The offices of the taxman are not usually credited with efficiency and success. But there is one aspect of HM Revenue & Customs which is terrifyingly efficient, and that is its powerful computer program which is accessing and trawling databases of personal financial information on an unprecedented scale.
Many clients have sensibly opted to invest in Assurance Vie (Investment Bonds) type arrangements in France for the huge income tax and inheritance advantages offered though these products for French residents. A large selection of clients have also taken the option of using the Fond en Euros or Sterling funds preferring the guaranteed rates of return offered and the invested capital's security.
Indeed so used are the Fond en Euros funds within Assurance vie “wrappers” that often clients believe that they are one and the same. The Fond en Euros main principles are that your capital's value is guaranteed and you are given an annual rate of interest. The assurance vie ensures your funds grow free of French taxation due to the code of law relating to Life Insurance products. This combination has been so used in France and so much money tied up in these arrangements that the Government want to bring in a statute to limit the percentage invested into Fond en Euros per investor portfolio as they see this type of fund as stagnating the French economy and restricting investment into industry via the purchase of “actions” or shares.
Many of our clients will have beside their property and / or bank accounts here in Spain still assets abroad. This could be a property in the “home” country, a share portfolio in Luxembourg, an offshore bank account etc.
Most would have a Will covering these assets in their home country and without specific mention of the asset will have laid out their wishes in the form of for example “spouse to spouse on first death and on second death to the children” which would apply to all their assets.
Should the person have not bothered taking on a Spanish Will then the heirs would have to go through the extra work and costs involved in relying on a UK or foreign will for the disposal of the Spanish assets. The Will would have to be translated and apostiled adding delays and extra costs at a difficult time for the heirs.
The announcement made by the UK Government on the 5th of April 2015, regarding the possibility of YOU being able to access your Private Pension Entitlement (at the age of 55 years) resulted in literally thousands of enquiries to each and every Pension Scheme Provider in the UK, from both Expats and UK Residents alike. No wonder then that the stock response when telephoning, is “We are currently experiencing a high volume of calls…”, “Your call will be answered in approximately … minutes, you may wish to call back at another time.” etc. Infuriating? Yes, absolutely! Well, here´s something else all of you ex-pats need to know…
A leading comparison website’s customers were directed to savings accounts that could leave them £500 worse off than the best possible rates, according to an investigation.
Savers who compared ISA’s and bonds on the site were not offered the best rates on the market. Thousands of savers who used the website to select a savings account were misled, costing them potentially up to £500 a year in lost interest, according to a recent investigation. Channel Four’s Dispatches said that the comparison website advertised poor-value savings.
One of the biggest challenges that expatriates confront when moving abroad is the complexity of expat finances. According to HSBC’s Expat Explorer Survey, 75% of respondents (9,288 respondents worldwide) say that their finances have become more complicated since they left their home country.
Compounding this, many expats don’t consider all aspects of their finances before, during and after moving abroad, therefore making organising their finances even more complex than it needs to be. What are the common mistakes seen time and time again?
Social Media is now a prime area that investment scams are targeting. Be careful of very clever advertising using your friends to lure you in.
I am came across one very recently on Facebook where a friend of mine had supposedly ‘liked’ a company that claimed to compare rates of investment interest from all providers available for Expats in Spain. The rates offered looked extremely good, as an IFA I am supposed to know all the best rates available so I was intrigued to know more.
According to the Daily Mail Savers have £450 billion stuck in dinosaur savings and investment plans, millions are stuck with policies bought decades ago and which are no longer fit for purpose. Today, the returns they offer are rotten. Could this be you? Have you just let your financial planning take a back seat? Well now is the time to act and make your money work for you.
Savings accounts and cash ISA´s
Banks and building societies across the UK and the Banks in Spain have again slashed the interest rates they are offering on savings accounts and cash Isa´s , Lloyds, Halifax , Sabadell to name just a few. The rates they are offering now are between 0% and if you are very lucky 0.75%.
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