☏ +34 93 665 85 96  |  ✑ info@spectrum-ifa.com
Viewing posts categorised under: Spain

New registration procedure for residents (TIE)

By Chris Webb - Topics: Spain, UK bank accounts
This article is published on: 6th October 2020

06.10.20

Well, summer is well and truly over. After a scorching few months, which at times was unbearable, we´re now being treated to what I always tell the kids is good old English weather. The heavens opened, the sky turned a miserable shade of grey and the temperature dropped from the mid 30´s to around 16 degrees in the space of 48 hours.

We had a little respite and it warmed up a bit, but as I´m writing this the rain is steadily falling again.

So far 2020 has been a strange year. We started off with Brexit at the forefront of our minds, but that quickly turned into a Covid 19 panic. Summer seemed more relaxed and it appeared we were through the worst but now Madrid is heading back into a type of lockdown, although not as severe as in March.

So what´s new? Well, the latest shock news to hit the front pages is the threat of UK banks closing down accounts for EU residents. On top of that there is the new registration procedure for residents (TIE) which came into force in July.

Do you have a bank account in the UK but live in Spain?

Do you have a bank account in the UK but live in Spain?

By now, I am sure you have all seen the headline news saying that a number of UK banks are writing to their clients living in the EU to close down their UK banks accounts.

The news is true, we have had clients that have already received notification, but this change affects different banks and different EU countries. You probably already know that the blame for this decision lies purely with Brexit!

Looking at the information available it seems that Spain may get off lightly with this as it doesn’t get a mention, but only time will tell whether we face the same issue.

Brexit has put these banks in a difficult position, leaving them to calculate the cost and inconvenience of managing EU resident clients. Once Britain is out of the EU marketplace, the banks will be forced to adhere to individual regulations which differ from country to country. If they want to continue to service clients in any EU state, they will need the relevant licences to do so. But if it is not viable for them to arrange this, it will lead to account closures.

This is going to cause all manner of problems for those that still rely on a UK bank account. It could be for rental income to be received, bills to be paid or just a spending account for when you visit family and friends. If you are affected by these closures there are no other UK options available to you, as you can´t open a new bank account if you´re not a resident there.

modelo 720

They may offer you an international bank account, but that is yet to be determined. If you find yourself in this position then get in touch; The Spectrum IFA Group have a great working relationship with Standard Bank who offer an international account in multiple currencies, which may be the ideal solution to your predicament.

There is a great article on Money Saving Expert that also has a useful graphic detailing the latest info from a number of banks. Click on this link to see more:
www.moneysavingexpert.com/news/2020/09/thousands-of-british-expats-face-uk-account-closures/

The second “new thing” for us is the registration procedure for a residence card in Spain. We are all used to the green A4 or credit card sized document, but now we have the new TIE for British national’s post Brexit. We are being advised that making the change is optional and the green cards remain valid, but in my opinion it is only a matter of time before it becomes mandatory.

You can apply for the new TIE by following these three links:
EX23 – TIE Application Form
extranjeros.mitramiss.gob.es/es/ModelosSolicitudes/Mod_solicitudes2/index.html

Modelo 790-12 – Payment Form
sede.policia.gob.es/Tasa790_012/

Cita Previa
sede.administracionespublicas.gob.es/icpplus/index.html

I have already been through the process of changing to the TIE and I am happy to say it was the easiest piece of Spanish administration I have ever dealt with in nearly 8 years. If you want further information, I have a great article I can send on which was put together by CAB Spain and explains the exchange process as well as applying as a new resident.

Comment prendre sa retraite à 50 ans?

By Cedric Privat - Topics: Barcelona, Financial Planning, Pensions, Retire in Spain, Retirement, Spain
This article is published on: 30th September 2020

30.09.20

Qui n’a pas rêvé un jour de pouvoir arrêter de travailler avant l’âge légal de la retraite? 50, 40, 30 ans? Et si ce rêve était réalisable?

La question peut faire sourire, surtout si vous résidez comme moi en Espagne à Barcelone, avec un prix de l’immobilier exorbitant et des salaires souvent moins élevés qu’en France.
Pourtant, de plus en plus de personnes y arrivent, alors pourquoi pas vous?

Le Frugalisme :
Le mouvement FIRE (Financial Independance, Retire Early), né aux Etats-Unis dans les années 2000, défend le principe de vivre simplement et de faire fructifier son argent pour pouvoir vivre de ses rentes.
Il s’inscrit dans un mouvement économiste du Frugalisme “Qui se nourrit de peu, qui vit d’une manière simple.” (Larousse)
Pourquoi ne pas s’en inspirer?

Comment?
• Économiser : s’acquitter de toute dette (surtout celle de votre bien immobilier), réduire son train de vie, éliminer les frais superflus, supprimer certains loisirs, épargner davantage dès le 1er du mois.
• Définir un budget : il sera indispensable de bien calculer vos besoins mensuels afin de définir votre patrimoine retraite et ainsi fixer votre objectif.
• Investir : en plus de votre résidence principale vous devrez investir judicieusement l’argent épargné dans des placements financiers, des actions ou de l’immobilier.

Les frugalistes suivent une « règle d’or » dite des 4% : disposer d’un patrimoine au moins 25 fois supérieurs au montant de ses dépenses annuelles. Si elles s’élèvent à 2.000 euros par mois, il faudra par exemple un patrimoine de 600.000 euros, permettant de vivre des 4% de rendement généré.

State pension systems

Quand commencer?
Bien évidemment, le plus tôt possible. Une retraite anticipée deviendra vite un rêve oublié si on débute trop tard, mais tout dépendra également de votre implication à la cause.
Les nouvelles générations se soucient de plus en plus tôt de leur retraite et pour cause; les prévisions des pensions publiques de retraite sont à la baisse et l’âge légal de départ à la retraite ne fait qu’augmenter.
Le frugalisme demandera une forte réduction de vos dépenses, il est souvent accompagné par une conscience écologique afin de se tourner vers un mode de vie décent et responsable.
Nos sociétés capitalistes amènent de plus en plus les individus à se poser des questions sur le rapport qu’ils ont à l’argent et au travail.

Qui peut appliquer cette méthode ?
Bien évidemment, toute retraite anticipée sera plus facilement accessible aux classes moyennes et supérieures. Pour beaucoup, il est déjà suffisamment compliqué de mettre un peu d’argent de côté.
Une recherche Google rapide vous permettra de lire les expériences de nombreux “jeunes retraités” à travers le globe.
Les méthodes divergent, mais la discipline est de rigueur. Certains retournent vivre chez leurs parents quelques années et économisent 70 % de leur salaire, d’autres travaillent pendant 10 ou 15 ans à un rythme à la limite du soutenable, certains vont compter des années chaque centime possible et enfin les plus privilégiés qui reçoivent un salaire confortable vont tout simplement faire plus attention, s’organiser et investir malin.

Cette méthode vous intéresse mais vous vous posez des questions ?

N’hésitez pas à prendre conseil auprès de professionnels à votre écoute.

Le groupe Spectrum à Barcelone vous propose d’effectuer un audit sans frais ni engagement afin de mieux vous organiser dans la préparation de votre retraite, anticipée ou non.

Nous vous aiderons ensuite à comparer et choisir le placement financier le mieux adapté à votre situation et préférence.

There is more to (investment) life than the FTSE100

By John Hayward - Topics: Costa Blanca, FTSE stock market, investment diversification, Investment Risk, Spain, Stock Markets
This article is published on: 2nd September 2020

02.09.20

Dependence on the UK stockmarket has damaged wealth

In the last 5 months, life has not been easy. We have all had to change our lifestyles to one extent or another and we don´t know exactly what lengths we will need to go to in order to remain safe. Hopefully the worst has passed and we can get back to thinking about our future in a positive way and not have to constantly worry about coronavirus.

Aside from the pain of having to wear a mask, in the last 5 months I have had concerns about work, I have learned new words and phrases linked to coronavirus, and I have obtained a new Spanish residence card. Certain things have not changed during this time. People read the same newspapers, watch the same television programmes, express their disdain for Donald Trump, and base their investment decisions on the performance of the FTSE100.

New investment trends

Whilst certain business sectors have suffered over the last few months, others have prospered and have a positive outlook. Technology has come to the fore, both in terms of purchasing goods and communication.

Investments and the FTSE100

Aside from the investment vehicle and the tax structure your investments and pension funds are held within, it is important that the investments themselves are well managed. Some people have held off investing through fear of coronavirus. There are also those who had previously delayed investment decisions until Brexit had been sorted out. The consequence of this has been that they have missed out on growth over the last 5 years, even with the downturn in March/April, as well as suffering from the real loss through inflation if they have left their cash in the bank.

Most UK nationals refer to the FTSE100 to find out what is happening with stockmarkets. This is mainly due to it being the one we, as followers of British financial news, are most familiar with. The FTSE100 has been lagging behind global stockmarkets in the last few months. However, the FTSE100, the index of the top 100 companies in the UK, only represents a small percentage of global stockmarkets. Almost 40% of the 100 are banks/financial, oil/energy and consumer staples which include retailers. All of these sectors have been hit by coronavirus. It is overweight in certain sectors and, although they are all big companies, their recent losses are reflected in the movement of the index. Banks especially have had a rough time. Therefore, it is far from being a stockmarket index which represents all global markets and sectors. I appreciate that it is an indicator, but it shouldn´t be used as a decision maker.

You will see from the chart below that by referring to, or even relying upon, the performance of the FTSE100 in order to make investment decisions could have been a mistake. It compares the FTSE100 with the US S&P500 and Nasdaq, and Japan´s Nikkei. The chart runs from the start of 2020. The FTSE100 is D, the blue line.

FTSE100 comparison

Not only has it been important to be aware of global stockmarket performance, but there are other sectors and assets to invest in. For example, gold, that was not immune to the panic in March, has shown itself to be in demand as a safe haven.

Gold prices

Well managed investment portfolios

I am pleased to say that all my invested clients are better off now than they were at the end of March. The most pleasing thing is that not only did they suffer relatively low falls in March but now many have made a complete recovery. We do not push people towards FTSE100 tracker funds. They may be cheaper but that is because there is little or no management. As is often the case, cheapest is not the best.

Conclusion

Active investment management has proven itself to be the best approach, certainly in problematic times. We recommend investment managers who are able to access global shares and other assets. They can buy and sell on a daily basis and not commit you to funds that can become restricted or illiquid. Many of my clients have been pleasantly surprised by the “bounce” of their investment value since March. The FTSE100 has struggled and it has been assumed that this is the case generally. They are also surprised how the United States stockmarkets, with all of the Trump and election issues, have done so well. At times there seems little or no correlation between day to day life and stockmarket performance. In fact, history has taught us that when there is panic and depression, stockmarkets tend to do well.

Over the next few weeks I shall be publishing more articles, so stay tuned:
• The expense of using your bank for insurances
• Life insurance for general living expenses and Spanish inheritance tax
• Currency exchange – your ‘free’ facility could be costing you thousands
• Applying for the new TIE – not compulsory for some but could be beneficial

With investments, there are plans that I can recommend that are clear to understand and tax efficient, and I explain the full details before you commit. The Spectrum IFA Group is not tied to any one company and I can offer you independent, impartial advice and guidance.

Contact me today to find out how I can help you make more from your money, protecting your income streams against inflation and low interest rates, or for any other financial and tax planning information, at john.hayward@spectrum-ifa.com or call or WhatsApp (+34) 618 204 731.

Living in Spain after BREXIT

By Chris Burke - Topics: Barcelona, BREXIT, National Insurance Contributions, Spain, UK Pensions
This article is published on: 27th August 2020

27.08.20

After the results from the UK’s General Election, it seems we are closer to Brexit than ever before, so are you prepared for it living in Spain?

Documentation to remain in Spain

There are many rumours among non-Spanish people of what you need to do to stay in Spain should Brexit happen. The response from the Council recently has been, should you hold a NIE and an Empadronamiento, you are proving you are resident in Spain, so for now these should suffice. However, if Brexit does go ahead, Spain could draw a ‘Stay in Spain’ line in the sand which would then need adhering to. In the worst case scenario, a renewable 90-day tourist visa would give you time to adhere to whatever the new rules are. Spain has said publicly it will reciprocate what the UK does, and the UK knows there are far more British people living in Spain than the other way around in the UK.

UK Private and Corporate Pensions

The current HMRC rules state that if you take advantage of moving your UK pension abroad it must be to either where you are resident OR in the EU (due to the UK being in the EU). If this is not the case, you would have to pay 25% tax on the pension amount. Therefore, it is very likely that as the UK would be leaving the EU, these rules would not be met and the 25% tax charge would start to apply to pension movements outside of the UK. This could be the last chance to evaluate whether it’s better for you to move your pension or not and take advantage of the potential benefits, including being outside of UK law and taxes.

National Insurance Contributions

If you were to start receiving your State pension now, you would approach the Spanish authorities and they would contact the UK for their part of the contribution, taking both into account. Before the UK joined the EU, you would contact each country individually and receive what they were due to pay you. If this becomes the case again, for many British people the UK part of their State pension would potentially be more important, as it is likely to be the bulk of what you receive. We don’t know how Spain will act with regard to state pension benefits to foreigners; therefore it would make sense to manage the UK element well if this is your largest subscription.

I recommend two things here; firstly check what you have in the UK so you know where you are. You can do that here:

www.gov.uk/check-national-insurance-record

You can contact the HMRC about contributing overseas voluntary contributions at a greatly discounted rate, from £11 a month: you can even buy ‘years’ to catch up:

www.gov.uk/voluntary-national-insurance-contributions/who-can-pay-voluntary-contributions

I have mentioned this in Newsletters before, but it really is a great thing to do, both mathematically and for peace of mind. Many people I meet living away from the UK have ‘broken’ years of contributions which is leaving themselves open to problems in retirement.

TIP: If you have an NI number, you do not necessarily have to be British to do this.

Investments/stocks/shares/savings

Time apportionment relief

Statistically, in 75% of British expat couples living abroad, at least one of them will return to live in the UK. It remains to be seen whether this changes if the UK leaves the EU, however, you can easily save yourself some serious tax if you have this in your plan of eventualities.

You can, in effect, give yourself 5% tax relief for every year you spend outside the UK by positioning your investments/savings correctly. Then, upon your return, you can take this tax relief when you are ready, such as in the following example:

Mr and Mrs Brown invested £200,000 ten years ago when they were living in Spain.
After this time, it is now worth £300,000
They returned to the UK and have been resident there for the last year (365 days)

They decide, after being back in the UK for 1 year (365 days) to cash in the investment, taking advantage of ‘Time Apportionment Relief’ which will be calculated the following way:

£100,000 (total gain)
multiplied by the number of days in the UK (365)
divided by total number of days the investments have been running i.e. 10 years (3650 days)

Resulting in a £10,000 chargeable gain (that is what you declare, not the tax you pay).

There are other potential tax savings as well, but they depend on other circumstances. If you have your savings/investments set up the right way you can take advantage of this.

If you have any questions or would like to book a financial review, don’t hesitate to get in touch.

The folder…

By Chris Webb - Topics: Inheritance Tax, Madrid, Spain, Succession Planning, Wills
This article is published on: 10th August 2020

10.08.20

I´ve been playing around with this article during the past few days, trying to fill in some spare time during the weeks of this long hot summer we have here in Spain. I realised quite quickly that writing things that will be of genuine interest could be quite hard so for this article I´ve decided to share with you what I personally am doing at home right now.

Considering some limitations of movement right now it would be a great time to give this some thought.

One piece of advice I always give to my clients is to prepare “THE FOLDER”. You´re immediately wondering what I´m going on about, let me enlighten you to what it is and why you should do it.

For me personally I am reviewing my folder and checking its updated. Interestingly I needed to refer to my folder yesterday and realised I still had some older information on there which isn’t relevant anymore, so tonight’s job is to review and update.

There are many scenarios where you´ll be thankful for making the folder. When I moved house two years ago I went straight to the folder and had all of the companies contact information as well as policies or account details which made informing them all much easier, on the flip side I´ve also lost a family member where finding their folder reduced the stress in dealing with their estate.

In moments of stress you find yourself trawling through endless pieces of paperwork to ascertain assets and account details, then you get that lightbulb moment…….. why wasn’t it all documented.

The Folder | Chris Webb | Spectrum IFA Group

What is THE folder?
It is a single file (digital or physical) where you keep all your important personal and financial information together. It allows easy access to these documents if you’re no longer around to help. It is even more important to have it in place where one family member takes the lead on the family finances. That includes paying bills, managing accounts and storing documents.

As a family we decided to do both a physical folder and a digital folder. The digital folder is password protected, both me and the wife have access to this, and we have shared the password with close friends should anything happen to us. In the digital folder we have shared as much information as possible for all our assets.

For the physical folder it is vital to only list information that would not create a problem should that folder end up in the wrong hands. So, we have only listed the names, telephone numbers, policy / account numbers of all our assets in this folder. It would give enough information for someone to be able to deal with our affairs with minimum hassle.

Is it worth the effort?
Well, I think it is worth the effort. A time of loss can be stressful enough without having to try and piece together the deceased’s financial affairs. This can be a really difficult time for family members.

However, preparing THE folder is much more than avoiding stress; if you leave behind an administrative nightmare you could delay access to inheritors’ access to funds and potentially cost a small fortune in legal fees.

To give you an example of this, the UK Department of Work and Pensions estimate that there is currently more than £400 million sitting in unclaimed pensions pots in the UK. Imagine trying to find out if you have one.

chris webb Spectrum IFA

Which is best physical or digital?
As I mentioned, we have done both and I believe most people would do the same. Some people still love to have information in physical form, something you can get your hands on. The younger generation tend to rely solely on digital devices. I don’t think it matters which way you do it, as long as you do it.

What goes in the folder?
Its essential to list what assets you have, where they are and important contact information for each asset. Keep copies of any insurance policy documents, pension statements etc. I have put a small list below which would help most of you, but you do need to look at all your assets individually to make sure the list is right!

  • Life insurance policy documents
  • Personal pension documents
  • Employer pension details
  • Details of any entitlement to state pensions
  • List of bank accounts with account numbers, login details, passwords etc
  • Details of any credit cards
  • Property, land and cemetery deeds
  • Proof of loans made
  • Vehicle ownership documents
  • Stock certificates, brokerage accounts, investment platform details, online investment account details
  • Details of holdings of premium bonds, government bonds, investment bonds
  • Partnership and corporate operating/ownership agreements (including offshore companies)

How often should ‘THE’ folder be reviewed?
I would recommend reviewing the folder on an annual basis, but if you’re extra diligent with it you should review and update every time something changes. For example, if you change insurance companies then add the new details and delete the old. This is a continuous job, its not something you do once and never look at again.

Finally…
Tell someone about your folder. Someone needs to know you have made one and whether it´s digital or physical. There is very little point going to all this effort if know body knows it exists.

Now I´m off to review my own folder, and it needs reviewing. I noticed yesterday that whilst my financial assets are up to date, I haven’t updated our vehicle details and a few other things which had gone unnoticed. Lets do this!

If you have any questions about creating your own folder feel free to reach out!

UK Inheritance Tax and Spanish Succession Tax

By Charles Hutchinson - Topics: Inheritance Tax, Spain, Spanish Succession Tax, Succession Planning, Wealth Tax
This article is published on: 5th August 2020

05.08.20
Succession tax in Spain

Much has been written and said on this subject, particularly in many of a 19th hole. There is a fundamental difference between the two:

  • The UK Inheritance Tax is upon the deceased’s estate
  • The Spanish Succession Tax version is upon the inheritors

UK Inheritance Tax Liability is on the worldwide estate of the deceased and all global assets are assessed and ‘gathered together’ for the purpose of probate. Once fully quantified and valued, the tax is levied at a (current) rate of 40%. There is a nil rate band of (currently) £325,000 estate value below which no tax is payable. The tax has to be paid BEFORE the estate is distributed.

Spanish Succession Tax is payable on EITHER assets being located in Spain OR on global assets if the inheritor is a resident of Spain. If neither is the case, then there is no liability. If one or both is the case, then Spanish Succession Tax is payable by the inheritor(s) whether they be a resident or non resident of Spain.

There are some essential measures one can take to either mitigate or avoid these liabilities.

One of the best and most effective is the use of (Spanish compliant) investment bonds. In Spain for example, Succession Tax is payable on assets passing between spouses (this is unlike the UK where assets can pass between them untaxed). Where an investment bond is jointly owned, the deceased’s half can pass to the spouse untaxed.

An even greater advantage is that the bond can pass down the generations with the possibility of continuing investment growth free of both UK Inheritance Tax and Spanish Succession Tax. For as long as the policy holders and lives assured continue to be appointed, the bond will continue and each generation of policy holders can enjoy capital withdrawals on both a regular or intermittent basis. Thus all inheritance tax is avoided by an unlimited number of generations.

Furthermore, should a Spanish resident bond owner pass away and their beneficiaries are non residents of Spain, there would be no liability to Spanish Succession Tax because the bond is also domiciled outside of Spain (e.g. Dublin).

Spanish Inheritance Tax

For the moment, Spanish Succession Tax in the region where I live (Andalucia) is virtually non existent. There is a €1m allowance between close family members, providing their individual existing wealth does not exceed that figure. The remaining assets are also liable to a 99% exemption.

These two taxes are the only ones not included in the UK/Spain Double Tax Treaty. However, there is an unwritten rule that if it has been paid in one country, then it will not be charged again by the other. To my certain knowledge, this informal agreement has always been observed.

For information and assistance with your inheritance planning, please contact me by completing the form below of email/call:
charles.hutchinson@spectrum-ifa.com
Tel:(+34) 952 79 79 23
Mobile: 605 903 472

How to avoid Spanish taxes on your UK property and investments

By John Hayward - Topics: Moving to Spain, Spain, Tax in Spain, tax tips, UK investments, UK property
This article is published on: 30th July 2020

30.07.20
Tax in Spain and the UK

Being tax resident in Spain is not your choice
once you have made the initial decision to move to Spain.

Generally, once you have spent 183 days (not necessarily consecutive) in Spain, you are deemed to be tax resident and have to declare income and assets to the Spanish tax office. The tax year in Spain runs from 1st January to 31st December. Unlike the UK, which works on a part tax year basis when someone leaves the UK, in Spain you are either tax resident for the whole year or you are not.

As soon as you know that you will be taking the step to eventually become tax resident in Spain, it is extremely important to make certain that you have arranged your investments and property(ies) in a way that isn´t going to open you up to unnecessary Spanish taxes.

A lot of people will be looking to become resident in Spain before Brexit on 31st December 2020, in case the process becomes more complicated after. However, for those who are worried that applying for a residence card will automatically make them tax resident, let me dispel this fear. It does not. Therefore, you have the opportunity to apply for a residence card whilst taking action to protect your assets free from Spanish tax for 2020, becoming tax resident in Spain in 2021.

UK Property & Tax in Spain

As a tax resident in Spain, a person has to declare all of their overseas assets (over certain levels) as well as the income from these assets. Anything sold, such as a property or investments (ISAs, shares, bonds, etc.), and even a lump sum from a pension which would be tax free in the UK, will be taxable in Spain and this is where there is a potential tax nightmare.

Our advice is usually to sell before becoming tax resident in Spain, if selling is feasible and practical. If you are eligible to take a tax free lump sum, do so before becoming tax resident in Spain. ISAs are also taxable in Spain and although there are ways to legally avoid taxes whilst holding this type of investment, things can become very complicated.

property investment Spain

Let me make this clearer with examples of someone who has a UK property and sells it after becoming tax resident in Spain.

Example 1 – Property Purchase 1986

  • You move to Spain and become a permanent resident, and thus a tax resident, in Spain.
  • You own a property in the UK which has been your primary residence since you bought it in 1986.
  • As you have now moved to Spain, it is now a secondary property.
  • You bought it for £48,000. You are selling it for £600,000. As this is no longer your primary residence, Spanish capital gains tax is due on the sale.
  • Even with indexation (which only applies to pre-1994 purchases), the tax bill is over €50,000.

Example 2 – Property Purchase 2004

    • You bought a property in the UK in 2004 for £150,000 and are selling it now for £250,000.
    • The Spanish capital gains tax on the sale would be over €20,000.
    • Unlike the UK, there are no capital gains tax allowances in Spain.

The same principle applies to shares, investment bonds, and ISAs.
You have to pay Spanish capital gains tax on the difference between what you paid for them and what you sell them for, again with some indexation for pre-1994 purchases.

Spanish Inheritance Tax

Plan early: Before you move to Spain to help avoid Spanish Tax

You need to draw a line under your asset values now so that you can take advantage of the more beneficial capital gains and property tax rules in the UK and start afresh in Spain without the fear of unavoidable Spanish taxes in the future.

Contact me today to find out how we can help you make more from your money, protecting your income streams against inflation and low interest rates, or for any other financial and tax planning information, at john.hayward@spectrum-ifa.com or call or WhatsApp (+34) 618 204 731.

UK State Pension & Voluntary Contributions

By Paul Roberts - Topics: Spain, State Pensions After BREXIT, UK Pensions
This article is published on: 24th July 2020

24.07.20
UK State Pension

This guide is compiled to help you find out more about your UK state pension entitlement and explain how you can top-up your entitlement by making voluntary contributions.

Most of the leg-work can be done on-line using the HMRC sites.

The sites are a joy to navigate, so don’t be fearful! Let’s go.

• To get some general information about UK state pension entitlement / the amounts you will receive and how to claim it etc, click onto the following link;
www.gov.uk/new-state-pension

• To check when you will be entitled to receive your UK state pension, click onto the following link;
www.gov.uk/state-pension-age

• To check how much UK state pension you will get , you need to click onto the following link, www.tax.service.gov.uk/check-your-state-pension but before you can get onto that link; you need to open up a “government gateway account” by clicking on this link and following the instructions;
www.access.service.gov.uk/registration/email

….and to set up the government gateway above you will need your National insurance number, your mobile phone and your passport to hand. It is a straightforward process. Once you are set-up you will be given a password, a user ID which in conjunction with an access number, given via your mobile phone, allows you to access your HMRC data and check your state pension entitlements by clicking onto;
www.tax.service.gov.uk/check-your-state-pension

• If you can’t remember what your National Insurance Number is then click on the following link;
www.gov.uk/lost-national-insurance-number

Your UK Pension entitlement depends on how many years of national contributions you have made

To see the exact number of years that you have contributed, click here;
www.gov.uk/check-national-insurance-record

If you want to investigate how to fill in the gaps by making voluntary national contributions (and this is the interesting bit) then click onto the following link;

www.gov.uk/voluntary-national-insurance-contributions/who-can-pay-voluntary-contributions

You can make top up by paying Class 2 NIC’s very inexpensively; provided you meet the conditions:

If you scroll down on www.gov.uk/voluntary-national-insurance-contributions/who-can-pay-voluntary-contributions – to living and working abroad you will see the following information;

Voluntary_National_Insurance__Eligibility_

If you qualify, this is the one to go for:

You can check out the following (excellent) site for a well written account of what you might get and who might be entitled to get it.
www.healthplanspain.com/blog/expat-tips/318-paying-uk-national-insurance-when-living-in-spain.html

To pay Class 2 NIC’s go to the following link and click on PAY NOW and follow the instructions
www.gov.uk/pay-class-2-national-insurance

There is a bit of form filling to do but the benefits are well worth the effort, or at least that was very much my case where I was able to backdate my contributions by 7 years at a cost of around 1000 GBP. These 7 years contributions entitle me to around 7/35 of the state pension which is something of the order of 175 GBP a week from the age of 66 in my case. If one assumes that I get there and live to be an average age, then I’ll pass away age 85ish.

So, what will I gain?
Investment 1000 GBP. Average benefits 7/35 x 175 GBP x (85-66) x52= 34,580 GBP. Wow! And that is all indexed linked. AND, apart from backdating you can set up an annual payment and keep making contributions easily and automatically by direct debit. All well worth looking at .

Good luck with it all and let me know how you get on.

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:

Lockdown lessons learnt?

By David Hattersley - Topics: investment diversification, Investment Risk, Spain
This article is published on: 17th June 2020

17.06.20

Now as we enter phase 3,are we just beginning to get back to a different version of normality? We all have realised that we need to be around other human beings. Just going to a bar for a coffee with family,sitting outside, spending time talking with each other and people-watching has become a simple treasured pleasure as our world gets back on its feet.

LESSONS

Self -isolation & working from home.
An element of self discipline regarding work has had to take priority, but within limits as if we were at an office. Early research from New York has already shown the following:

a) People miss the interaction of an office environment that creates a positive energy and greater productivity, with the ability to expand upon and share ideas. Whilst Video Conferencing provides a two dimensional picture, it doesn’t pick up the nuances of a face to face physical meeting.

b) The morning rush hour can be a drag, it does provide time to set the day up with a sense of purpose. The evening journey creates a buffer to reflect on the day’s events or relax before you get home. Ensure that the family are aware of a disciplined time period whereby non work related issues have to be deferred until family time/free time. After all, working from home without the commute, will give you more family time and free time. Use it wisely, have breakfast and lunch with family, or more free time to carry out your own interests. Bucket Lists are no good if they aren’t followed through, or if you die before doing them.

c) Dress as if you are going to a physical meeting. One wouldn’t wear jeans or shorts to a meeting ! Learn to control technology and not let it control you, e.g. work e-mails should only be read during work-time. Avoid instant response, set time to consider and reflect on that response, but not in your downtime. Remember when you went on holiday and left your place of work for 2 weeks. Take time out to “Sharpen your blade”.

Environmental challenges

Environmental challenges.
The world is not ours by right.
With pollution in major urban areas falling rapidly, this a chance to re-evaluate our lives and the impact on our planet that we share with other forms of life. Living on the edge of a national protected park has given us the time to enjoy and observe the animals that co-exist with us, ranging

from the evening watering hole (drinking from the pool) to the raising of a variety of families of birds and mammals that return each year to breed, some of which we have never seen before e.g. a cockatiel. Dolphins now have begun to swim in our local harbours, wild boar are prevalent and discussions are under-way to reintroduce a mating couple of Iberian Lynx in our area. Speaking to a client in the UK, deer have appeared at the end of their garden.

As we have got used to only buy essentials, has this lead us to question consumerism? Do we really need to buy the latest gadget or fashion? Can we make do and mend? Repair and fix, rather than discard? In our own household, because we have strict recycling rules, why go to a shopping mall when we can “swap or gift”via a charity shop? We now use local facilities to support the small family businesses vs major groups e.g. the local hardware store. We now buy food that is locally sourced within Spain as much as possible, so in season food has become a key factor in our purchases.

Travel has also been bought into question. Having driven a Jeep V6 petrol engined car for many years (I never believed in diesel) I am now driving around in Skoda 1.2 petrol engine. There is a balance, a yin & yan: what needs to be addressed the social interaction vs unwarranted trips.So careful planning has to be considered. As for flying to the UK to see family is not something remotely worth thinking about, alternatives need to be considered. Travelling by car seems a more sensible approach because survival instinct kicks in. Plane/public Transport or your own personal self isolated vehicle!

I hope that in the biggest challenge that I have ever encountered throughout my career in financial services, I have met and satisfied my clients expectations of the service that I have provided in these difficult times.

balanced investments

But one word can sum up all the above…
BALANCED

It may seem ironic, but the fund managers we use endorse the same principals; they use their extensive collective resources and knowledge to create a number of funds and investments.

Even they are not sure of the short term future, so they are “hedging” their bets and not taking too much short term risk. Balance helps you to take advantage of opportunities, while limiting downside risk. If you would like to dsicuss how we can help improve the balance in your portfolio, please contact me for a meeting with my details outlined below.