News & Insights

The new Spanish budget came into force on 6 July. It was a long time in the making. At the end of May Spanish parliament finally approved the government's 2018 budget following support from the Basque Nationalist Party (PNV), bringing to an end fears that the long-delayed budget would ever receive the required level of support, particularly in light of the delicate situation in Catalonia.

"Far from constituting a blank cheque to the PP [People's Party) government, this decision allows the PNV to maintain its capacity of political influence in order to contribute to a dialogue and a solution in Catalonia," the PNV said.

A full evaluation of your Will writing options should be an essential aspect of any expat financial services plan. If you have interests across two or more jurisdictions, whether they are business, investment, familial or lifestyle you need to be educated and aware of the implications that this can bring.

For example, when you have assets in both Britain and another country, it can be confusing to know whether you should write a single Will covering all the assets in both jurisdictions or whether you should write separate Wills: one for each jurisdiction in the language of that region/country.

Unfortunately, without expert legal and expat financial services advice, it may not be possible to answer the question with any confidence. You should consider all of the following:

Spanish newspaper ABC has reported that tax authorities in the country are cracking down on expats who fraudulently claim Gibraltar residency for the purposes of wealth management.

Apparently the measures have already led to the collection of €20 million from 160 high-net-worth individuals (HNWIs) claiming residency in Gibraltar when in fact they lived in nearby Andalucía. This meant that, on average, €125,000 was collected from each HNWI.

Jorge Ramírez, a representative of the Tax Agency in Andalucía, told the newspaper, "A tracking system was used to collect verifiable documentary evidence, and we found some Gibraltarians whose primary financial interests were actually entirely situated in Spain."

I recently attended the British Embassy Outreach Meeting in Perigueux and as you can imagine there were a lot of disgruntled expats wanting answers that, frankly, aren’t really available right now.  Understandably, for many living through the turmoil and uncertainty of Brexit, there is a lot to take into consideration and some may even be contemplating moving back to the UK. 

One issue in particular piqued my interest as a gentleman had a letter from his UK pension company informing him that, post-Brexit, they may no longer be able to passport into the EU, which means that they may no longer be able to pay his pension payments directly into his French account.

Expat financial advice providers and their clients need to be especially vigilant to ensure that they meet their legal obligations under the newly updated Common Reporting Standard (CRS), which will come into effect in September 2018.

It is likely that those who do not take steps to ensure full familiarity and compliance with the latest and extended OECD (Organisation for Economic Co-operation and Development) rules regarding the reporting of offshore income may face investigation and penalty.

Due to the complexity of cross-jurisdictional financial management, expats are perhaps the group at the highest risk of innocently falling foul of the rules, particularly if they are poorly advised or have a wealth manager or financial adviser who fails to securely or promptly deliver important communications.

The UK government has admitted there are not enough pension transfer specialist advisers to deal with demand, particularly in the case of more complex transfers into overseas pensions. This was the government’s response in March to a consultation launched two years ago, on whether the need to take financial advice, introduced with pension freedoms, created difficulties for overseas residents – residents such as those living in Cyprus wishing to transfer their pension savings from the UK to a qualifying recognised overseas pension scheme (QROPS).

According to data from HM Revenue and Customs (HMRC), there were just short of 10,000 transfers to a QROPS in the 2016/2017 tax year. However, from these, only transfers of more than £30,000 would be subject to the advice requirement.

According to reports emanating from Bulgaria, expat pension choices may be about to become broader and more accessible with the likely introduction of the European Union PEPP.

PEPPs – Pan European Pension Products – are understood to be at the draft stage, with regulations set to be examined by European Parliament for possible approval.

The development of PEPPs has come about as a result of a perceived need to give people greater choice when it comes to planning their retirement pensions, particularly given that there is not equality of options for retirement savers across the continent. It may also help address the fact that, according to the EU, only 20% of workers between the ages of 25 and 59 make regular pension contributions.

More than four in ten retired British expats choose to live in Spain. This could be for various reasons, including Spain's financial opportunities, family tradition, historical ties between the two countries, and, of course, the Spanish culture and climate.

However, it is little use making the most of Spain's wealth management opportunities if your UK-based financial situation is not organised before making the move.

For example, nowadays the UK has various regulations and agreements in place with the European Union which mean that unless you pay off, or legally attend to, your UK debts before moving you could be served with a European Enforcement Order (EEO) – hardly the welcome card expats want when taking up residence in their new Spanish address.