New pension fund freedom
The new pension freedom from April 2015 is welcome news for anyone with UK pension funds, whether they are resident in the UK or here in Spain. If you live here, it could help you restructure your pension savings so that they are more suited to your current circumstances as a Spanish resident, though you also need to consider possible future plans.
Your pension savings are essential for providing you with financial security right through retirement. Deciding what to do with your funds once the new rules come into effect could be one of the most important financial decisions you make.
Spanish tax authority has published a list of Q&As regarding asset reporting obligations that ABC Mallorca readers will find very useful, here are some paraphrases of various key points. […] Asset Reporting Obligations – Q&As
Taxation in the UK and Spain
It is therefore vital that you have all the facts about your new options, and then carefully consider the implications of each option. This includes taxation in the UK and Spain; leaving the balance to your heirs; what control you have over investment options; what income will be generated, and ensuring you do not run out of funds in your later years. You can only determine which option is right for you once you have weighed them all up.
Specialist, professional advice is essential. It is the only way to ensure you have all the information and understand how each option affects you. Your personal situation is unique – just because you hear of people taking one approach does not mean it is right for you.
Spanish residences have until the 31st of March to submit their Form Modelo 720 declaring their worldwide assets. Find out what you need to do now! […] Modelo 720: what do you need to do in 2015?
Key changes that affect your pension
Here is a summary of some of the key changes for those aged over 55 with defined contribution schemes.
From 6th April 2015 you will be able to draw down as much of your pension funds as you like, even the whole amount. You could take a series of lump sums from your pension funds without having to enter into a drawdown policy.
The 55% pension ‘death tax’ will be abolished, including for annuities. Your beneficiaries will receive the balance tax free if you die under age 75, or pay income tax, or 45% if taken as a lump sum, if you are over 75 (which could change to income tax rates from 2016). This does not affect people in final salary pensions.
Many of the new pension options apply specifically to defined contribution schemes. From April 2015 those with private sector defined benefit pensions (final salary schemes) could transfer to a defined contribution scheme, but be aware that you could lose valuable benefits – so this would need very careful consideration. Transfers can only be made with advice from a pension transfer specialist regulated by the UK Financial Conduct Authority. Most Public Sector schemes will not be able to transfer after April 2015.
The UK Chancellor of the Exchequer, delivered his Autumn Statement on the 3rd December, which may affect expatriates living in Spain, depending on your circumstances. […] The UK Autumn Statement: How does it affect you?
Seek professional advice
Taking professional advice from a regulated adviser like Blevins Franks will give you peace of mind that they are following all the rules and providing suitable advice for you. Sound financial planning and personalised advice is crucial, particularly for those with larger funds.
Tax rates, scope and reliefs may change. Any statements concerning taxation are based upon our understanding of current taxation laws and practices which are subject to change. Tax information has been summarised; an individual is advised to seek personalised advice.
Blevins Franks Financial Management Limited (BFFM) is authorised and regulated by the Financial Conduct Authority in the UK, reference number 179731. Where advice is provided outside the UK, via the Insurance Mediation Directive from Malta, the regulatory system differs in some respects from that of the UK. Blevins Franks Trustees Limited is authorised and regulated by the Malta Financial Services Authority for the administration of trusts and companies. Blevins Franks Tax Limited provides taxation advice; its advisers are fully qualified tax specialists. This promotion has been approved and issued by BFFM.
More about Blevins Franks tax advisors
For the South of Mallorca contact Peter Worthington, Senior Partner at Blevins Franks, on +34 971 719 181 or email@example.com.
To keep in touch with the latest developments in the offshore world, check out the latest news on Blevins Franks Tax & Wealth Management Specialists.
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