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Viewing posts from: November 2000

The when I die folder

By Antony Poole - Topics: Inheritance Tax, Spain, Succession Planning, Wills
This article is published on: 7th July 2020

07.07.20

Discussing how to deal with “life after death” with loved ones is not an easy topic for most families, much less planning for it. While it may sound morbid, creating a “When I Die” folder will save loved ones time and money because nothing is more time consuming and agonizing than sorting through a month’s worth of mail, rifling through cabinets to locate a last will and testament and trying to sort out all the different policies that are accumulated through the years.

While you may be thinking, I don’t have so much that I require a folder. Actually, the opposite is true. A “When I Die” folder is about much more than you’re your assets; it should include debts, funeral and final disposition arrangements, passwords, and letters to loved ones, among other things. The difference between having your files organized or not is about more than just stress; leave behind a mess and it can delay inheritors’ access to funds and cause potentially high legal fees.

The ”When I die” folder can be a physical or digital folder that an individual or family keeps that contains important information that will be needed in the event that someone dies or becomes incapacitated. It serves an important, but often overlooked role in estate planning.

A good start to your folder can be found BELOW to enable you to start one for yourself or for a family member, please feel free to adapt it.

CLICK THE IMAGE BELOW TO DOWNLOAD YOUR COPY AND ORGANISE YOUR ‘FOLDER’

UK share portfolio

Should you require any help with estate planning please feel free to contact me:

Tax Efficient Savings

By Antony Poole - Topics: Costa del Sol, Spain, Spanish Compliant, Tax Efficient Savings
This article is published on: 10th October 2019

10.10.19

You have moved to Spain … and you are now tax resident here.

You do not want the volatility or risk of investments, but want more earnings than you get out of a savings account.

Is there a middle ground solution?

The majority of expats in Spain move over here for the weather, the more relaxed way of life and let’s face it, because they can afford to do it!

The savings, investments and pensions they built up are used to fund their lifestyle in Spain. The problem many are facing now is the changing financial environment; we have seen the pound devalue against the Euro and interest rates drop due to quantative easing, amongst other factors. This is great if you are looking at taking out a loan to start a business or to buy a house, but most expats are past this stage, so not good news.

That sum of money held in savings is absolutely vital, as it is readily accessible and, in the majority of cases, protected from what the markets are doing, i.e. when the markets go down, it doesn’t affect the cash held on deposit! However, the low interest rates mean that, due to inflation (which affects retirees the most), the purchasing power of that cash is going down.

The investment route does give you the possibility of earning more from your cash, but it also takes away all that protection. The markets have been pretty steady for the last few years, however, with quantative easing at the time of writing looking at coming to an end, so will the volatility of investments increase. The problem most expats face is that they do not have the luxury of time on their side to ride out the dips in the markets. Sorry to be so blunt, but it is what it is. When the markets climb it is all good, however, two weeks later when they are down then it can be very stressful, especially if this is when you need to access some of the money held in the investment!

So what do we do? Is there any middle ground?

Yes, there is, but it is not very sexy! It is for people who are willing to sacrifice the spikes in market prices (this is the unsexy part) while limiting exposure to drops in market prices. It is a very prudent scheme that works like this: The investment you make is combined with a pot of around

Tax Efficient Savings

£500 billion and when this investment makes money they hold some of the gain back, so you do not get it. The flip side is that when there is a dip in the performance, they put the profit back in so you are not overly affected. This is called smoothing and this chart reflects how it works. The expected return is published every three months and is currently running at around 5% (August 2019).

This is a popular product in the UK for those who are either looking at putting a portion of their savings somewhere to earn more than just interest, or for those who are looking at a stable investment fund for their pensions. It can also be set up as last life policy, so can be used to limit IHT. Many expats also use this type of policy, which is now available Spanish tax compliant (your English policy is not, so speak to me about making it Spanish compliant). This is a low risk option for those preparing for market volatility and who want a stress free life!

UK State Pension for Expats

By Antony Poole - Topics: Costa del Sol, Spain, State Pensions After BREXIT, UK Pensions
This article is published on: 20th September 2019

20.09.19

The UK Government on the 1st of September 2019 announced that the UK state pension paid to Brits retired in the EU will continue to benefit from triple-lock until 2023.

This means that until 2023 the state pension paid to EU expats will increase by the higher of either 2.5 per cent, average wage growth or the CPI rate of inflation every year. The current new state pension for those who retired after 6 April 2016 is £168.60 per week, or £8,767.20 a year. It means that those living in the EU will see their pensions increase by almost £220 a year until 2023.

The main issue is that this uplift is not given to all expats; it is given to expats in certain countries, but not others, including Australia and Canada. The UK is almost unique in the EU in distinguishing between pensioners who are living in the country and those that are not.

The move has now opened the threat of removing automatic increases that expat pensioners receive as a result of Britain’s EU membership. The cost of the uplift to EU expats is estimated by DWP to cost around £500 million per year, which is a worrying statistic.

The three year extension, regardless of a Brexit deal or not, gives a temporary boost but no long term certainty.

The effect on your income by the freezing of the state pension can be reduced through a tailored savings strategy. Should you like a confidential financial review to maximise your options please contact Antony Poole.