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Expat Financial Advisers and Wealth Tax

In fact, some jurisdictions such as Andorra, Georgia and Gibraltar have predicated a large part of their growth on attracting high net worth individuals to all the benefits and investment opportunities that are inherent in being a low-tax residency.

Despite a rich choice of low-tax jurisdictions to choose from, three of the EU countries that levy forms of wealth tax continue to be among the most popular retirement and residence destinations for UK expats: France, Spain and Portugal (although the Organization for Economic Cooperation and Development – OECD – does not include Portugal in its list of countries levying a tax on net wealth).

If you live in one of these countries or are considering a move, you should be aware of the implications of the various types of wealth tax and how they might affect you. Here we take a country-by-country look at some of the things you need to know.

France

Up until the end of 2017 French wealth tax applied to the total value of almost all assets – including savings and investments – however, since the start of 2018 all people resident in France have been liable for wealth tax only if they have global property assets worth more than €1.3 million. It should also be noted that the tax may also apply even if you are a non-resident; the same €1.3 million threshold applies to French real estate owned by non-residents.

Portugal

Portuguese Adicional Imposto Municipal Imobiliário (AIMI) tax (as an additional assessment to Imposto Municipal sobre Imóveis – IMI) applies to all Portuguese property that exceeds the €600,000 valuation threshold, regardless of whether it is owned by a resident or non-resident. Rates are applied as follows:

  • Companies: 0.4% over the total tax value of the properties with no threshold (if the property is used by a company shareholder, Director or their family, the tax rates for individuals will be applicable)
  • Individuals:
    • 0.7% over the tax value of the properties owned over €600,000 and less than €1,000.000;
    • 1% over the tax value of property valued at more than €1,000,000 and less than €2,000,000
    • 1.5% over the tax value of the properties higher than €2,000,000
    • The above thresholds may double if the property is owned by a married couple under specific marriage regimes when they opt to be taxed together
  • Offshore entities: 7.5% over the total tax value of the properties with no threshold.

Spain

Unlike Portugal and France, Spain levies a wealth tax based on the value of a range of assets including property, regular savings, investments, art and yachts. This makes speaking to your expat financial adviser about planning for wealth tax in Spain a necessity. For residents of Spain, the tax applies to all applicable global assets worth over €700,000 (double in the case of couples and with a deduction for a main home). For non-residents, Spanish wealth tax applies to Spanish-domiciled assets only, worth over €700,000. There may be some regional variation on the scale of the tax, so it is worth discussing this with your expat financial adviser.

Expat Financial Advisers

Blacktower FM’s expat financial advisers can help you build a strategy to help you negotiate the many cross-border financial challenges you will face, including wealth tax when living overseas. Download our for more information.

The Blacktower organisation has more than 30 years of wealth management experience and can help you further your goals. Contact us today for more information.

This communication is for informational purposes only and is not intended to constitute, and should not be construed as, investment advice, investment recommendations or investment research. You should seek advice from a professional adviser before embarking on any financial planning activity. Whilst every effort has been made to ensure the information contained in this communication is correct, we are not responsible for any errors or omissions.

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Why Portugal makes for one of the best retirement destinations

Holidaymakers at the beachPortugal is hands down one of the best places for expats to retire to (certainly in the eyes of our Portugal team). And you just need to look at the statistics to realise how popular it is as a retirement destination.

For example, Live & Invest Overseas have ranked the country’s popular southern region, the Algarve, as the best place in the world to retire for four years in a row.

This is further backed up by HSBC’s Expat Explorer Survey, which is based on research conducted by YouGov, polling over 27,500 expats from 159 different countries. According to the report, 42 percent of expats in Portugal are retired, compared with a global average of just 11 percent. And out of these retirees, the overwhelming majority (96 percent) rated the country as good or very good, showing the reason that once your working years are over, so many choose to retire to Portugal.

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Expat Finances in Spain, Tax and Data-Sharing

Spanish flagRapid developments in IT systems, financial databases and data-sharing platforms over recent years now mean that it is easier than ever for nation states to share and exchange financial information relating to the investments, income, taxes, savings accounts, properties and pensions of individuals who have assets placed in multiple locations across the world.

Inevitably, this also means it now crucial to ensure you disclose your full list of assets whenever required.

As a British native you might be a little complacent in this regard. The UK has one of the most stringently and best-regulated financial advice sectors in the world, and in many cases if your adviser fails to disclose your full spectrum of assets and interests it is he or she, rather than you, who will be liable.

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