It is the time of year when we tend to reflect on the previous 12 months and look ahead to what the coming year may bring. It is a good time to reflect on your financial planning and ensure it is up-to-date and designed to protect your long-term wealth for you and your family.
Perhaps the biggest concern for many British expatriates has been Brexit and the uncertainty over residence rights and healthcare.
On 8th December 2017 the UK and EU presented a joint “progress report” which confirmed that they agreed to maintain existing rights for EU nationals settled in the UK and Britons in the EU.
If you already have official permanent residence status in Spain, you should be able to look forward to a secure future here. The rules for healthcare also remain the same as now.
If you have not yet registered as tax resident, the clock is ticking. You need look at obtaining official permanent residence ahead of the UK’s withdrawal date, scheduled for March 2019. Take specialist advice on how to benefit from the Spanish tax rules to ensure you are in the best position to enjoy life in Mallorca. If you are still at the planning stages of moving to Spain, you may wish to accelerate your plans so you can become resident before March 2019.
It is always a good idea to review your tax planning from time to time to confirm it is up-to-date. Take advice to ensure you are taking advantage of the tax planning opportunities available in Spain. The right tax-efficient arrangements can keep most of your investments in one place and help you legitimately avoid paying too much tax.
The new global automatic exchange of information regime, implemented through the Common Reporting Standard, is well underway. 50 jurisdictions, including Spain and the UK, began collecting client data from January 2016 and made the first exchange by September 2017. Another 50 jurisdictions will start sharing by September 2018.
Cross-border tax planning is complex, especially if you earn income in one country and live in another. Are you sure you are paying tax in the right place? Specialist advice can give you peace of mind as well as potentially save you tax.
Savings and investments
In November 2017 the Bank of England increased the UK interest rate for the first time in over ten years. It was by no means a seismic shift – just back to 0.5% from 0.25% – and has your bank increased the rate you are getting on your savings? Keeping too much of your retirement savings in cash can be risky, if you are not earning enough to keep pace with inflation.
Successful investing is about managing risk versus return and having a well-thought out strategy specifically based on your personal circumstances, time horizon, needs, aims and risk tolerance. You should obtain a clear and objective assessment of your appetite for risk, then match your profile to the optimum portfolio. Ensure you have adequate diversification, so you are not over-exposed to any given asset type, country, sector or company.
You should then review your portfolio around once a year, because as asset prices rise and fall it can become unbalanced, and your circumstances may have changed.
Today’s pension landscape is quite different from a few years ago, so spend a little time to establish the best course of action for your funds. There are more choices than ever, but this means that great care must be taken to ensure you make the right decision for your objectives and to protect your retirement savings. Weigh up all your options, as well as the tax implications in Spain and the UK, to establish the best course of action for you.
It is important to review your estate planning after moving to Spain, as both succession law and tax work very differently to the UK.
How much succession and gift tax your heirs will pay depends on the degree of relationship to you, their pre-existing wealth, the local rules in your region and whether the local or state rules will apply. There may be steps you can take to lower their tax liability.
Spain imposes forced heirship, which may prevent you dividing your estate as you wish. You can however use the EU succession regulation ‘Brussels IV’ to opt for the succession law of your country of nationality to apply, but must state this in your will. Take advice first to confirm if this is the right course of action for your family.
More about Blevins Franks tax advisors
For more information and personalised advice, contact Blevins Franks on +34 971 719 181.
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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Blevins Franks Mallorca specialises in giving advice for tax-driven, wealth management investments. […] Blevins Franks Tax & Wealth Management Specialists
This article was written on January 2nd, 2018.