Common Client Issues - Is this you?

Fiduciary Wealth Team

Having been meeting and speaking to prospective clients at various open days both on Costa del Sol and Costa Blanca over the last few weeks some common themes and problems have emerged when it comes to specific financial planning issues.

Do any of these sound familiar?

Clients intending to move to Spain have been advised to invest in a UK offshore bond and “benefit” from 5% tax free withdrawals.

Whilst these types of bonds can be extremely tax efficient for UK residents they are unlikely to be compliant in Spain especially if they are issued by a provider based in the Isle of Man or the Channel Islands. Spain has its own version of this type of bond, or tax wrapper as it is commonly called. Unlike the non compliant version which will be taxed whether or not withdrawals are made, the Spanish compliant option offers tax free growth with tax deferred until a withdrawal is made and at that stage only the growth element of the withdrawal will be taxed.  

Get in touch now and see how we can help.

Clients have been advised to transfer their pension to a high cost QROPS investing in riskier, less flexible funds.

You should consider very carefully your QROPS advisers. There are two elements to transferring your pension. Firstly you need to be comfortable that the Trustees are acting in your best interests and complying with the regulations as set out by HMRC. Second and equally important you need to know that the company responsible for investing your pension funds is acting in your best interests and not just chasing higher commissions by investing in non tradtional assets. Your adviser should agree an investment strategy with you and the Trustees at outset and pro actively manage your pension fund to achieve these objectives. After all what use is a tax efficient investment where you can withdraw income at extremely low rates of tax, if the underlying investments are not performing.

If you are unhappy with your existing QROPS consider switching to an alternative adviser. If you are considering your options then get in touch now to see how we can help.

You may be liable for UK inheritance tax and Spanish succession tax

Just leaving the UK doesn’t mean that you are no longer subject to inheritance tax which is actually dependent on domicile which is a completely different concept than residence. Do you want your beneficiaries to lose out because you have not taken action to protect your assets. If you own property in Spain and have retained assets in the UK or have only recently left the UK then the likelihood is that your estate will be liable for inheritance tax above the threshold (currently £650,000 for a married couple) as well as your beneficiaries being liable to pay tax in Spain on your assets held here.

How can we help? Well there are any number of potential solutions dependent on your specific situation. The main thing is not to bury your head in the sand and take action sooner rather than later. There are legitimate ways of mitigating these taxes but the longer you leave it the more difficult it can become.

Whatever financial issues you face a meeting with one of our team of cross border experts should help you address your concerns and find the best solution to suit your needs. For an appointment to discuss your requirements in detail contact 956796911 or email