by politicians which has led people to delay making their own decisions. For me, it was the year that I broke my ankle two days into a fortnight holiday. If only for that reason, it has not been my favourite year ever.

So what is the outlook for 2020? Questionable political leadership in the UK over the last 4 years has created a weak economic backdrop where investment firms have been unwilling to risk client money in the UK. That appears to be changing and, whether you agree or disagree with Brexit, certainty creates confidence. A known is far easier to deal with than an unknown.

The current problem is how exactly Brexit is going to go through and how long it will take. That is why top investment firms that we recommend spread their exposure globally and not just in the UK. Although most British people have been hung up about Brexit (me included), the rest of the world has been carrying on their business regardless, creating growth for our clients at a time when other people I have spoken to have been too scared to invest, waiting for that magic day when everything will be at its perfect investment point. This approach is almost guaranteed to fail, certainly in the long term. Taking a grip and making sensible, informed investment decisions now is vital without waiting for a politician to decide your short-term, and long-term, fate.

Since David Cameron announced in February 2016 that there would be a referendum on the UK’s membership of the EU, we have seen the following (to 31/12/19)*:

+12% – UK inflation
+49% – FTSE100
+30% – A low risk investment fund that we recommend for cautious investors
+4% – Average savings rate
-8% – GBP/EUR exchange rate

What these figures illustrate is that the person who invested, or remained invested, in February 2016, should now be pretty happy. Those who have decided to wait until they know what is happening are likely to have made nothing with their money remaining in a non-interest bearing current account. Their money is now worth 8% less when allowing for inflation. This “loss” is compounded for those living in Spain, receiving regular income from UK State and other pensions, by the fact that the exchange rate is down 8%.

How long do you, or can you, wait before arranging your finances for your benefit and not leaving your money propping up banks that still have issues? We have many satisfied clients who have benefited from our knowledge and expertise. In addition, with our experience of tax in Spain, we can help those living in Spain after Brexit, guiding clients who have UK investments and reducing the impact of the Modelo 720 asset declaration.

Whilst there is a new batch of uncertainty surrounding what Brexit deal will be put in place on 31st January 2020, and what trade agreements will be set up by 31st December 2020, there are positive signs for the coming year and the benefits of these can only be achieved if one is invested appropriately.

We can review your current investments, wherever they may be, and make sure that they are both profitable and tax efficient, both here in Spain and the UK.

*Sources
Hargreaves Lansdown
Financial Express
Swanlowpark

Brexit – What now?

By Katriona Murray-Platon
This article is published on: 18th December 2019

Some of you, like me, might have woken up on Friday and after hearing the election result felt utterly depressed. Irrespective of how the vote could or should have gone, or who you may have voted or wanted to vote for, this result will seriously affect the Brits living in Europe. Brexit is now more likely than ever, so what does this mean for us? Well luckily, there is someone who is somewhat of an expert on the matter, Professor Sébastien Platon, Professor in European Law at the University of Bordeaux and incidentally my husband! Over breakfast I asked him a few questions.

So, what now?
The British parliament must first pass the EU (Withdrawal Agreement) Bill, and then they have to agree on the Withdrawal Agreement itself. Given that the Conservatives now have a majority it is likely to be passed. Either later or at the same time, the European Parliament also has to agree on the withdrawal agreement. If all of this gets done by the 31st January, Brexit will happen as planned. If not, the UK will have to request ANOTHER extension which would have to be agreed by the other 27 member states.

During the transition period are all European rights maintained?
Apart from the right to vote and run as a candidate in EU elections and municipal elections, the right to participate in European citizens’ initiatives and the UK’s right to vote on EU laws, all rights, including the right to free movement, are maintained during the transition period.

Does a British citizen who has not yet settled in France still have the right to do so after 31st January?
Yes. Up until 31st December 2020 all British citizens can come and settle in the EU. After the transition period, those who have established residency in the EU and wish to bring their family members (spouses, partners, direct descendants under 21 or dependent, direct relatives in the ascending line) to live with them can still do so.

Can the transition period be extended?
Yes, if the UK and EU agree to extend the transition period. But, unlike the Brexit extensions, they cannot ask for an extension the night before the 31st December 2020. A decision has to be made before 1st July 2020 extending the transition period for up to 1 OR 2 years. British citizens would therefore have until the end of the transition period (or extended period) to settle in the EU.

What about healthcare?
During the transition period, the EU social security coordination rules will continue to apply. The British who reside in France (or any other member state) and are in the UK health system but not the French health system can continue to benefit from this health cover as normal. After the end of the transition period, these rules will continue to apply to:

• UK nationals subject to the legislation of a Member State at the end of the transition period,
• UK nationals who reside in a Member State while being subject to the legislation of the UK at the end of the transition period,
• UK nationals who pursue an activity as an employed or self-employed person in one or more Member States at the end of the transition period and who are subject to the legislation of the UK,
• Their family members and survivors
These persons will be covered as long as they continue, without interruption, to be in one of these situations involving both a Member State and the UK at the same time.

What about pensions?
For the persons I’ve just mentioned, the time worked in the UK will count towards an EU pension and inversely any time spent working in France would contribute towards entitlement for a UK pension should they wish to return to the UK when they retire.

Do we need to apply for cartes de séjour?
During the transition period you do not need them. After the transition period each member state has the right to require UK citizens to apply for a new residence status, the sole purpose of which is to verify whether the applicants meet the conditions set in the withdrawal agreement. If they do, they have a right to be granted the residence status and the document evidencing that status (which will NOT be a “carte de séjour”). The French administration cannot refuse this status if you meet the conditions. The deadline for submitting the application shall not be less than 6 months from the end of the transition period. The host State has to ensure that any administrative procedures for applications are “smooth, transparent and simple, and that any unnecessary burden are avoided” with applications being “short, simple, user friendly and adapted to the context of” the agreement. Only once the agreement has been ratified will we know if and how the French Government wants to proceed on the matter.

Whilst I do not agree with Brexit and wish things had happened differently, at least after four years of uncertainty there may now be some progress. The pound bounced back up on Friday and this election result is likely to have a positive impact on the markets and portfolios.

Political shock in the UK

By Gareth Horsfall
This article is published on: 13th December 2019

13.12.19

Dear Readers of my articles

I am writing you a very short email today after what appears to be somewhat of a political shock in the UK. I will refrain from further comment until I have had time to let things sink in and I can discuss possible financial consequences in a rational manner.

However, where one loses another gains, as the saying goes, and one of the fortunate consequences of this vote in the UK is that it will bring, I think, short termed optimism and bear favourably on pounds sterling. I doubt this will continue as the reality of leaving the EU strikes home once again, and let’s not forget that a NO Deal scenario is now a real possibility again.

My point is that as I write this GBP: EUR has bounced to 1:21. If you have money in GBP and you need to convert to EUR you might be staring at a very favourable rate. I am not making any assumptions on where it will go during the course of the day, weeks ahead or even months, but compared to the last few years the exchange rate is quite attractive for sterling conversion to euro.

It was predicted that this would happen after a Tory majority win, so take advantage where you can.

Enjoy the day ahead as news comes in and we start to find out what the future holds for UK politics.