InsureExpats.eu

The Spanish Advantage (Pensions)

Many individuals find pensions confusing and the global recession and so called “credit crunch” has created a great deal of concern over pension invested funds. This is only compounded when you move overseas.

Well the overseas part shouldn’t worry you, in fact as a result of living overseas there are significant advantages open to you with regard to your UK pension arrangements.

In April 2006, UK pension legislation changed allowing persons living outside the UK to transfer their pension assets to an alternate overseas pension scheme. These have been formally named Qualified Recognized Overseas Pension Schemes or QROPS for short.

Although not for everyone, these schemes offer significant flexibility and tax advantages over that as offered by UK sited schemes. By transferring your existing pension assets to a QROPS you could save up to 55% in tax charges on 1st death succession and further 55% on 2nd death succession. In short this means that your heirs will truly benefit from your life time’s work rather than your adopted child the UK chancellor.

In the majority of cases a transfer to an overseas scheme proves to be in the policy holder’s best interest as advantages of transferring to a QROPS include:

· No need to make life long decision now that are locked in

· No requirements to purchase an annuity

· No requirements to pay UK tax charge upon death

· Tax efficiency on Income Drawdown

· Currency hedging (as you could receive your income in the currency of your resident country)

· Better inheritance provisions

· Far greater freedom of investment choices

To find out more or to find out whether transferring your existing pension arrangements to an overseas scheme is in your best interest please contact me on 0034 952 816 443 or 0034 628 549 531 or email me at david.rogers@blacktowerfm.com

Pension Planning

Are you aware that when you leave the UK you are no longer eligible to make pension contributions to your UK pension schemes? Your existing occupational or personal pension funds become “frozen” or “preserved” and therefore can grow at an alarmingly slower rate than when they were active. If you do nothing, when you reach your normal retirement age you can take a tax free lump sum of up to 25% of your fund. You will have three choices available for the balance of your fund:

1.Defer your pension until a later date (max. 75 years of age and accept a pension annuity investment). Probably not really what you want to do when your salary has ceased to be paid due to the fact that you are no longer in employment and no longer in receipt of an income or salary.

2.Take a pensionable income which will be taxed as earned income up to 40% based on your personal allowances and your total income from other sources; remember you paid tax on your income throughout your working life and so it may seem unfair to be paying tax again!

3.Purchase a pension annuity which will provide a pension for the remainder of your life which again will be taxed and depending on the type of annuity purchased, it will ´die ´with you on your demise. Worse still, pension annuity investment rates have decreased drastically in recent years.

The final piece of bad news… when you die, your surviving spouse will receive either a reduced pension or nothing at all depending on the type of annuity that you purchased.

The Alternative Unlock your UK Pension Now

The alternative is to transfer your UK pension fund to QROPS (Qualifying Recognised Overseas Pension Schemes). QROPS providers exist all around the globe and offer varying benefits depending on the jurisdiction in which the QROPS provider is based.

The benefits of transferring one or all of your existing pensions into an Her Majesty’s Revenue and Customs Approved QROPS scheme can be vast and include a wider investment diversification, income drawdown from a tax efficient structure and tax friendly environment with regards to annuity investment planning. The QROPS jurisdiction most suitable for you will depend upon many of financial and personal factors such as whether you wish to take an income now or in the future, how much cash you would like to unlike from your UK pensions, in which currency you would like to receive the income drawdown.

Many thanks to Peter Hardy of Lawsons Equity Ltd. for this very informative contribution.

For further information click here.

The “Who, Why, When, Where, What” guide to financial planning:

“Some say money can’t buy you everything… but money is the facilitator of choice… and to have choice… well to me that’s everything”

David J. Rogers, Independent Financial Adviser.

Who?

Unrivalled knowledge and experience in providing Tax, Wealth Management and Estate Planning services to private clients in Spain. My key strengths are that I take time to fully understand my clients and I provide a full range of services which enable my clients to:

Protect themselves from tax wherever they live

Protect and preserve their wealth and pensions

Organise their assets in the most effective manner so that they can be passed to their heirs as efficiently as possible

Despite what you might hear from others, there are no off-the-shelf solutions and every single one of our clients has their own personal concerns, responsibilities and ambitions.

The solutions that work for one, simply would not work for another.

So only by fully understanding where you are today, where you want to be in the future and understanding your attitude to risk versus reward can I truly provide a tailored solution for you.

“One things for sure making money requires planning – take time out to understand what you want and by when. Once you know your goal, there are a wide range of tools and investment strategies to help you get there and the performance of your investments could make a critical difference to your financial well being in the future. Therefore, reliable financial advice, investment products, tax and estate planning is vital and should not be left to chance; after all, we reap what we sow”

David J. Rogers, Independent Financial Adviser. …………………………………………………………………………………………………………………

Why?

“As conflicting reports on the state of the global economy continue, knowing what to do with your money can seem daunting. An independent financial adviser is best placed to assist you with your financial planning. An IFA can work with you to develop an appropriate investment strategy and review your plan to ensure that you remain on track and decisions are made with focus and cohesion”

David Elms, Chief Executive of “unbiased”

……………………………………………………………………………………………………………………

When?

We’re all so busy coping with our everyday lives that we often put off planning for the future. But every now and then something prompts us to think what would happen if?

However, in reality, the true cost of delay is not achieving your goals and dreams; not the actual cost of planning now!

Successful financial planning offers many rewards in addition to the obvious ability to meet your life goals. When IFAs were surveyed about the most significant benefit of financial planning in their own lives, the top answer was “peace of mind.” There are few benefits in life greater than this.

The truth is that a little time spent now on careful financial planning, means you can relax in the knowledge that you’ve got things covered.

Probably the greatest mistake you can make with regard to financial planning is to ignore it completely or delay so long that you consider the opportunity to do some planning has passed you by. While it is true that the younger you start the more beneficial the process will be, financial planning is worthwhile at any age.

“I look to the future because that’s where I’m going to spend the rest of my life.”

George F. Burns, Author and comedian

To find out Where and What or if you’re interested in learning more about the tax and financial planning issues that affect you and your assets here in Spain please contact David here. He will be delighted to offer you a full ‘financial health check’.

Neither the information nor the opinions herein constitute, or are they to be construed as, an offer or a solicitation of an offer to buy or sell products or investments. Before offering any financial advice I need to carry out a full fact find to establish your individual circumstances, your objectives and your attitude to risk, solutions will then be tailored to meet your specific needs.