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Are you thinking of selling your UK property or have you sold one recently?

By Tony Delvalle - Topics: France, Property, Tax, UK property
This article is published on: 17th September 2018

17.09.18

Some UK solicitors have failed to inform clients of changes in UK legislation from April 2015, resulting in unexpected late payment penalties from HMRC for failure to complete a form following the sale of their UK property.

Recap of the new legislation
Prior to 6th April 2015, overseas investors and British expats were not required to pay Capital Gains Tax (CGT) on the sale of residential property in the UK, providing that they had been non-resident for 5 years. New legislation was introduced on 6th April 2015 that removed this tax benefit.

Since 6th April 2015, any gains are subject to CGT for non-UK residents. The rate of CGT for non-residents on residential property is, as for UK residents, determined by taxable UK income i.e. 18% basic rate band and 28% above, charged only the gain.

Reporting the gain and paying the tax
You must fill out a Non-Resident Capital Gains Tax (NRCGT) return online and inform HMRC within 30 days of completing the sale.

Those who do not ordinarily file a UK tax return must pay the liability within 30 days. Once you have notified HMRC that the sale has taken place, a reference number is given to make payment.

As a French resident you must also declare to the French tax authority.

The Double Taxation Treaty between the UK and France means that you will not be taxed twice as you will be given a tax credit for any UK CGT paid, but you will be liable to French social charges on any gain.

There is little to mitigate French tax on the sale of property that is not your principal residence. So, it is important to shelter the sale proceeds and other financial assets wherever possible to avoid unnecessary taxes in the future.

One easy way is by using a life assurance policy, a Contrat d’Assurance Vie, which is the favoured vehicle used by millions of French investors. Whilst funds remain within the policy they grow free of Income Tax and Capital Gains Tax. This type of investment is also highly efficient for Inheritance planning, as it is considered to be outside of your estate for inheritance purposes and you are free to name whoever and as many beneficiaries as you wish.

Le Tour de Finance – Saumur 49400

By Amanda Johnson - Topics: France, Le Tour de Finance
This article is published on: 13th September 2018

13.09.18

The Le Tour de Finance roadshows give those either living in France, or in the process of moving here, a great opportunity to speak directly to industry experts who are not normally in direct contact with the public.

Where – Château Gratien Meyer, Route de Monstsoreau, Saumur 49400 (www.gratienmeyer.com/en/ )
When – 14th November, 2018

The event starts at 10.00am and ends at 1.30pm after a free buffet lunch.

It will offer practical guidance on a range of topics including tax efficient investments, pension transfers, estate planning, currency exchange and much more.

Register for this free event or for further information about it by sending an email with your full contact details to: seminars@ltdf.eu, register online on www.ltdf.eu or call +33(0)1 44 83 64 64
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 and I will be glad to help. We do not charge for our financial planning reviews, reports or recommendations.

Next step for the PEPP saga

By Daphne Foulkes - Topics: France, PEPP, tax tips
This article is published on: 4th September 2018

04.09.18

To date, many organisations have submitted detailed responses to the European Commission’s (EC) draft PEPP Regulation, which was published on 29th June 2017. There is strong consensus for the merit of the PEPP, both by the Trilogue participants (European Commission, European Parliament and the Council of Europe) and other stakeholders. However, potential obstacles still exist and, unless pragmatic solutions are found, there is the risk that the PEPP could be launched but the take-up may be low.

Therefore, as the PEPP enters its next stage of Trilogue discussions, it is important that the voices of the potential PEPP providers and distributors are still heard, since these stakeholders are well-placed to highlight practical difficulties that would adversely affect the success of the PEPP. A cross-section of these stakeholders came together at the FECIF European Pensions Institute’s (FEPI) inaugural meeting in June. A FEPI position paper has subsequently been produced, which provides detailed analysis, whilst a brief summary of the FEPI’s views is shown below.

Tax Incentives:

It is very important that a pragmatic alternative solution be agreed by the Trilogue, rather than being left until after the Regulation has been enacted. Theoretically, a fully separate tax regime – i.e. a 29th regime – applicable across all of Europe would be ideal in terms of simplicity and portability. However, it is understood that this is not likely to be accepted by Member States.

Therefore, the FEPI recommends that sub-sections can initially be limited to EET (exempt/exempt/taxed) and TEE (taxed/exempt/exempt), as these would align with the majority of Member States’ local taxation rules. If desired, EEE & TTT sub-sections might also be created for alignment with other Member States, as demand arises. Obviously, the tax regime applicable to any PEPP participant is based on the participant’s tax residency, as is the case for all retirement products today, backed up by the rules of existing Double Taxation Agreements.

Default Investment Option: Two possibilities are now on the table:

A nominal ‘guarantee on capital’, to cover at least the contributions paid (net of fees and charges) as a minimum, which can be extended by the PEPP provider to include inflation protection.
An ‘investment strategy directed at ensuring capital protection of the saver on the basis of a risk mitigation technique’ – more simply known as a life-cycle approach

The opinion of the FEPI is that the PEPP framework should allow for both of the above, if necessary shaped at a local level, according to national rules or custom. As detailed in the FEPI position paper, the guarantee on capital should be real (not nominal). In addition, there is merit in using life-cycle investing as the basis for a default option for retirement planning, even for investors that may have a more cautious attitude to investment risk, depending upon the time horizon of the investor.

Decumulation Options:
Whilst a single regime for the PEPP would be ideal in terms of simplicity and portability, it is understood that this could present issues for Member States if, for example, this resulted in the PEPP being granted a more favourable treatment than a local Personal Pension Product (PPP). Likewise, if a local PPP had more favourable treatment than the PEPP, this would serve as a deterrent for someone investing in a PEPP.

Therefore, the general consensus of the FEPI is that within the framework of the PEPP, decumulation options should be broad, covering all potential pay-out variations, allowing for PEPP providers to shape the PEPP according to local rules.

Notwithstanding the above, the more complex the product, the greater the costs of administration, which will directly impact on the investment returns to the consumer and so an appropriate balance must be found.

Distribution & Advice:
It is arguable that PEPPs should only be sold on an advised basis, even if the saver has chosen the default investment option – whether this be a real capital guarantee or a lifecycle investment option. The impact of national pension entitlements, varying decumulation options and retirement ages, particularly if the PEPP saver has cross-border accumulated benefits, strengthens the need for the PEPP saver to receive appropriate advice, regardless of the amount being saved.

At the very least, the requirement for an appropriateness test should be a pre-requisite in all situations, as a minimum level of saver protection is always necessary. Decisions concerning pension products are numbered amongst the most important that each saver is expected to make in his/her life.

The question now is will the Trilogue be able to reach a consensus on the PEPP that is acceptable to all stakeholders?

Due to the importance of the PEPP, a round table will take place at FECIF’s forthcoming Annual Conference taking place on Wednesday, 17th October 2018 at the Renaissance Brussels Hotel, Belgium. This is a major event and, amongst other issues, will address two significantly important and relevant areas:

Personal retirement planning across the EU, not least the Pan-European Pension Plan
The rise, development, importance and future role of Fintech

The event will ask, and look to answer, numerous key questions, such as: how can we stimulate private pension provision and motivate consumers to take personal responsibility for their financial futures; can the PEPP provide a solution and is a truly pan-European pension possible; can Fintech assist in these areas and, if so, how?

Speakers and participants will be key individuals from EU regulatory bodies and consumer associations, academics and MEPs, as well as numerous major industry figures.

This article first appeared on FECIF website

Daphne Foulke is the Chairperson of FEPI, Board Member of FECIF and Partner at The Spectrum IFA Group

The French Property Exhibition

By Tony Delvalle - Topics: Events, France, mortgages, Property
This article is published on: 29th August 2018

29.08.18

The Spectrum IFA Group at
The French Property Exhibition,
Olympia London, 15th – 16th September 2018

The Spectrum IFA Group is pleased to be exhibiting at The French Property Exhibition on the 15th and 16th September. Established over 25 years ago, this event is a ‘must attend’ for anyone who is serious about buying a property in France and is one of the UK’s most popular and long-running overseas property shows.

The show is the perfect opportunity to find out more about buying your dream home, with experts on hand to offer practical advice on a range of issues, from mortgage, tax, legal and investment matters, to guidance on wills, estate planning, pensions, currency transfers and more.

We are located at Stand 30, where our independent advisers and specialist mortgage representatives, all of whom live and work in France, will be available to answer questions and outline how we can help.
Event details are published on-line in advance of the show, giving you time to plan your day and ensure you get the most out of your visit. All sessions are free to attend, with tickets available on a first come, first served basis.
All visitors receive a complimentary copy of French Property News on arrival and a free show guide. Register for free fast-track entry now!

To book FREE tickets to the 2018 Olympia London event on the 15th & 16th September 2018, please click here.

We look forward to meeting you at stand 30.

Life assurance investment policies and Brexit

By John Lansley - Topics: Assurance Vie, BREXIT, France, Investments
This article is published on: 15th August 2018

15.08.18

Is the uncertainty over Brexit causing you uncertainty over whether to stay in France or not? Whichever side of the Brexit divide you are on, and in the knowledge that “nothing is agreed until everything is agreed”, there are some important issues to be aware of concerning life assurance-based investments and indeed insurance policies in general.

It is possible that ‘equivalence’ rules will apply, and UK insurers will continue to be treated after Brexit as they are currently. But bear in mind that some of the comments in this article are made against a background of a possible ‘no-deal’ scenario, where financial services would be hit hard, so it’s important to look objectively at some of the likely implications when considering your future options.

Firstly, in order to set the scene, Brexit is set to take effect at the end of next March, following which there may be a transitional period of 15 months, during which much will continue as at present. For many of us the most important question is whether we are able to remain in France (or other EU27 country) or whether we will have to, or simply wish to, return to the UK.

With such a move comes the question of if and when you cease to be tax resident in France and instead become UK tax resident again. This is a complex area, and of course many will have been spending large parts of each year in both countries, perhaps technically risking UK residence already, and clearly this is an issue that many will need to address in detail.

For those who have investments held via life policies, and who enjoy all the benefits these offer, a change in tax residence is an event that necessitates an early review of such investments in order to determine whether they can continue as they are or whether any changes need to be considered, and this is a matter you should discuss with your financial adviser at the earliest opportunity.

French Assurances Vie
These are offered by insurance companies in France, Ireland and Luxembourg, and provide considerable tax and succession planning benefits. They also provide access to diverse investment possibilities in different currencies, and French law even allows you to hold individual listed company shares, so certain assurance vie contracts provide this facility, which can be very useful.

However, it’s important to realise that such flexibility will be punished by the UK’s HMRC if you become UK tax resident – this is because such a policy would be regarded as ‘highly personalised’ (see also below) and would be deemed to generate profits of 15% pa, which would be subject to your highest income tax rate. This would be the case even if losses were made during the year, and is clearly something to be avoided if at all possible.

You may not even use the facility to hold shares, and hold only funds, unit trusts or similar, but fortunately this treatment can be avoided by converting the policy to a ‘collectives only’ version before moving to the UK. SEB Life International, a major provider of such policies, offers an easy conversion process for existing policyholders and, if you hold one of their policies, it would be worth asking yourself whether requesting this conversion is appropriate – if you don’t ever intend to hold shares, and there is a vague possibility of becoming UK resident in future, it might be worth acting now.

Other assurance vie providers don’t always offer such investment flexibility, and so are unlikely to be affected, but if you are unsure you should check with your financial adviser.

UK Single Premium Policies
Many people in the UK own these as they provide significant UK tax advantages, and operate in a similar way to assurances vie (although the precise treatment is different). As is the case with French assurances vie and similar local policies in other countries, these allow the (relatively) tax-free roll up of income and gains inside the policy, and much less onerous taxation of withdrawals than is the case with income and gains from conventional investment holdings.

For those who have moved to France and who still hold such policies, the tax treatment can vary. There is no means by which profits can be taxed as long as these remain within the policy; however, withdrawals and encashment proceeds need to be declared to the tax authorities and, since tax treatment can vary from area to area, it is as well to assume that any such profits will be fully taxable.

In the past, there has perhaps been some inconsistency in how the rules are applied, but it is extremely likely that British people living in France after Brexit will find their affairs subjected to greater scrutiny, and such policies will face a much more certain and consistent treatment.

An important additional point is that UK policies suffer a form of UK corporation tax on the profits generated by the insurance company (and which therefore reduces the investment reward), which can’t be reclaimed or set against a French income tax liability, so they therefore suffer a form of double taxation that cannot be avoided.

Returning to the UK will mean that the tax benefits will continue to be available, but for those who remain in France it is important to review such policies as soon as possible – indeed, the best way forward might be to surrender the policies before Brexit and reinvest the proceeds via an assurance vie, so that all future profits will enjoy the favourable assurance vie tax regime. However, again, this is a complex area and is deserving of proper professional advice, depending on your own personal circumstances.

Offshore Policies
These are policies issued by insurance companies in the Isle of Man, Guernsey and elsewhere. These jurisdictions are not part of the UK, and hence currently not part of the EU either, but which have over many years seen a large number of policies sold to people resident in the UK and in various expatriate locations around the world.

There are two types – highly personalised (often referred to as personal portfolio bonds) and ‘collectives-only’, similar of course to the two types of assurances vie as described above.

For the UK resident, the highly personalised version is deemed to generate a gain of 15% pa, as described above, but the collectives version is treated in a similar way to the UK Single Premium Policy, with the ability to take up to 5% pa (cumulative) on a tax-deferred basis and excesses being subject to your highest income tax rate. UK policies enjoy a tax credit, which reduces the actual tax paid, but offshore policies see their excess withdrawals fully exposed because there is no tax credit given.

There are a number of ways in which tax can be mitigated, and which are beyond the scope of this article. However, returning to the UK will involve a careful review of all such policies to ensure that unnecessary tax bills are avoided, and fortunately most providers will allow you to convert the highly personalised policy to a collectives version before becoming UK resident, as long as you accept certain investment restrictions.

Anyone resident in France who holds such a policy and who intends to remain in France after Brexit should give careful consideration to whether the policy should be retained or whether it might be best to surrender it, pay whatever French tax is due, and then reinvest using, for example, an assurance vie in order to ensure ongoing tax-efficiency in France. For some, this might be a costly exercise, but it would be a one-off event and would ensure full future compliance in France at a time when many aspects of people’s affairs are subject to higher levels of scrutiny.

Policies Held In Trust
In some cases, UK and offshore life policies were set up in a simple trust, provided by the insurance company. Trusts have enjoyed a less than favourable treatment in France in recent years, but can still provide tax advantages in the UK. So, if by chance you have such a policy, whether you intend to return to the UK or remain in France will determine what action should be taken.

Other UK Insurance Policies
On moving to France, many continue to hold UK insurance policies of different types – perhaps an ongoing endowment policy, other life insurance, medical cover, car insurance and so on. It has always been important to advise your insurer of your change of residence in such a situation – simply providing a change of address on its own is not good enough, because a change of residence often means a change in the risk and hence a change in the premium. Only providing change of address details can effectively result in the insurer having a reason to reject any future claim.

However, the post-Brexit situation will mean that such continuing policies may not be effective at all, even if your insurer knows you are resident outside the UK. This is because, as with Single Premium Policies, the provider will be based outside the EU and, unless the equivalence provisions or similar are confirmed, the policies may cease to provide cover.

Other Brexit Issues
Brexit has affected, and will continue to affect, exchange rates and investments. We have seen how Sterling dropped against the Euro immediately after the referendum, as it has on other occasions of course, and this has had an immediate and lasting impact on UK sourced income and pensions for those living in the Eurozone.

What can be done? The use of specialist currency exchange providers can help but it also makes sense to reduce the overall risk by reducing reliance on such Sterling sources, wherever possible. This is not so easy if you rely on UK pensions, or property investments, but a detailed review of your assets would be an important step to take.

As for investment, the fall in Sterling was matched by a rise in the UK stockmarket, and generally the FTSE100 has continued to do well because of the large number of companies that enjoy US Dollar income streams, and which have reaped the benefits of a low Pound. But the trade and other problems Brexit is creating will mean that British businesses are likely to experience many difficulties, and therefore their ability to generate profits for shareholders (such as funds that invest in the UK and UK pension schemes) are likely to be hit.

This could be seen as a contentious issue but reliance on UK investments will exacerbate the problems caused by over-reliance on Sterling, and a more diverse approach would probably be preferable.

One area of particular interest is the decision whether or not to transfer your UK pension to a QROPS provider, as this can help address the issues of currency and investment strategy by bringing your pension capital more directly under your control.

This is another complex area that requires very specific professional involvement, but your ability to use QROPS could be curtailed after Brexit. Already, transfers to non-EEA providers have been hit by a 25% exit charge, and this may be applied across the board after Brexit takes effect.

Conclusions
Change brings threats and opportunities, and can be especially challenging when you have retired and have made great efforts to adapt to what has perhaps been a very significant lifestyle change.

Fortunately, as ever, an awareness of the likely problems means you are better equipped to make suitable preparations. Hopefully this article has shone a light on some areas that could have a very significant impact on your finances and, more importantly, has suggested possible solutions.

Inheritance Planning in France

By Sue Regan - Topics: France, Inheritance Tax, Le Tour de Finance, Wills
This article is published on: 3rd August 2018

03.08.18

Despite the importance of making sure one’s affairs are in order for the inevitability of our demise, very few people actively seek advice in this area and, as a result, are unaware of the potential difficulties ahead for their families and heirs, not to mention potential tax bills which can be quite substantial for certain classes of beneficiary.

The basic rule is, if you are resident in France, you are considered also to be domiciled in France for inheritance purposes and your worldwide estate becomes taxable in France, where the tax rates depend upon the relationship to your beneficiaries.

Fortunately, there is no inheritance tax between spouses and the allowance between a parent and a child is reasonably generous, currently €100,000 per child, per parent. For anything left to other beneficiaries, the allowances are considerably less. In particular, for step-children and other non-related beneficiaries, the allowance is only €1,594 and the tax rate on anything above that is an eye-watering 60%!

There are strict rules on succession and children are considered to be ‘protected heirs’ and so are entitled to inherit a proportion of each of their parents’ estates. For example, if you have one child, the proportion is half; two children, one-third each; and if you have three or more children, then three-quarters of your estate must be divided equally between them.

You are free to pass on the rest of your estate (the disposable part) to whoever you wish through a French will and, in the absence of making a will, if you have a surviving spouse, he/she would be entitled to 25% of your estate.
You may also be considered domiciled in your ‘home country’ and if so, this could cause some confusion, since your home country may also have the right to charge succession taxes on your death. However, France has a number of Double Taxation Treaties (DTT) with other countries covering inheritance. In such a case, the DTT will set out the rules that apply (basically, ‘which’ country has the right to tax ‘what’ assets).

For example, the 1963 DTT between France and the UK, specifies that the deceased’s total estate will be devolved and taxed in accordance with the person’s place of residence at the time of death, with the exception of any property assets that are sited in the other country.

Therefore, for a UK national who is resident in France, who has retained a property in the UK (and does not own any other property outside of France), the situation would be that:
• any French property, plus his/her total financial assets, would be taxed in accordance with French law; and

• the UK property would be taxed in accordance with UK law, although in theory, the French notaire can take this asset into account when considering the fair distribution of all other assets to any ‘protected heirs’ (i.e. children).

If a DTT covering inheritance does not exist between France and the other country, with which the French resident person has an interest, this could result in double taxation, if the ‘home’ country also has the right to tax the person’s estate.
Hence, when people become French resident, there are usually two issues:
• how to protect the survivor; and
• how to mitigate the potential French inheritance taxes for other beneficiaries.

European Succession Regulation No. 650/2012
Many of you will no doubt have heard about the EU Succession Regulations that came into effect in 2015 whereby the default situation is that it is the law of your place of habitual residence that applies to your estates. However, you can elect for the inheritance law of your country of nationality to apply to your estate by specifying this in a French will. This is effectively one way of getting around the issue of ‘protected heirs’ for some expats living in France.

However, the UK opted out of the Regulations and therefore, it is not yet certain how effective the EU Regulations will be until there have been some test cases. I would always recommend that you discuss this in more detail with a notaire who can advise you on the subject of French wills.

If, after taking the advice of a notaire, it transpires that this is the best course of action for you to achieve your inheritance objectives, it is important to note that the French inheritance tax rules will still apply. Therefore, even though you have the freedom to decide who inherits your estate, this will not reduce the potential inheritance tax liability on your chosen beneficiaries, which, as mentioned above, could potentially be very high for a step-child. Hence, there will still be a need to shelter financial assets from French inheritance taxes.

Inheritance planning for French residency can be very complex, especially where there are children from previous relationships. This is often the starting point of my discussions with a prospective client. Most couples with children that I come across want their spouse or partner to inherit everything upon first death and for the children to inherit on second death. This isn’t possible under standard French Succession law, but it can be achieved by putting in place strategic planning, which is something on which we can provide advice.

If you would welcome a confidential discussion about your own inheritance planning, the mitigation of inheritance taxes for your chosen beneficiaries or a general chat about your overall financial situation, please feel free to contact me by e-mail at sue.regan@spectrum-ifa.com or by telephone on 04 67 24 90 95.

In addition, you can meet me and other members of the Spectrum team at the Tour de Finance, which is once again coming to the stunning Domaine Gayda in Brugairolles 11300. This year’s event will take place on Friday 5th October 2018. Places are by reservation only and it is always well attended so book your place early by giving me a call or dropping me an email. Our speakers will be presenting updates and outlooks on a broad range of subjects, including:

Brexit
Financial Markets
Assurance Vie
Pensions/QROPS
French Tax Issues
Currency Exchange

So, if you are concerned about your investments and pensions in a post-Brexit world why not join us at this very popular event where you can meet the team in person and listen to a number of industry experts in the world of financial advice.

The Spectrum IFA Group advisers do not charge any fees directly to clients for their time or for advice given, as can be seen from our Client Charter at www.spectrum-ifa.com/spectrum-ifa-client-charter/

The above outline is provided for information purposes only and does not constitute advice or a recommendation from The Spectrum IFA Group to take any particular action to mitigate the effects of French taxes.

Should I make a tax return? If so, why?

By Peter Brooke - Topics: France, Tax, tax advice, tax tips, Yachting
This article is published on: 16th June 2018

16.06.18

By Peter Brooke & Patrick Maflin of Marine Accounts

Understanding tax liability is still a big issue for yacht crew; in fact, the confusion mainly comes from the lack of clarity about being “Resident” or “Non-Resident” somewhere. Many crew members are still putting their heads in the sand and ignoring this issue; in our humble opinion this needs a cross-industry culture change, as the repercussions for continuing to ignore tax are becoming more onerous and punitive.

So why should I bother declaring my income?
• You will avoid massive penalties, fees and interest on the taxes that you ‘might’ owe should you be investigated later.
• Your info is out there: The Automatic Exchange of Information means that all your financial information is already being shared between governments.
• Common Reporting Standards: All financial institutions such as banks, insurance companies, and investment firms are required, by law, to attain, keep and share residency information for all account holders.
• I want a mortgage: Most lenders now require proof of earnings in the form of tax returns.
• I live on a yacht and so am not resident anywhere! Does your home authority agree with your assessment of your situation? Get it in writing!

On this last point, it is a huge misconception that just because you believe that you aren’t resident somewhere, the tax authorities will not be interested in you. The onus is firmly on the individual to prove non-residency, not on the authorities to prove residency. If you can’t present a convincing case, it is highly likely that the tax authority with which you have that link will deem you to be a resident. If you haven’t declared your income to them voluntarily, they will look less favourably at your situation and can apply significant fines and interest.

So where should I declare?
If in doubt look at it in this order:
1. Time spent – if you spend time ashore where are you spending it? Keep a diary/spreadsheet of EVERY day.
2. Assets – where is most of your wealth kept?
3. Family – do you have major links to a certain country (especially important if you have children)?
4. Nationality – if you are not resident in a country due to time spent, assets or family links it is likely you should be declaring your income to your ‘home’ authority – i.e. where you are from originally.

Don’t wait to be called upon by any ‘linked jurisdictions’, be proactive, understand the tax residency rules of all of these ‘linked jurisdictions’ and voluntarily declare to the most strongly linked one. It will help you sleep at night and could save thousands in fees and interest, as well as avoid black marks on your record.

This article is for information only and should not be considered as advice. Marine Accounts assist crew with tax residency in many jurisdictions.

Peter Brooke is a financial adviser to the yachting community with the Spectrum IFA Group. Spectrum has created HORIZONS, a unique financial solution just for yachts and their crew at
www.my-Horizons.com or contact@my-horizons.com or peter.brooke@spectrum-ifa.com

The Importance of having a Local Financial Adviser

By Sue Regan - Topics: Financial Planning, Financial Review, France
This article is published on: 15th June 2018

15.06.18

Moving to another country is one of the biggest decisions that anyone is likely to make, especially to a country where the language is not your native tongue. Most of the expats I meet say that the hardest thing about moving to France is getting to grips with the language, and I include myself in this.

From my own experience I know that lack of fluency is often a cause of frustration, confusion and anxiety, especially when dealing with bureaucracy, medical matters and finance. Fortunately, there are people and businesses out there who can help.

The Spectrum IFA Group are independent financial advisers and our area of expertise covers the provision of regulated advice on the tax-efficient investment of financial assets, pensions and inheritance planning. We are a French company, regulated in France, which means our business activities will not be affected by BREXIT.

As well as being regulated in the county in which he or she is advising a client, a good financial adviser should also have the relevant knowledge of the tax framework of that country and the tax treatment of suitable products in order to give the most appropriate, tax-efficient advice. You probably wouldn’t have sought the advice of a French regulated IFA to manage your UK investments when you lived in the UK so it doesn’t make sense to expect a UK regulated IFA to advise you when living in a different tax jurisdiction to the one in which they are qualified and regulated.

The Process
In this age of online banking, tele-marketing and robo-advice, we believe that the old- fashioned method of a face to face meeting, to discuss your individual circumstances and financial objectives, plays a vital part in establishing the trust between the client and the adviser, and that should be the number one priority.

An initial meeting with a new client can take up to three hours – there’s a lot to discuss, such as:

  • Your personal and family situation
  • Your income – your requirements now and in the future
  • Your pension provision
  • Your inheritance wishes – do you have wills? Are they set up correctly for French residency? Who do you want to inherit?
  • Your property assets
  • Your financial assets – bank deposits, investments, Trust assets, business interests – where are they situated? Are they tax-efficient for French residency?
  • Insurance policies
  • Your state of health and provision for healthcare
  • Your priorities now and in the future
  • Your financial objectives and attitude to risk

By the time we have gone through all the above, and usually swapped a few stories about our lives, both the client and I have a very good idea as to whether we feel comfortable with each other and that we can work well together.
If, after this meeting, I believe that I can help you achieve your objectives, I will go away and put together my thoughts and recommendations in a report to you. We do not charge any fees for meetings, research or preparing reports and making recommendations. We will meet again to discuss, in detail, any recommendations made, and the product charges will be fully explained. If you decide to go ahead with a recommendation and become a client of Spectrum, we will be remunerated by the product provider.
This is just the beginning of the relationship. Things generally change over time, such as pensions and tax legislation, investment performance, physical well-being, family situations, income and capital needs. An important part of my job is to ensure that we meet periodically, at least once a year, to review your circumstances and make sure that your finances are on track to meet your current needs and longer term goals.
If you would like to have a confidential discussion about your financial situation, please contact Sue Regan either by e-mail at sue.regan@spectrum-ifa.com or by telephone on 04 67 24 90 95. The Spectrum IFA Group advisers do not charge any fees directly to clients for their time or for advice given, as can be seen from our Client Charter here

Spectrum’s Daphne Foulkes appointed to Chair of the European Pensions Institute

By Daphne Foulkes - Topics: FECIF, France, Spectrum-IFA Group
This article is published on: 12th June 2018

12.06.18

Spectrum’s Daphne Foulkes, a board member of FECIF (The European Federation of Financial Intermediaries and Financial Advisers) has been appointed to Chair the newly formed European Pensions Institute (see attached FECIF press release).

We are delighted with this recognition of Daphne’s skills and work representing European IFAs within the trade body. Daphne will be taking on this role in addition to her Spectrum duties.

The European Federation of Financial Advisers and Financial Intermediaries (FECIF) was chartered in June 1999 for the defence and promotion of the role of financial advisers and intermediaries in Europe.

FECIF is an independent and non-profit-making organisation exclusively at the service of its financial adviser and intermediary members, who are from the 28 European Union member states, plus Switzerland; it is the only European body representing European financial advisers and intermediaries. FECIF is based in Brussels, at the heart of Europe.

Retiring & income in retirement

By Derek Winsland - Topics: France, Pensions, QROPS, Retirement, State Pensions After BREXIT, UK Pensions
This article is published on: 8th June 2018

08.06.18

A major part of my role as a Financial Planner involves helping clients move towards retirement and advising those in retirement about the best and most tax-efficient way of generating their income once they stop work.

One question I’m often asked is how much money I should save to enable me to retire comfortably. A good question, it depends on what constitutes a comfortable retirement for that particular person. It’s generally quite a straightforward discussion: how much do you need now, and what will change as you approach retirement (mortgages redeemed, no more school or university fees, travel expenses to and from work for instance). Factor in extra expenses for pursuing hobbies, travelling etc. and we begin to build a picture of what retirement will look like and how long the active retirement period will last for.

In the UK, a Which? survey concluded that, in the UK at least, a couple entering retirement needed £26,000 a year to live comfortably. OK, that’s the UK and not necessarily representative of life here in France, but it is a basis for opening a discussion. The next consideration is to identify what the sources of income are – likely there will be an entitlement to UK state pension, possibly some French state pension and maybe rental income form letting out the old UK home, or Gites in France.

For those people actively thinking about and planning for retirement, it is also likely there will be some private pension provision, perhaps even membership of a final salary pension from time spent working for an old employer. And then there are the savings you’ve set aside for the day when you can put down those work tools, and say “That’s it, I’ve done my bit”.

But what income can I reasonably expect those savings to generate to supplement the other sources of income. The Institute and Faculty of Actuaries have ruminated over this question (well they would, wouldn’t they! I can imagine the topic of conversation going around the dinner table at their annual conference). The conclusion they’ve come to is (not surprisingly) based on the life expectancy of the retiree. Retiring at age 55, they believe you should draw down only 3% of your capital each year to ensure that your money doesn’t run out. This then rises to 3.5% if retiring at age 65. Other financial experts believe the figures could rise to 5% per year for a 65-year-old. This then assumes that your capital is invested to generate returns greater than the rate of inflation.

The options for the individual facing an income shortfall include:

    1. Increasing your savings
    1. Decreasing your retirement income expectation
    1. Delaying retirement
    1. Exploring alternative ways of investing available capital and pensions to obtain growth greater than inflation and certainly better than bank interest

A Financial Planner can draw up a future forecast using established assumptions for inflation, rates of investment return, the most tax efficient way of drawing down or generating income, using either life expectancy tables or any other age after discussing your family mortality history with you. This will give you your ‘number’, the amount of capital you’ll need to live comfortably.

The Office for National Statistics has recently launched an online tool on its website designed to tell you what your life expectancy is. If you’re curious, click here:

Once completed this Financial Plan should be implemented to address any recommendations for re-structuring the existing assets, and thereafter reviewed yearly, updating the investment returns achieved and the impact this has on the capital, checking any changes that need to be made to the assumptions and making any amendments that you want included. Long-lost pension funds will be identified, and the expected benefits brought into the plan, and again, any issues addressed. The move is towards handing the responsibility of retirement over to the retiree, so there is not a better time to consult a fully qualified financial planner.

If you have personal or financial circumstances that you feel may benefit from a financial planning review, please contact me direct on the number below. You can also contact me by email at derek.winsland@spectrum-ifa.com or call our office in Limoux to make an appointment. Alternatively, I conduct a drop-in clinic most Fridays (holidays excepting), when you can pop in to speak to me. Our office telephone number is 04 68 31 14 10.