Expats’ EHIC-Style Rights Guarantee a Step Closer

Here in Spain, I hear no end of horror stories regarding the country’s financial institutions and laws. Unfortunately, I too have been on the receiving end of unscrupulous and downright unfair treatment, but last week a client of mine of over four years called me in distress. For the avoidance of doubt, this is a true story.

My client is 86 years old and, sadly, her husband died eight months ago. Over four years ago she followed our recommendation of investing in a purpose-built Spanish portfolio bond with both her husband and her as lives assured. This meant that should either partner die before the other, the bond would continue as if nothing had happened, thereby not triggering a Spanish Inheritance Tax calculation. In Spain unlike the UK, there is Inheritance Tax between spouses, however, because this particular bond is held outside Spain it avoids inheritance tax. This is a tool that we often use for clients in Spain.

The pension freedoms of 2014 radically altered the way many expats are now able to access their retirement funds. The changes, which came into force in April 2015, ended the age of annuity-by-default and allowed people to take multiple tax-free sums, have flexible options regarding income drawdown and provided more scope for expat pensions and transfers into schemes such as SIPPs and QROPS.

However, although these changes have been empowering, they do place a greater emphasis on the need for trusted expat financial advice, particularly for those who wish to maintain the same standard of living they have enjoyed while working once they are retired and have to live entirely of the retirement income generated by their pensions and other assets.