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Vulnerable UK Expat clients and their UK advisers left short by lack of Professional Indemnity cover

With passporting rights being a thing of the past, PII is not going to cover any of their EU based clients and means that both clients and their UK financial advisers are effectively in limbo. This lack of PII also stops cross border advice.  However, this does not apply to Global firms with worldwide cover such as Blacktower.

Put simply, this means there should no longer be UK-based advisers with EU-based clients.  So where does this leave you and who will service your plans and provide the right kind of protection? This might not be all bad news and could actually be good news, since French compliant products are better for UK expats living in France as they can offer significant savings with regards to income tax and inheritance tax.

One of these such products is Assurance Vie.  Most of us have heard of this if we have done any kind of research or lived in France for any length of time, but very few understand what it is and there are many misconceptions when I speak to clients about Assurance Vie.  One of the biggest is that you can’t access your money for 8 years.  Depending on which company you use to set-up your Assurance Vie you can have as much or as little access as you want.  What happens after 8 years is that you are given an additional tax-free allowance of €4,600.  This means that if any part of a withdrawal you make is subject to tax, then the first €4,600 will be treated as nil-rate.  It is an added bonus to encourage people to keep their money invested for the longer-term.

As an international company we can offer you an international version of the Assurance Vie, which benefits from all the tax efficiency of being a French-compliant investment, but it allows you to keep your savings in GBP or convert to Euros or USD, if you would prefer.  This might help from a point of view of longer-term succession planning, if you intend to leave some of your money to your family, friends or charities in the UK.  If that is the case, it may not be the best option for you to convert your current savings to Euros.

Additionally, to this, if you move to a different European country or back to the UK it is possible to port the Assurance Vie with you and it would simply become an offshore bond, that would remain tax efficient in the UK from both a growth perspective and income perspective.

Of course, you can always leave your savings and investments in the UK, but what was tax-efficient whilst you were a UK resident, is no longer tax-efficient in France and the onus is on you to report the interest and gains on these correctly and pay potentially 30% in investment tax and prélèvement sociaux each year, regardless of whether or not you withdraw any money.

It doesn’t always have to be complicated and I would be happy to talk through your individual circumstances.  You can contact me by email Rosemary.sheppard@blacktowerfm.com or call me on 06 38 86 99 70. Website: www.blacktowerfm.com Initial consultations are free of charge and you can rest assured that Blacktower is a truly Global leader in financial services and carries Professional Indemnity Insurance to cover and protect all of our clients.

This article is based on the opinion of the financial adviser and author, and does not reflect the views of Blacktower. The above information is based on current legislation which is subject to change and does not constitute as investment advice, or investment research and you should seek advice from a professional adviser before embarking on any financial planning activity.

Blacktower Insurance Agents & Advisors Ltd is regulated in Cyprus by the Insurance Companies Control Service and registered with ORIAS in France. Blacktower Financial Management (Cyprus) Ltd is regulated in Cyprus by the Cyprus Securities & Exchange Commission and is registered with the AMF in France.

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.

Other News

New Spanish Will Laws from 17th of August

Blacktower Financial Management

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.

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AROUND THE BRANCHES: Living and Working in the Netherlands

Girl with Netherlands flagThe United Kingdom finally left the European Union on 31 January 2020. As such, the two jurisdictions are now in the process of implementing the Withdrawal Agreement, with the transition period ending at the close of 31 December 2020.

This means that in the short-term, nothing really changes for UK expats in the Netherlands – they will continue to enjoy the protections and freedoms of EU regulations, including, crucially, freedom of movement and the right to work and study in the country. Find out more about how Blacktower can help you during Brexit, here.

However, following the end of the transition period – i.e. after 31 December 2020 – UK nationals and their family members who live in the Netherlands will require a residence document. This should be arranged through the Immigration and Naturalisation Service (IND), which, in theory, will be sending letters to all UK nationals in the Netherlands detailing how they can apply online.

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