Panama Papers and the banks

Living as an expat in Spain, or indeed in any other country, brings particular and sometimes very complex wealth management requirements because managing personal finances across multiple jurisdictions is inherently complex and invariably requires specialist advice.

This goes some way to explain why thousands of British expats have recently been caught and penalised for either failing to pay taxes or unlawfully claiming British pension and other social security benefits while living and, in some cases, working abroad.

Cross-border taxation for expats is a notoriously confusing area of wealth management and can seem especially onerous with new data sharing and enforcement rules in place. Unfortunately, not all asset managers are as familiar with tax reporting requirements as they should be. This may seem inconceivable, but wealth management professionals in Spain, across Europe and indeed the globe have an obligation to clients to ensure that they understand and follow all the rules.

Recent pension transfers I have been involved with include British Airways and BT, amongst others, and these have prompted me to consider their perceived “gold-plated” image and whether clients may be better off transferring out to a Self-Invested Pension Plan (SIPP), perhaps, or a Qualifying Recognised Overseas Pension Scheme (QROPS).

If you are contemplating your pension planning, ask your pension trustees to send you a Cash Equivalent Transfer Value (CETV) and you may be shocked by the size of the sum involved. The British Airways Scheme recently offered over £500,000 transfer value to a member whose pension entitlement would be £20833 at retirement. That’s 24 times the income.