How Expats Can Consolidate Their UK Pensions

By Craig Welsh
This article is published on: 8th February 2019

08.02.19

Very often we are contacted by expats who have several different pension schemes, and usually they are scattered around different countries. Of course, in an ideal world pensions would be MUCH easier to keep track of, but unfortunately efforts to ‘harmonise’ pensions across the EU haven’t made much headway. Pensions are inherently linked to the taxation system of that particular country (because you usually get tax relief on the contributions you make) and so it can be very difficult to consolidate them or even move your ex-employer’s scheme to your new company scheme.

The good news is that this CAN be done with UK pensions. So, if you are an expat who has previously worked in the UK, you can consolidate them all into one pot. That ‘pot’ can be either be left in the UK, using what is known as an ‘International SIPP’, or taken out of the UK using a QROPS (Qualifying Recognised Overseas Pension Scheme).

Both the SIPP and the QROPS route can offer excellent flexibility when it comes to taking benefits, as well as very favourable estate planning opportunities (being able to pass on the full value of the ‘pot’ upon death, for example). More on that later.

BUT!
There’s a but, of course. It’s not suitable for everyone and it depends on a host of different factors. Moving any pension requires regulated advice from suitably qualified and licensed advisers. There is a proper process to go through, a process which is designed to ensure that you only transfer if it is clearly in your best interests to do so. Indeed, if you are considering moving a defined benefit (final salary) pension scheme then extra care should be taken as you will be giving up a guaranteed income, and you may find that you will need advice from two advisory firms. The regulated process is there for your protection!

Everyone’s situation is different of course, and a licensed advisory firm will look at your financial situation as a whole. But here are some general rules of thumb;

A QROPS may be suitable for you if all of the following applies to you;

You have UK pension schemes with a total transfer value of over £100,000
You have left the UK and do not intend to return
You live in the EEA (European Economic Area) and you don’t intend to leave in the next 5 years*

*An OTC (Overseas Tax Charge) was introduced in 2017 which means a 25% tax charge would be applied to a transfer unless both the new pension scheme AND the pension scheme member are based in the EEA (or both are in the same country).

An International SIPP may be suitable for you if all of the following applies to you;

You have UK pension schemes with a total transfer value of over £100,000
You have left the UK but there is a chance you will return
You are unlikely to be affected by the LifeTime Allowance (LTA)** of £1,030,000. If this is likely to be an issue for you, QROPS should be considered

**the LTA is the overall limit of tax-privileged pension funds you can accrue in the UK, before a Lifetime Allowance tax charge applies.

What are the benefits of consolidating?
What next? As I said before, transferring a pension requires regulated advice from suitably qualified and licensed advisers, and a full assessment needs to be carried out. If it is established that a transfer is indeed in your best interests, what can a QROPS or International SIPP offer you?

Well, both can provide you with;

- Flexi-Access. From the age of 55, a 25% lump sum (in some cases 30%) is available (tax-free in the UK but take care as it may be taxable in your country of residence). Thereafter you have the option of flexible drawdown (taxable income). This means you choose when you start taking your income, and you can vary how much you want to take

For those with defined benefit / final salary pensions, this can mean turning the promise of a fixed income for life into a large pot of capital you can access flexibly.

- Control of the Investment Pot. You are not giving up your savings for an annuity; the ‘pot’ is invested, and you can control how it is managed, according to your risk profile
- Currency Choice. Even with the International SIPP option, you can change the currency of your assets from Sterling to Euro. We had clients who took advantage of this a few years ago when the rate was €1.39 to £1, and now they’re pretty glad they did!
- Estate Planning. The pot can be passed on to your beneficiaries on death. With a QROPS the whole pot can be passed on free of tax, while the SIPP (as it is still a UK product) will be taxed at the recipient’s marginal rate only IF the deceased was aged over 75

This can be a real game-changer if you have a large defined benefit / final salary scheme, which typically offers a spouse’s pension of 50% on the death of the member. For example, I have seen many cases where it meant turning a guaranteed income for the surviving spouse of £10,000 per annum into a potential lump sum of over £500,000. Tough choice!

Lifetime Allowance. In the UK, pension savings of over GBP 1,030,000 are taxed at either 25% or 55%. Once a QROPS has been used however, the LTA no longer applies. So, if you are anywhere close to the LTA, a QROPS should be considered

Elephant in the Room
I have deliberately not mentioned the B-word; Brexit! That’s because at the time of writing, with only 50 days until the UK is due to leave the EU, we are still no clearer as to whether the UK will leave with a deal, without a deal, or will leave at all.

The current opportunities for expats to consolidate their UK pensions may well be at risk depending on the outcome of Brexit. The rules could be changed; we just don’t know. So, it’s advisable to act now before any doors are closed.

At Spectrum we offer a free initial analysis of your UK pensions by our highly qualified advisory team, as well as our ongoing advice on portfolio management and the various retirement options. You can read some feedback from existing clients here

We are all living longer, and it’s not all good news

By Jeremy Ferguson
This article is published on: 5th February 2019

05.02.19

When it comes to the way in which we are leading our lives, the world in which we live has changed significantly over not that many years.

Do you remember starting the day off with a bowl of cornflakes smothered in processed sugar and full fat milk, followed by a couple of slices of white processed bread smothered in butter and marmalade (laden with sugar), then washing that down with a couple of cups of strong coffee before we rushed off to work? Then at work the stresses of the day were broken by coffee to keep you going, with a packet of sandwiches and a bag of crisps at lunch time. A sneaky stop off on the way home for a couple of pints for some, then dinner followed by bed. Sound familiar?

Through a combination of increased awareness of the dangers of processed food and sugars, non-stop articles and TV programmes warning us of health issues; people are becoming increasingly health conscious. Add to that the mass of personal trainers and nutritionists out there, and people nowadays are more active and much more aware when it comes to healthy eating and lifestyle.

If you are reading this, you probably made the decision to move to the south of Spain some years ago, and boy, how things have changed as a result. Longer days, constant sunshine, lovely salads, a relaxed life, and probably a lot more time spent outside walking, or for many, playing golf or tennis. Oh yes, and the big one, much less stress!

This is all resulting in something that is causing massive issues around the Globe for all sorts of reasons. People are living longer and needing more medical help along the way, because, despite being generally healthier now, older people still have more health issues than younger people. With that comes an ever increasing stress on healthcare systems. The ageing population also means that the ratio between retirees and workers is swinging in a way that means less taxable income is there to help fund the ever increasing medical needs.

So, while it is great we are all living longer, and therefore having a longer and healthier retirement, how much attention are we paying to this fact with regards to financial health? The pension pot and savings pot we hope you have accumulated now has to last for an ever increasing length of time. Have you considered the need for adequate medical insurance before it is too late to be accepted as a client (because you are too old)? Inheritances may be left to you at a much later stage of your life, and when they are, they could also be smaller due to the fact your parents lived so much longer.

In summary, it is really very important to spend time considering all of these factors. How many of us actually look at this in detail, with an honest reality check regarding the years ahead?

One of the things I like to do with my clients is to make sure we look at the big picture, assessing what you have and how long it is likely to last. Should you be putting the brakes on the lifestyle just a bit for that added longevity financially, or are you being too cautious? It is amazing the amount of couples I meet who are being too careful with money. Or have you got it just about right?

What happens if inflation rises or falls, or the money you have invested loses value or, hopefully, makes more than you expected? Oh yes, and what happens to your income when exchange rates move?

It is always said that you cannot buy time, but strangely enough, most clients I meet here in Spain look a lot younger than they actually are, so in my view, they all seem to have managed to do just that, aided probably by all of the things we know are good about living here. So, if by talking we can remove a little more stress by getting all of those financial ducks in a row, then maybe you can cheat the grim reaper for a good many more years to come.

The PAYE system – and so it it begins!

By Katriona Murray-Platon
This article is published on: 4th February 2019

04.02.19

Earlier last year I wrote about France’s plans to bring in a PAYE system as from 1st January 2019. Now that we are in January, we can see the effects of this new system. French pensioners and employees may have had the tax deducted from their salaries/pensions in December 2018 if the payment was made 1st January but for many people the effects of this new system will appear by the end of this month. Self-employed business owners, landlords and those with foreign sourced income will have to make monthly or quarterly tax payments. The difference with the previous system is that last year your quarterly or monthly payment was to pay towards your income tax for 2017 paid in 2018 whereas this year the payments are not for the 2018 tax but for the 2019 tax only.

If you go onto your account at impots.gouv.fr you can go into the menu for “gerer mon prélévement à la source”. This will show you your joint rate, if you and your partner chose one, or your individual rates. For those receiving French pensions and on French payroll, you will see a percentage of how much will be deducted from the income after social charges (so the “net imposable”). Going forward you will be able to see how much and when the tax was deducted. The applicable rate already takes into consideration the 10% tax abatement on salaries and pensions.

The main advantage of this new system is to allow the tax payer to inform the tax office of any changes to his personal situation such as a wedding, a divorce, a birth or death. In the “Gerer mon prélevement à la source page” you can declare any changes to your personal situation, change your tax rate or increase your tax payments. For those paying tax monthly or quarterly, you can change the frequency of your payments to monthly (if you paid quarterly) or to quarterly.

If your income has significantly decreased or the applicable rate is too high you can easily inform the tax office via the website. For French pensions and salaries, if the tax is reduced by more than 10% or 200 euros per year, the tax office will change your tax rate and inform your employer or pension provider within 1-2 months. The rate for income that is not taxed at source was calculated on the income declared for 2017. This amount, after the applicable abatement, was then divided into 12 monthly payments or 4 quarterly payments.

The annual tax declaration must still be completed between April and June. This declaration is to allow you to declare any income that is not taxed at source, any allowable expenses and any tax reductions or credits. The tax rate or amount will be adjusted once the tax return is completed in May 2019 and the tax calculation is carried out in September 2019.

Those receiving tax credits (home help, child care, etc) will have received an advance payment into their bank accounts in January. There will be an additional tax credit when the tax is calculated in September 2019 which will cancel some of the tax payable 2018 to avoid people paying 2018 and 2019 all in the same year.

Capital income is not taxed at source. They are subject to the set rate of 12.8% unless the marginal rate has been opted for. Assurance vie payments will be taxed according to the rules in place when the policy was set up. All assurance vies set up or topped up after 27th September 2017 and/or under 150,000 euros, may be taxed at the 35%, 15% or 7.5% rates as before or the marginal rate, in addition to the 17.2% social charges.

If you have recently arrived in France, there will be no tax to pay until you complete your first tax return between April and June of this year. You should make sure that you get your French tax forms early in April, do not expect them to be sent to you. You will not be able to complete your tax return online so you will have to file a paper return.

Whereas the French tax rules were complicated previously, even though this new system is designed to simplify things, it is going to take a while to get used to. For complete peace of mind, it is best to get in touch with a good financial adviser who will be able to carry out a free financial review and assist you in making the best tax efficient decisions.

French Tax Changes 2019

By Sue Regan
This article is published on: 31st January 2019

31.01.19

2019 has brought a number of changes to the French tax system. Below is a summary of the principal changes affecting personal taxation.

INCOME TAX (Impôt sur le Revenu)
There has been no change to the rates of income tax of the barème scale, but the tax bands have been increased as follows:

Income	Tax Rate
Up to €9,964	0%
€9,965 to €27,519	14%
€27,520 to €73,779	30%
€73,780 to €156,244	41%
€156,245 and over	45%

PAYE (Prélèvement à la Source)
PAYE has been introduced in France with effect from 1st January 2019.
The types of income subject to PAYE include:

Income from employment
Retirement income, including UK private and State pensions, but excluding certain pensions where tax is already deducted at source, such as UK Civil Service pensions
Rental income, including that from French properties owned by people who are not resident in France.

For French source income, the employer or pension provider will deduct the tax at source.

Clearly, where income is generated from outside of France there can be no deduction at source by the French authorities. This means that many expatriates living in France will be subject to a monthly withholding tax on their income. Therefore, starting in January 2019, the tax authorities will collect a sum equal to 1/12th of the tax paid in 2018 (based on income declared for 2017).

Excluded from PAYE is investment income, such as bank interest, dividends, capital gains and gains from life assurance policies.

New residents of France who have not yet submitted a French tax return, will have the option of paying a sum ‘on account’, or be taxed in May 2020, following submission of their first tax return.

Everyone will still be required to submit a French tax return in the May of the following year. Thereafter, the final assessment of tax liability will be carried out, and you will either receive a tax refund or be required to pay any additional tax due, over a four-month period.

If you do not currently pay any income tax, you will not be required to pay provisional monthly payments. Similarly, if you anticipate a significant change to your income during the course of the year you can request that the tax authority alter your tax code. However, if you do so, and your income is 10% greater than advised, you could face a tax penalty of at least 10%.

REFORM OF SOCIAL CHARGES (Prélèvements Sociaux)
Some changes have been introduced to certain social charges, which is good news for some taxpayers.

The main rates for social charges remain the same as for 2018, i.e.:

Source of income	Rate
Pension	9.1%
Investment and property rental	17.2%
Employment	9.7%

Social Charges on Pension Income
The exemption from social charges on pension income still applies if you hold the EU S1 Certificate or if France is not responsible for the cost of your healthcare.

However, those pensioners who do not satisfy the exemption conditions above, but whose pension income is less than €2,000 per month (or €3,000 for a couple), will now pay a lower rate of 7.4% on pension income.

Social Charges on Investment Income and Capital Gains
From 1st January 2019, individuals covered under the health care system of another EU or EEA country are no longer subject to the existing rate of 17.2% on investment income or capital gains. Instead they will now pay a new flat rate of 7.5%. This new flat rate is known as the ‘Prélèvement de Solidarité’ and represents a saving of 9.7%. It applies to investment income, such as property rentals, bank interest, dividends and withdrawals from ‘assurance vie’ policies, and capital gains realised by both residents and non-residents of France.

In summary, taxpayers can benefit from the new 7.5% rate on investment income if:

They hold the EU S1 Certificate
They are a non-resident of France earning French source income (i.e. rental income, capital gains on the sale of a French property, etc) and are covered by the health system of another EU or EEA country

ASSURANCE VIE
There are no changes to ‘assurance vie’ apart from the social charges reform detailed above which will benefit some policyholders.
For policies held for more than eight years, the annual allowance remains at €4,600 for individuals and €9,200 for married/PACS couples.

This outline is provided for information purposes only based on our understanding of current French tax law. It does not constitute advice or a recommendation from The Spectrum IFA Group to take any particular action to mitigate the effects of any potential changes in French tax legislation.

If you would like to discuss how these changes may affect you, please do not hesitate to contact your local Spectrum IFA Group adviser.

Récapitulatif sur le MODELO 720

By Cedric Privat
This article is published on: 25th January 2019

25.01.19

Qu’est-ce que le Modèle 720 ?
En 2013, le gouvernement espagnol décide de s’attaquer à la fraude fiscale. Il met alors en place un certain nombre de mesures.

Visant en priorité les nationaux espagnols, cette réforme affecte également les étrangers vivant et/ou travaillant en Espagne disposant d’un patrimoine en dehors de la péninsule Ibérique.

Le Modèle 720 est une déclaration informative mais obligatoire sur les biens et avoirs à l’étranger.

L’objectif de cette démarche est de disposer d’informations sur:
– les comptes bancaires situés à l’étranger
– les titres, droits, assurances-vie et placements gérés ou acquis à l’étranger
– les biens immobiliers et les droits sur les biens immobiliers à l’étranger
Ce formulaire dûment rempli doit être présenté entre le 1er janvier et le 31 mars, uniquement par internet (via le site “Agencia Tributaria – Modelo 720 Declaración Informativa. Declaratión sobre bienes y derechos situados en el extranjero”).

Qui doit présenter le Modèle 720 ?
Toute personne physique ou morale résidant sur le territoire espagnol (plus de 183 jours par an), et uniquement si la somme de ses actifs est supérieure à la somme totale de 50 000€ dans une ou plusieurs des trois catégories.

Les années suivantes, il n’est demandé de représenter le Modelo 720 qu’en cas d’augmentation de plus de 20 000€ par rapport au capital initialement déclaré.

Quels sont les risques en cas de non-présentation?
Même si cette déclaration n’a pour but que d’informer, le gouvernement espagnol menace d’appliquer de lourdes sanctions en cas de non respect de cette mesure.
– 5 000€ pour toute information incomplète, erronée ou fausse, avec un minimum de 10 000€ d’amende par déclaration.
– 100€ par information, avec un minimum de 1500€, si la déclaration a été déposée au delà de la date limite.
– Si l’Hacienda se rend compte de l’absence de déclaration, les sanctions annoncées sont extrêmes (par exemple, 150 % de la valeur du bien, plus-values sur tout patrimoine non justifié)

De nombreuses plaintes ont été déposées afin de contester ces sanctions excessives et injustes, la commission européenne serait également en contact avec les autorités espagnoles sur ce sujet.

Néanmoins, il vous est fortement conseillé d’effectuer cette déclaration afin d’éviter tout problème avec Hacienda.

Plusieurs conseillers fiscaux francophones à Barcelone, dont je me propose de vous fournir les coordonnées, peuvent vous apporter leur aide pour remplir ce formulaire.

Je reste à votre entière disposition pour vous fournir tous renseignements complémentaires.

As a British citizen living in France who can look after my financial affairs if I become incapacitated?

By Tony Delvalle
This article is published on: 14th December 2018

14.12.18

There has been a huge rise in the number of lasting powers of attorney set up as dementia and Alzheimer’s have become the biggest cause of death.

Power of attorney arrangements allow an individual’s financial and health affairs to be looked after by someone else, the attorney, if they lose mental capacity in the future.

Several million “lasting” agreements have been registered since 2008, when they replaced “enduring” power of attorneys, amid concerns that the rules were too easy to abuse. There are two types of agreement – one covering finances and property, and another for health and welfare. Finance and property is far more popular.

The sharp rise in new agreements – which are set up on average when the donor is 75 – comes as the Office for National Statistics reveals deaths from dementia and Alzheimer’s accounted for almost one in eight deaths in 2015 – a total of 61,686 people – overtaking heart disease as Britain’s biggest killer. It is steadily on the increase.

Many people are still exposed as the majority of people have not appointed a power of attorney. It is possible for someone to take control of your financial or welfare decisions after an individual becomes mentally incapable, this can be a lengthy and complicated process with extra cost, which can cause distress at an already difficult time.

Without power of attorney, friends and family have to retrospectively apply to the Court of Protection and prove why they should assume responsibility. This process incurs court fees and can take up to 16 weeks, leaving money locked into accounts until a decision is made. Add to this an international dimension and it is certainly a complicated problem.

As a British citizen in France you can do either a UK lasting power of attorney or a French mandat de protection future. The choice between which one is best will depend where you intend to live now and the future and where is the main part of your estate.

Let’s look at the UK and French legal systems available in cases of incapacity. The two different types of lasting powers of attorney in case of incapacity in England are Health and Welfare, and Property and Financial, whereas in France there is only one the mandat de protection future.

UK Health and Welfare covers

Daily routine
Moving into a care home
Life sustaining treatment

UK Property and Financial covers

Managing bank or building society account
Collecting benefits or a pension
Selling their home

French Mandat de protection future covers all aspects of a persons financial and health well being.

1) As a British citizen living in France, which law would govern the administration of your estate in case of incapacity?
– French law will be applicable under the provisions of the Hague Convention

2) What does French Law use to protect people from incapacity? The Mandat de protection future is one choice and covers all aspects of a persons financial and health well being.
* Trusteeship
* Guardianship

3) Could you prepare for a physical or mental incapacity by appointing somebody you trust to administer your estate, pay your debts, manage your income in France?
Yes of course.

4) Would that power of attorney be applicable and enforceable abroad?
Yes it would be efficient in most countries and in 100% of the countries who ratified the Hague Convention such as England and Wales. In other words you could prepare a LPA or mandat de protection future and both should be applicable.

5) Does the French power of attorney have a limited scope? Can the attorney sign a deed of sale on your behalf?
a) Notarial mandate (notarial deed extend the power of the guardians up to the possibility of selling the estate)
b) Mandate not supervised by the Notaire (mere administration by an appointed trustee + the Judge)

So both are legal and which one is best for you may depend on a number of factors. What your assets are, where they are held and in what way, jointly, individually, what you want from them, inheritance planning etc.

The most important thing is to do something. Taking good legal and financial advice before you do to see what is best for you and avoid potential future problems when you least need them is imperative.

Possible effects of Brexit in Spain

By Charles Hutchinson
This article is published on: 6th December 2018

06.12.18

At 11pm on March 29, 2019, the United Kingdom will officially leave the European Union.

Much has been written about the millions of Europeans living in the UK and the millions of Britons living in Europe, but little about the tax consequences for Britons who are non-resident in Spain but have interests in the country, mainly owning real estate properties.

Britons could lose the following tax benefits in Spain when the United Kingdom leaves the EU:

Non-resident income tax on real estate: the Spanish Government imputes a benefit in kind to owners of holiday houses that is taxable as income. By definition, a house owned by a non-resident cannot be their main home, so every non-resident owner of a house in Spain, even if it is not rented out, has to declare an imputed income and pay taxes on that income annually. The income tax rate is 19% for those living in an EU member state, Iceland and Norway, but it is 24% for the rest.

Therefore, Britons could end up paying 24% tax on the imputed income instead of current 19%.

Rental income tax: non-resident owners of Spanish properties who get income from renting them out are liable to Spanish non-resident income tax on the gross income. However, those living in an EU member state, Iceland and Norway are entitled to offset some costs from their rental income and therefore are taxed only on the net profit.

Therefore, Britons could end up paying 24% tax on gross income with no deductibles, compared to the current 19% on net profit.

Inheritance and gift tax: regional governments are empowered to regulate this tax, the consequence being that the tax liability will vary depending on the region. The difference can be substantial.

Non-residents are subject to Federal law, which is normally less favourable than Regional law. However, those living in an EU member state, Iceland, Norway and Liechtenstein can choose the application of the most favourable legislation for their situation, Federal law or Regional law (in which the properties of major value are located).

Therefore, Britons could lose the right to apply for Regional law. In Andalucía, for example, there is a threshold of 1 million euro, meeting certain requirements, to which Britons could not be entitled.

This is just a short list of the possible tax consequences of Brexit. The UK may join the EEA (European Economic Area) like Iceland, Norway and Liechtenstein. If the Norway-style agreement is adopted, a major part of EU law could still apply, but that is by no means clear at this point.

*Source: JC&A Abogados (Santiago Lapausa)

BREXIT and our right to remain in Spain

By Barry Davys
This article is published on: 29th November 2018

29.11.18

Brexit and our Right to Remain in Spain

There is much work still being carried out by both teams in the Brexit negotiations, despite the Withdrawal Agreement. However, until all issues have been agreed upon, including the Northern Ireland border issue, fish and Gibraltar, and the UK Parliament has approved the agreement, nothing is certain about the Brexit.

For those of us living in Spain, there is something we can do now which provides some protection. We have been recommended to do this by the British Embassy in Spain. The action we can take now is to register for “Permanent Residency”.

Without having to give up our British passport or take Spanish citizenship, we can apply for permanent residence if we have lived here for more than five years. This gives us the same rights as a Spanish person to reside in Spain. Making this application whilst Britain is still part of the EU will be easier than when Britain is not part of the EU.

If you already have a residency card, please check to see whether it contains the word “Permanente”. If it does, you have already completed this process. If you have a card that does not include this word, you should complete this process.

I am applying for permanent residency as I write this article and it is not (famous last words) onerous. Other people who have completed it have found the same. There are good notes, including information on what is required to make the application, at this web address. There are two forms that are required: one is the application form and the other is the payment of the fee form. Supporting documentation is also required; this is listed in the notes on the website above.

The completed forms are submitted at your police station that deals with “extranjeros”. There are several in Barcelona, but in the Costa Brava, Girona is the place to go. Some advice suggests that the payment form should be first taken to the police station and then to the bank. Others suggest payment first (an online option is available) and then taking proof of payment with your application to the police station.

The application form is the Modelo EX-18 here and the payment form is the Modelo 790.

Confirmation of our residency status is essential for our tax situation too. I therefore recommend that if you can, you apply for permanent residency. Please feel welcome to Whatsapp me if you wish to discuss your situation at +34 645 257 525 or email barry.davys@spectrum-ifa.com

Le Tour de Finance autumn events

By Spectrum IFA
This article is published on: 23rd November 2018

23.11.18

The latest Le Tour De Finance seminar, which was held on the 15th November at the magnificent La Chartreuse du Bignac hotel near Bergerac, was yet again a successful event with maximum attendance.

Attendees, who were a mixture of existing clients of The Spectrum IFA Group and those wanting to hear more about the services and financial solutions presented, had travelled both locally and from other regions in France.

Presentations were given by representatives from Prudential International, Tilney Investment Management Services, Currencies Direct and The Spectrum IFA Group. Topics discussed included recently introduced changes to Assurance Vie (the most tax efficient savings and investment vehicle available in France), the suitability of transferring UK pensions to overseas schemes, investment market outlook and the current sterling to euro exchange rate and solutions available to help mitigate exchange rate volatility.

Unsurprisingly, Brexit featured widely in the informative question and answer session that followed. Although many answers are yet to be determined, attendees were left reassured that The Spectrum IFA Group and its partners were well informed on both the technical detail of Brexit and the practical implications for anyone living or working in France.

Portability of financial products, such Assurance Vie, for an expatriate returning to the UK, was another area of interest in the question and answer session and guests were provided with example scenarios regarding the flexibility that such products offer.

The key message that came out of this event was the importance and benefit, even for the financially experienced, of seeking professional, independent advice. The audience was reminded, in these uncertain times, that it is critical to ensure that all aspects of our personal finances are properly structured, for both legitimacy within the French fiscal system and for maximum tax efficiency ahead of any potential changes in the months and years ahead.

Questions and discussions continued during an informal lunch (in the chateau’s beautiful dining room), during which guests and speakers alike found no shortage of topical subjects for conversation.

Feedback from the event has been very positive. One guest commented “”I enjoyed the day and found it helpful and thought provoking. I also liked the format and thought it much better than the usual sales pitch that one often encounters with perhaps some other organisations. The interactive exchanges added real value.”

We are planning to hold further seminars next year and will provide details on Le Tour de Finance website. See www.ltdf.eu for further information.

Le Tour De Finance Bignac hotel near Bergerac

Deal or No Deal…?

By John Hayward
This article is published on: 20th November 2018

20.11.18

As someone who has lived and worked in Spain for more than 14 years, and keen to stay here with my family for the foreseeable future (children moving to other climes accepted), I am very interested in the rights of British citizens in Spain post Brexit. A colleague of mine is part of a group in Italy set up to protect the rights of British citizens there. A member of this group has put together a very comprehensive list (non-exhaustive) of things that you may need to do to prepare for a No Deal Brexit scenario, which after the events last week, seems to be becoming an ever-closer reality. I have made the list more Spanish.

Whilst there may be some deal agreed anywhere up to teatime on the 29th March 2019, there are several items on the list which many people should already be applying.

At the same time we don´t want to get caught up in scaremongering, I have come across several reassuremongers who just choose to live in the “it won´t affect me” world. There are already changes being made to British statutes in readiness for leaving the EU, with or without a deal. Getting one´s house in order now is almost certainly going to be easier than from 30th March 2019 onwards.

Here is your almost definitive list of things to do to prepare for a NO Deal Brexit.

1. MAKE SURE YOU ARE LEGALLY RESIDENT IN SPAIN UNDER CURRENT RULES.

That means you should:

Apply for residencia under the current rules. As an EU citizen you must register as a resident if you plan on living in Spain for more than 3 months.
You should register in person at the Oficina de Extranjeros (immigration office) or designated police station in the province where you live.
Before going to your local Oficina de Extranjeros or designated police station, you must make an appointment online, which can be done on the Spanish public administration website.
Once on the online appointment booking system, you should select the province where you live and then the option “Certificados UE” and follow the instructions to select and confirm your appointment time.
When you go to your appointment, you will be required to provide documents to support your application. You will need evidence of a specified minimum level of financial income which could be in the form of a letter from your Spanish bank manager and, if you are not working, private health insurance or an S1 (which you obtain from the UK if a pensioner). This will evidence your legal residence in Spain and give you proof that you were legally resident on 29 March 2019. This may be like gold dust in the case of a no deal exit, and if there is a Withdrawal Agreement it will help you benefit from a streamlined process to receive a new card if necessary under post-Brexit rules.
Years of living in Spain do not necessarily count – only legal residence. So if you have been living ‘under the radar’ so-to-speak, try to rectify the situation in advance of 29th March 2019.
Apply for a Residencia de carácter permanente (‘permanent residence’) under existing EU provisions if you have been legally resident for at least 5 years. It is the best evidence that most of us can have of our long-standing residence in Spain.
Make sure that you’ve submitted tax returns in Spain. As a resident, (whether in the first 5 years or afterwards with Residencia de carácter permanente, you are required to submit tax returns and pay tax in Spain on your global assets, income and gains even if all of them originate from the UK).
Make sure that you either have private health insurance (obligatory for the first 5 years of residence unless you have an S1 from the UK or are working), or that you’re registered in the Spanish health system (e.g. you already have a Residencia de carácter permanente under existing EU provisions).

2. CREATE, AND KEEP UP TO DATE, A DOSSIER, AS IF YOU ARE APPLYING FOR RESIDENCIA OR RESIDENCIA DE CARÁCTER PERMANENTE OR CIUDADANÍA ESPAÑOLA, IN PARTICULAR:

Collate copies of as many of your tax returns as you can get – tax returns, proofs of payment and receipt. These days there is online access to your tax files and records.
Put together a file of utility bills for at least 10 years if you can. This will prove your continued residence.
If your name is not on the bills for your household, or on any utility bills, get it added now.
For women in particular: make sure that the name on bills, bank statements, pension statements, payslips etc. matches the name on your passport if possible.
Put together a file of bank statements, wage slips and/or pension statements for the last 5 years if you’ve lived here that long. Longer is even better – 10 years is best. You may need these to prove the stability and sufficiency of your resources.

3. CHECK YOUR PASSPORT
Make sure your passport will be valid for several months after 29 March 2019. If not, consider renewing it early. Also, check your signature.

4. MAKE SURE YOU ARE IN SPAIN ON 29TH AND 30TH MARCH 2019
This is probably not the best time to make a family visit to the UK! Transport could be chaotic, with no agreements on air or other travel between the UK and EU.

5. TOP UP YOUR MEDICATION

If you currently rely on an S1 form for access to the Spanish health service and/or you need regular medication, think about making sure you have a good supply of it on 29 March 2019.
If the worst happens and the reciprocal health care system stops on that date it might take several weeks to get an alternative system up and running and there may be short term chaos. Making sure that you have the permitted 3 months of long-term medication would mean that you’d avoid having to pay full whack for your meds or being without a family doctor while the situation was resolved.

6. CHECK YOUR DRIVING LICENCE

If you’re still using a UK driving licence, apply for a Spanish licence now. It’s relatively straightforward and for most people, it can be exchanged (with some fees and a medical) without having to take a full Spanish driving test (theory and practical). It’s possible that UK licences will not be valid in the EU in the case of a no deal Brexit.
Consider applying for an International Driving Permit if you regularly drive in the UK.

7. THINK ABOUT MOVING MONEY
If you have bank accounts, savings or investments in the UK, consider moving them to Spain or into Spanish compliant vehicles, or some other EU jurisdiction now. Sterling may drop suddenly in the case of a no deal exit; there may also be temporary problems moving money in and out of the EU.

8. TRY TO HAVE A FINANCIAL BACKSTOP
If at all possible, try and make sure you have access to enough cash to see you through two or three months, especially if your income comes from the UK and is transferred monthly.

9. CONSIDER YOUR PERSONAL PENSION
If you have a personal pension (not state or public service occupational) and have not yet retired, think seriously about cashing it in if you’re old enough (take financial advice on the tax implications of cashing it in before doing so), or transferring it. A detailed pension analysis would be required to look at the suitability of doing so but it might just be possible to remove your pension from future UK political and tax problems as a result of No Deal Brexit scenario. There may be issues with passporting rights after Brexit that could cause problems with insurers making payments to those living outside the UK.

10. LOOK AT WAYS YOU CAN MAXIMISE YOUR INCOME AND MINIMISE YOUR EXPENSES

This applies particularly if the bulk of your income is in sterling, which may take a serious hit after a no deal exit. Can you survive if sterling hits parity? Goes below parity? What’s your bottom line? What can you do to turn your income into euro income?
Create a personal financial contingency plan. Look at ways you can cut your spending temporarily, and at ways you could create additional income.
Get any potentially expensive dental or optical work done now.

11. IF YOU HAVE A BUSINESS THAT RELIES ON ATTRACTING PEOPLE FROM THE UK.

Can you change your client demographic? Whatever the deal or no deal, British people may limit their travel to the EU next year and you may need to find new clients if you’re to survive financially. Make sure you have a website in the language of the nationality of people you may wish to attract, if you haven’t already, and that you begin to advertise NOW to attract other customers.
But …
If there is a no-deal Brexit, it is uncertain as to whether you will be able to continue to run a business at all.
Even if there is a deal, you may not be able to provide services to customers in other Member States: that is still to be decided.

12. PUT SOME WORK INTO LEARNING SPANISH

Whether there is a deal or not, we may be required to re-apply for residencia and/or Residencia de carácter permanente.
We do not know whether a minimum level of Spanish language ability will be required (to date it has not been), but it is a good opportunity to work on the language skills. If nothing else, it opens other social doors and means you don´t have to stick to the same bar, club, or shop

13. THINK ABOUT, OR RE-THINK ABOUT, APPLYING FOR SPANISH CITIZENSHIP

For many people, their British identity and nationality is important to them and the idea of taking out Spanish citizenship has been regarded as ‘only as a last resort’. For some of us, a no deal Brexit might be that ‘last resort’. Spanish citizenship won’t guarantee all the rights you currently hold as an EU citizen (mutual recognition of professional qualifications, for example) but it will guarantee you the right to reside and to work – and as an EU citizen you’d continue to benefit from full free movement rights.
It you are thinking of applying for Spanish citizenship, try to ensure your application is lodged before 29 March 2019. The Spanish authorities do not say how long the process will take but assume at least months (las cosas de pálacio van despacio). In addition, language tests will be required (see point 13). If you’ve already made the application, there is more chance of everything passing through than if you wait till after 29 March when all the rules may change.
Be aware that taking out Spanish citizenship may affect the taxation of certain pensions and you should take good financial advice before applying.

14. MARRY A SPANIARD
This may not be as easy as it once was, with changes to immigration laws, but it might be a solution for you, especially where children are involved.

15. GET YOUR PROFESSIONAL QUALIFICATIONS RECOGNISED NOW

The European Commission has said that, whatever the outcome of the negotiations, Brexit does not affect decisions made pre-Brexit by EU27 countries recognising UK qualifications under the general EU directive on the recognition of professional qualifications (Directive 2005/36/EC). For details of which qualifications are covered see
https://ec.europa.eu/growth/single-market/services/free-movement-professionals/qualificationsrecognition_en
So if you have a UK qualification covered by that Directive and you need to be able to use it, apply to get it recognised before March 30th 2019.

16. ABOVE ALL…DON’T PANIC.

This is about hoping (and working) for the best, while preparing for the worst. Whatever happens, you won’t be alone.

And there you have it. There isn’t a better list anywhere about what to do in a NO Deal Scenario. I would like to say that I think that some kind of deal/arrangement will be agreed in the end because there is too much at stake on both sides of the Brexit divide, BUT I have to admit that I was wrong about Brexit happening in the first place and also about the election of Donald Trump as US president. I was convinced neither would happen. This time I am taking precautions and implementing most of the items on this list. I hope you do too.