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How Expats Can Consolidate Their UK Pensions

By Craig Welsh - Topics: Belgium, Uncategorised
This article is published on: 8th February 2019


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.

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

Concerned by a Currency Conundrum…?

By Barry Davys - Topics: Uncategorised
This article is published on: 22nd September 2017


As the Pound’s prospects continue to look bleak on the surface, many of us are considering what is best to do with our money. Should we invest it into a different currency so it will hold its value? Rob Walker of Rathbones investment group has an excellent overview of the major currencies available on the market, and predictions of what might happen as the financial world around us changes:

“With a portfolio approach that is global in nature, currency volatility is playing an important role in the reported returns to clients on a quarter­by­quarter basis. The last two years has seen some substantial US Dollar, British Pound and Euro volatility as confidence in the respective economic regions ebbs and flows. This has a profound effect on how the overseas assets’ performance are reported in an investor’s base currency, based on their individual circumstances.”

US Dollar
The US Dollar has been a safe haven in times of increased economic uncertainty. In the first few months of Donald Trump’s presidency, the US Dollar strengthened on the presumption that tax cuts would stimulate the economy. This has subsequently reversed, as the realisation of many false or premature promises has taken hold.

British Pound
The British Pound has seen its value fall significantly against the US Dollar and Euro due to Brexit uncertainty. Until the exact path of Brexit and the economic ramifications of this are known, it is likely that the Pound will remain weak. There will be many twists and turns along the way until March 2019, not least with the Conservative’s recent General Election result and subsequent reliance on the DUP. The current status quo is very vulnerable to further turmoil and the weakness of Sterling is a by­product of this.

At the turn of 2017, markets were focussing on the possibility of anti­establishment vote in both The Netherlands and France. At the time, both countries had parties with anti­EU policies in opinion poll ascendency and thus the consensus was to remain underweight in the Eurozone. Since that time, the Euro has undergone a substantial recovery of over 14% against the US Dollar as political risk subsided and economic confidence in the Eurozone improved. Against Sterling, it is up over 7% this year in addition to the weakness after Brexit of 2016. Both of these currency movements have had the impact of weakening the value of US and UK assets for Euro investors.

Translation effects
Performance of globally diversified portfolios has been affected by each of these currency movements. For example, had a US investor bought Euro assets at the start of 2017 the translated value would be increased by 14% due to the currency effect along, but a Euro investor who bought US assets at the start of the year would be seeing a translated loss of over 12%. Investors in Sterling will have seen the value of overseas assets increase markedly during the Brexit process as the Pound has weakened significantly, but Euro investors with Sterling exposure have seen a corresponding fall. Over the long ­term, we would expect the impact of shorter term currency movements to average out. For the Pound particularly, I have pasted some thoughts on the longer ­term direction below.

When managing portfolios in Euros, Sterling and US Dollars, we ordinarily have a degree of home- country bias to a client’s base currency. However, this is dependent on a client’s unique circumstances. Our portfolios are globally diversified, where we are striving to gain exposure to a portfolio of high ­quality global franchises in order to reduce risk to any one particular economic region. Indeed, currency analysis can be somewhat circular, as the underlying investments in each region are typically multi­nationals that have a global spread of currencies. This can mean that an individual portfolio may deviate against a certain measure or benchmark over the short ­term, which can be transitory, but we feel this spread of global investments will serve clients well over time.

Almost all investment professionals admit that forecasting future direction of foreign exchange is a thankless task, as currencies are largely influenced by future unknown events which are, by definition, unpredictable. As with most investments, volatility can also be driven by speculative investors such as hedge funds.

Hedging currency risk, i.e. eliminating the currency impact of portfolio returns and focussing on the underlying overseas investment return, is sometimes considered by investors. This can add to certainty but also cost. In many cases, due to the inherent unpredictability of foreign exchange markets, hedging not only detracts from returns but often proves to be the wrong action in hindsight. The additional cost and operational risk complexities of hedging currencies of hundreds of individual, tailored client portfolios mean that we cannot offer this at a client’s individual portfolio. However, in some cases, a hedged class of fund is available to Rathbones within a private client portfolio. For example, we have access to Sterling hedged classes of JP Morgan US Equity Income, Findlay Park American and Blackrock European Dynamic funds, enabling us to strip out the currency effect of these three funds at a cost. We do consider the use of these funds when we consider a currency to be excessively weak or strong.

Thoughts on the Pound
Using our long term macroeconomic framework, Sterling looks to be significantly undervalued versus the Euro (see chart below) in our view. Without Brexit, we’d be looking at what we call an ‘equilibrium’ value of around 1.50 euros to the pound, taking into account economic fundamentals only (relative prices, relative productivity and relative expected savings). Assuming Brexit, we’re working on the basis of c.1.3 € to £ ­ but it could take a number of years to get there.

Currencies Conundrum

Productivity is a key driver of our long term framework – particularly productivity in the tradeable goods sectors. This is likely to suffer after Brexit due to non­tariff barriers to trade (think complying with overseas regulation and customs regimes). That said productivity growth on the Continent has been weak, and is unlikely to surge ahead while the UK economy recalibrates, somewhat limiting the damage to the equilibrium rate. If the European project revivifies around a new Macron/Merkel nexus, then further gains from integration may lower the equilibrium rate a little further via improving Eurozone productivity.

Although the long­run economic value of the pound would shift lower in a ‘hard Brexit’ scenario (ie. no special deal), primarily due to the impact on productivity, the actual exchange rate is so far below the economic equilibrium value that we expect the pound to rise on a long ­term basis in any scenario. It is really just a question of speed. Unfortunately, such long­term analysis does not help us forecast currencies on a 6­12 month view, and the newspaper headlines generated by ongoing Brexit negotiations could well drive exchange rate volatility.

Until June, the EUR/GBP exchange rate over the last couple of years has closely tracked changes in relative interest rate expectations (ie. what the market thinks interest rates will be in Europe in 3 years time relative to what they think they will be in the UK). This lends some shorter ­term support to the pound, and indeed could favour sterling further if the run of strong macro data in the Eurozone starts to roll over.

The value of investments and the income from them may go down as well as up and you may not get back your original investment. Past performance should not be seen as an indication of future performance. Changes in rates of exchange between currencies may cause the value of investments to decrease or increase.

Information valid at 12 September 2017.
Tax regimes, bases and reliefs may change in the future.

© 2017 Rathbone Brothers Plc. All rights reserved.”

Has your bank in Spain paid you over 3% p.a. interest on your savings recently?

By John Hayward - Topics: Costa Blanca, Interest rates, Investment Risk, Investments, Saving, Spain, Uncategorised
This article is published on: 19th September 2017


The probability is that it hasn´t. However, you could have made more than 3% a year in a low risk savings plan with one of the biggest insurance companies in the world. We have many happy savers who have seen steady growth of over 3% a year for the last few years. How? Read on…

Saving money in a low interest world

Losing spending power to inflation
With special offers currently being offered by banks of 0.10% APR interest and inflation in Spain running at 1.6%, there is a guaranteed loss of the real value of money at the rate of 1.5% a year. There are some who would be disappointed, if not angry, if their money in an investment had lost 7.5% over 5 years yet this is exactly what has been happening to people over the last few years without them really appreciating it. 3% a year is not only an attractive rate of return but it is necessary to cope with inflation and provide real growth.

Spanish compliant insurance bonds
ISAs, Premium Bonds, and some other investments in the UK are tax free for UK residents. They are not tax free for Spanish residents. We are licensed to promote insurance bonds in Spain which are provided by insurance companies outside Spain but still in the EU. In fact, even after Brexit, these companies will still be EU based and so Brexit will not have the impact on these plans that it could have on UK investments. As the bonds are with EU companies, and the companies themselves disclose information to Spain on the amount invested, as well as any tax detail, the bonds are Spanish compliant which makes them extremely tax efficient. We do not deal with companies based outside the EU as we are satisfied that the regulation within the EU is for the benefit of the investor. We do not have the same confidence in some other financial jurisdictions and neither do Spain.

What investment decisions do you have to make?
Although we have the facility to personalise an investment portfolio within the parameters laid down by the EU regulators, offering discretionary fund management with some of the largest and best known investment management companies, we can also use a more simple approach for those who do not require any input into the day to day investment decisions.

So what has happened over the last 5 years?
The chart below illustrates the performance of one of fund’s available to you compared to the FTSE100 and the UK Consumer Price index. The argument to stay invested when markets fall is valid when one looks at the FTSE100 roller coaster line with the increase we have seen over the last year or so since the Brexit vote. However, anyone accessing their money around the time of the vote could have seen a 25% drop in the investment values. Not so with the fund in the insurance bond.

Real cases

Real case 1 – £40,000 invested 24/07/12. £50,770 as at 14/09/17. Up 26.92% in 5 years

Real case 2 – £356,669 invested 10/09/14. £431,177 as at 14/09/17. Up 20.88% in 3 years

Real case 3 – £316,000 invested 05/04/16. £334,422 as at 14/09/17. Up 5.82% in 18 months

Real case 4 – £80,000 invested 13/07/16. £86,160 as at 14/09/17. Up 7.70% in 15 months

Real case 5 – £20,000 invested 27/01/17. £20,712 as at 14/09/17. Up 3.56% in 8 months

These growth rates are not guaranteed but are published to illustrate what has actually happened and that the percentage returns on the fund are irrespective of the amount invested.

How can they produce such consistency?
Each quarter, the insurance company estimates what the growth rate will be for the following 12 months. This rate is reviewed based on the views of the underlying management company with people situated in all parts of the globe specialising in their own particular area. In good times, the company will hold back money that it has made so that, when things are not so good, they are still able to pay a steady rate of growth to their savers.

I don´t want to take any risk
It is difficult to avoid risk. In fact it´s practically impossible. A risky investment is seen by many as something which has a good chance of failure, either in part or completely. Stocks and shares are seen as risky whilst putting money into a bank deposit account is not. It is generally known that stocks and shares can go down as well as up but some people are unaware, or simply ignore, the risk of keeping money in a perceived “safe” bank deposit. Bank accounts have limited protection against the bank going bust. Then, if it came to the situation where a bank had to be bailed out by the government, it could take months, if not years, to access your money. As already mentioned, if the account is making less than inflation, you are losing money in real terms. So a bank account is far from risk free. The fund illustrated above is rated by Financial Express as having a risk rating of 22% of that applicable to FTSE100, much further down the risk scale and in an area that many people feel comfortable with.

What are the charges?
We explain in detail the underlying costs. In my experience, far too many people commit to a contract without understanding what they have, having received little explanation of the terms and conditions. This is where we differ to most. Different companies have different ways of charging and we run through all of the charges so that you are happy with what you have. The real examples above have had charges deducted and so these are the real values. Your bank may not charge you for the 0.10% interest (less tax) they are paying you but they are making money through investment but not passing anything on to you even though you supplied the money they invest.

What do I need to do next?
Contact me and I can review your savings, investments, and pension funds. I can then explain how you could arrange these in a tax efficient way whilst giving you the opportunity to access the growth that is available, for an improved lifestyle and to cope with rising costs.

Achieving financial stability in France

By Amanda Johnson - Topics: France, Saving, Uncategorised
This article is published on: 31st January 2017


When looking at achieving financial stability in France, budget planning and regular savings are two ways which can help smooth out any bumps in the road. Unexpected expenditure can put immense pressures on most families and adopting a few simple actions from today can really help you, in the event of an issue arising.

The first thing to do is understand exactly how much money comes in monthly. For those who are salaried or on pensions, this can be easier than those who work for themselves. If your income is erratic, it is worth looking at your last 12-24 months’ bank statements and seeing if you have seasonal income or regular money coming in.

Once you have an idea of the size and regularity of your income, you should then look at your expenditure and again look at when these monies are due, not just the amounts. Include all bills such as car servicing, insurances, taxes, average food costs and aspirational costs such as holidays, birthdays, new white goods etc…

The third step is to look at these figures/estimations and get an idea of your personal cash-flow. e.g.:

       Jan        Feb        March        April        May        June        etc.
       Income        €1500        €1500        €1500        €1500        €1500        €1500
       Expenditure        €1300        €1400        €1850        €1500        €1100        €1700
       Surplus/deficit per month        +€200        +€100        -€350        €0        +€400        -€200
       Running Balance        +€200        +€300        -€50        -€50        +€350        +€150


Now you can see your anticipated income verses expenditure on a month by month basis, it is possible to spot “pinch points” (March & June in this example) and plan to get around them:

  • Can some of the March or June expenditure be put back a month?
  • Can I increase my income slightly by working a few additional hours or taking on a few extra orders?
  • Can I reduce by bills by swapping suppliers?
  • Can I reduce my food bills by shopping at alternative supermarkets or growing things myself?

Finally, I recommend a plan to overcome any emergencies, which may arise. It is worth sitting down and discussing what emergencies may merge and their cost, both in what you spend to fix them plus any income you may lose in lost time. Emergencies can include boiler failure, serious car repairs, recovery from accident of illness and returning to the U.K. to support family needs. Whilst you cannot plan for every eventuality, you can get an idea of the likely maximum cost of one of these emergencies becoming a reality. You can now ensure you have a plan in place to implement and overcome the stress an emergency invariably brings:

  • Does your budget plan show a regular surplus which can start to save regularly to cover an emergency?
  • Do you have a credit card with a sufficient credit balance to cover your emergency cost?
  • Do you have a good track record with your bank, which would enable you to take a 3-6-month payment deferment on any mortgages or loans and get your cash-flow back on track?
  • How easily and quickly can your current investments be partially encashed to release monies to cover the emergency?

I hope that this article enables some of the mums here to plan more effectively. Knowing when your money comes in and goes out, working around “pinch points” in advance and preparing for how to deal with the costs of an emergency, will help you in handling issues when they do arise. It will also reduce stresses and strains on your personal and family life which can arise.

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

This article first appeared on MUMS SPACE FRANCE Money Matters

How safe is your bank?

By Pauline Bowden - Topics: Banking, Investment Risk, Spain, Uncategorised, United Kingdom
This article is published on: 27th January 2017


Which bank? Which jurisdiction? As more amazing stories come out about the world’s banks, we have seen a shift from Deposit Accounts being a low risk investment, to a much higher rated risk. So what exactly does each jurisdiction offer as security against your bank going bust?

      Isle of Man       Personal / Company Account       50,000GBP / NIL
      UK       75,000GBP
(from 31st January 2017, proposal by
Government to increase to 85,000GBP)
      Spain       100,000euro
      Jersey       50,000GBP
      Guernsey       50,000GBP
      Gibraltar       100,000euro

Many people in this area of Andalucia have bank accounts in Gibraltar, the Isle of Man, Guernsey or Jersey. Of the above list, apart from Gibraltar, these jurisdictions have the least protection for the account holder.

I often write about spreading your risk, by investing in different asset classes. Perhaps now we should also spread our bank accounts and have smaller deposits in more banks, in more jurisdictions.

It can make life a little more complicated, but it makes financial sense not to put all your eggs in one basket. At least then, if one egg gets broken, you do not lose all of them!

Holding cash as an asset class is no longer a “safe bet”. With interest rates so low now, the real value of the capital is being eroded by inflation. People that relied on the income from deposit accounts have seen their disposable income fall drastically, especially if they are sterling investors in receipt of sterling pay or pensions. Many are having to eat into their capital to maintain their lifestyles.

Alternative investment strategies need to be considered in order to protect the wealth that you already have and maximise the returns from that wealth.

Theresa May addresses Brexit

By Chris Burke - Topics: BREXIT, Spain, Theresa May, Uncategorised, United Kingdom
This article is published on: 25th January 2017


Theresa May, given one of the hardest Prime ministerial assignments perhaps of all time, gave her anticipated speech of the UK’s plans to leave the EU.

Why was it so hard?

When you have a referendum vote decided by only 2%, you have almost two equal sides to please. Those who voted to leave the EU, and those who were against it. Rather than alienate them and make them feel bad that the UK is going to leave the EU, like any good leader she had to try and get them feeling positive that, although they didn’t want it, perhaps there is lots to feel optimistic about leaving the Euro. A tough job in anyone’s book.

What did she say?

It was more of a case of what she didn’t say. Like a poker player, there was no way Theresa was going to give away to the other ‘Players’ what cards she was holding, how she was going to play them and perhaps most importantly which were her ‘Trump’ cards. What she did though was tell everyone what Britain was and wasn’t going to accept and how it would be done.

What information did she give away?

She will not settle for a bad deal for Britain, and she is prepared to walk away from the negotiations if she feels the deal is not right for the UK. Indication was also given that any agreement that was reached would be voted on by UK Parliament. She also confirmed that Britain will leave the EU’s single market – despite backing membership less than a year ago – to regain control of immigration policy and said she wants to renegotiate the UK’s customs agreement and seek a transition period to phase in changes. Her 12 point plan which starts with confirming leaving the EU and ending in a smooth, orderly Brexit, had recollections of a speech Hugh Grant gave in the film shown at every Christmas, ‘Love Actually’. It was very strong, very direct with clarity and highlighting the fact that Britain will not be bullied or pushed around. It is perhaps a strange comparison but it was arousing, just like the film, nonetheless.

How did it go down?

In essence very well. Theresa gave an assured, strong performance which the markets reacted to and she made it credible that Britain can still be a ‘Great’ force outside the EU. Whether this is the case has to be seen, but 50% of the reason why people react in life is their perception. And on this evidence, the people’s perception was good. Both from inside the UK and in the EU, most interestingly.

Banks have floors?

By Chris Burke - Topics: Banking, Barcelona, Spain, Uncategorised
This article is published on: 24th January 2017


After a surprising final ruling by the European Union’s top court, some Spanish bank shares tumbled by as much as 10 percent recently. Spanish banks, including Banco Popular Espanol SA and Banco Bilbao Vizcaya Argentaria SA, may have to give back billions of Euros to mortgage customers.


Judges at the EU Court of Justice ruled in Luxembourg that borrowers who paid too much interest on home loans pre-dating May 2013 on so-called mortgage floors, are entitled to a refund from their banks. Banco Sabadell SA fell as much as 7.5 percent, while Banco Popular slipped as much as 10.5 percent, the largest decliner in Spain’s Ibex 35 benchmark.

The court said that a proposed time limit on the refunds is illegal and customers shouldn’t be bound by such unfair terms. Some banks are still making provisions for bad loans, which also adds pressure to profit.

The size of the problem

With €521 billion, home loans are one of the largest parts of Spanish bank lending business as they grew their real estate exposure during a construction boom in the country that burst at the end of the last decade.

BBVA estimated in July that the maximum impact from a negative ruling would be 1.2 billion Euros, while CaixaBank SA said at the time it would have to refund homeowners as much as 1.25 billion Euros. CaixaBank has already provisioned 515 million Euros, it said.

The EU court case comes as Spanish banks are under pressure from low interest rates and weak demand for credit, affecting their traditional business of lending.

The capital ratios of smaller lender Liberbank SA and CaixaBank will be hit hardest by the ruling, brokerage firm Renta 4 said in a note to clients. Liberbank will see a 75 basis points impact on its CET1 ratio, while CaixaBank will suffer a 40 basis points hit. Banco Popular will have a 36 basis points impact.

The ruling doesn’t affect the solvency of Spanish banks nor the strength of the mortgage market in the country, Spanish banking association CECA said in a statement. The Bank of Spain estimates the maximum amount of mortgage floors affected by the ruling is slightly above 4 billion Euros, an official said.

Residency rights in Brexit negotiations examined

By Spectrum-IFA - Topics: BREXIT, EU Select committee, europe-news, Exiting The EU Select Committee, Italy, Spectrum-IFA Group, The Exiting the European Union Committee, Uncategorised, United Kingdom
This article is published on: 19th January 2017


Yesterday on 18th January The Exiting the European Union Committee met in the ‘Boothroyd Room’, Portcullis House, London. The committee looks at the rights of EU citizens living in the UK and UK nationals living in EU member states as part of the negotiations for exiting the EU.

Witnesses in attendance included Gareth Horsfall from The Spectrum IFA Group, representing Expats living in Italy.

The Purpose of the session

The questioning focuses on the terms of reference for the inquiry, in addition to:
The concerns of EU citizens currently living in the UK, and UK nationals currently living in the EU
What approach the UK Government should take in the negotiations to safeguard the rights of both EU nationals in the UK and UK nationals resident in the EU
The process for identifying and clarifying the status of EU nationals in the UK

Witnesses in attendance

  • Nicolas Hatton, Founding Co-chair, the3million
  • Anne-Laure Donskoy, Co-chair, the 3million
  • Barbara Drozdowicz, Chief Executive Officer, East European Resource Centre
  • Florina Tudose, Information and Outreach Coordinator, East European Resource Centre
  • Debbie Williams, British citizen resident of Belgium
  • Gareth Horsfall, British citizen resident of Italy (The Spectrum IFA Group)
  • Sue Wilson, British citizen resident of Spain
  • Christopher Chantrey, British citizen resident of France

The session was broadcast on Wednesday 18 January 2017, from the Boothroyd Room, Portcullis House.
The recording can be viewed here

A full commentary from the session can be viewed on the Guardian Newspapers website here

Exiting The EU Select Committee

By Spectrum-IFA - Topics: Exiting The EU Select Committee, Uncategorised
This article is published on: 13th January 2017


The Spectrum IFA Group are both proud and honoured that our Rome based Adviser, Mr. Gareth Horsfall, will be one of only 4 UK citizens living in the EU representing UK expatriates at the House of Commons on January 18th 2017. This will be broadcast live and streamed live over the internet between 9am and 12pm GMT.

The “UK Exiting the EU Committee” (consisting of 20 MP’s) is appointed by the House of Commons to examine the expenditure, administration and policy of the Department for Exiting the European Union.

Gareth has been chosen for several reasons:

  • He has been very active in working behind the scenes trying to safeguard the present rights of UK citizens residing in Europe.
  • He provides financial advice to, mostly, British people living in Italy.
  • He is the legal representative of an Italian Ltd Company.
  • His wife and child are both Italian.

So when he was offered the quite daunting invitation to sit before the select committee, he immediately agreed, and will explain the problems that an expatriate, like himself, will face when the UK exits from the EU.

If you are reading this article, Gareth would be more than pleased to hear from you about your particular worries/views about the UK’s departure from the EU and will use whatever information he receives to help him present a strong case for all British Citizens living in Europe.

You can email him at Gareth.horsfall@spectrum-ifa.com

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

By Sue Regan - Topics: CGT, France, Income Tax, Residency, tax advice, tax tips, UK property, Uncategorised
This article is published on: 13th January 2017


I decided on the topic for this month’s article after having had a couple of very similar conversations recently with expats relating to the sale of property in the UK. In each case they were badly let down by their UK Solicitors who failed to inform them of a change in UK legislation that was introduced in April 2015. As a result, they received unexpected and not insignificant late payment penalties from HMRC for failure to complete a form following the sale of their UK property which could have been avoided if they had been made aware of this change in the law.

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.

The rate of CGT for non-residents on disposals of residential property is the same as UK residents and depends on the amount of taxable UK income the individual has i.e. 18% for basic rate band and 28% above it, and it is only the gain made since the 6th April 2015 that is subject to CGT for non-UK residents.

Reporting the gain

When you sell your property, you need to fill out a Non-Resident Capital Gains Tax (NRCGT) return online and inform HMRC within 30 days of completing the sale, regardless of whether you’ve made a profit or not. This applies whether or not you currently file UK tax returns. You can find the form and more information on the HMRC website at hmrc.gov.uk

Paying the tax

If you have a requirement to complete a UK tax return then payment of any CGT liability can be made within normal self-assessment deadlines. However those who do not ordinarily file a UK tax return will be required to pay the liability within 30 days of completion. Once you have submitted the form notifying HMRC that the disposal has taken place, a reference number will be issued in order to make payment.

As a French resident you also have to declare any gain to the French tax authority. The Double Taxation Treaty between the UK and France means that you will not be taxed twice on the same gain, as you will be given a tax credit for any UK CGT paid (limited to the amount of French CGT). The French CGT rate is 19% and any taxable gain is reduced by taper-relief over 22 years of ownership. You will also be liable to French Social Charges on the gain, at the rate of 15.5%, and the gain for this purpose is tapered over 30 years (rather than 22 years).

At Spectrum we do not consider ourselves to be Tax Experts and we strongly recommend that you seek professional advice from your Accountant or a Notaire in this regard.

There is little that can be done to mitigate the French tax liability 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 future unnecessary taxes. One easy way to do this is by investing in a life assurance policy, which in France is known as a Contrat d’Assurance Vie, and 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. In addition, this type of investment is highly efficient for Inheritance planning as it is considered to be outside of your standard estate for inheritance purposes, and you are free to name whoever and as many beneficiaries as you wish. There are very generous allowances for beneficiaries of contracts for amounts invested before the age of 70. Spectrum will typically use international Assurance Vie policies that fully comply with French rules and are treated in the same way as French policies by the fiscal authorities.

International Assurance Vie policies are proving highly popular in light of Loi Sapin II, which has now been enacted into law. More details about the possible detrimental effects of the ‘Sapin Law’ on French Assurance Vie contracts, in certain situations, can be found on our website at www.spectrum-ifa.com/fonds-en-euros-assurances-vie-policies/. Thus, when also faced with the prospect of very low investments returns on Fonds en Euros – in which the majority of monies in French Assurance Vie contracts are invested – it is very prudent to consider the alternative of an international Assurance Vie contract, particularly as you would still benefit from all the same personal tax and inheritance advantages that apply to French contracts.