News & Insights

Tax and Benefits Across Borders – Don’t Get Caught Out

UK-originated benefits are a problem too; according to the Department for Work and Pensions (DWP), it has recently managed to secure £1.1 billion in reclaimed benefits from expats who should not have been receiving payment.

Fraudulent or negligent personal wealth management in Spain would appear to be a particular problem, with as many as 10,000 expats in the country prosecuted or fined for breaches in this regard.

However, it is likely that not all cases of tax and/or benefit fraud are deliberate. Some expats who are unaware of the rules, or confused by them, may make mistakes in good faith or sometimes as a result of negligent wealth management advice.

Fortunately, the DWP is prepared to make some distinction between benefit and pension overpayment cases that are clearly instances of intentional fraud and those that come about as a result of negligent mismanagement or misunderstanding.

In terms of the consequences for misdemeanours, approximately 50% of cases result in individuals being ordered to repay benefits in full, while the rest not only have to repay sums but also receive prosecution and a substantial fine.

HMRC adopts a similar approach to tax errors that are made in good faith and those that are made deliberately.

It is a difficult problem for the British government, HMRC and the DWP to address; nearly 4 million British citizens live outside the UK and there are a complex range of options available for both tax collection and benefit payments. Advice and clarity are clearly essential in this regard.

Tax reporting requirements for investment funds are constantly changing. Many EU countries, including the UK, Germany, Austria and Switzerland, have recently modified or introduced new tax reporting regimes.

Getting it right with Blacktower

As an established wealth management firm in Spain, Germany and other major UK expat hubs, Blacktower has a detailed understanding of all the country-specific and cross-border tax and asset issues that affect you. For more information, contact us today.

Other News

Expats’ EHIC-Style Rights Guarantee a Step Closer

Blood pressure monitorBritish expats abroad have taken heart from the announcement that the government has introduced a bill to replicate the European Health Insurance Card (EHIC), meaning that expats should continue to receive healthcare abroad even in the event of a no-deal Brexit.

As it stands, EHIC entitles Britons to state health care when in an EU or EEA country (European Economic Area) for treatments that are “medically necessary” as well as those for pre-existing conditions. Furthermore, as long as a person has not travelled abroad with the specific intention of giving birth there, they are also entitled to routine maternity care.

Although the Healthcare (International Arrangements) Bill does not replace EHIC it clears a pathway to a fast-track bill that will “provide the powers that are needed” in the event of British citizens’ healthcare rights being threatened by Brexit. It also means that, contrary to the fears of many expats, affording private medical insurance may not be an issue they will need to discuss with their expat financial services provider.

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Pondering Pensions for Marbella Residents Post-Brexit

Puerto Banus, MarbellaAt the moment it there is only the slimmest possibly of a sudden and dramatic Brexit u-turn, with the consequences of the June 23 2016 referendum set to be formalised on March 31 2019. That’s why if you live in Marbella now is the time to ensure that your financial advisers in Marbella are fully attuned to all the issues that might affect you once Brexit becomes final.

Inevitably for many expats this will involve a discussion about their pension arrangements. Yes, expats already settled in the EU should continue to receive yearly inflation-accounting increases to their pensions, but as this is only guaranteed for three years, it is a quite significant caveat.

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