10 years in Spain - What has happened Keith Blacktower Agent & Advisor

This year will be my tenth anniversary of coming to live in Spain. Like many expats, over the years I have been impacted by frequent changes that have affected the way we live and the way we deal with our finances.

A series of global events have seriously impacted on the world economy in that time – many of which you will have forgotten. Although it seems a lifetime ago, it’s only 12 years since the worst financial crisis in history (pre-Covid) which resulted in huge financial institutions being bailed out by governments and saw a massive stock market crash. 

In more recent years we have experienced several weather phenomena that have really hurt the economy. The worst of these arguably being the Japanese Tsunami which nearly caused a nuclear disaster along with earthquakes which caused the Fukashima Nuclear plant to leak radioactive material.

We have also seen the Greek debt crisis of 2015, where banks halted paying out any funds to the public whilst Ireland received EU support to prevent the same thing happening there – also the Iraq war and the rise of the Taliban which saw oil prices plummet. In 2020 we had the beginning of the Covid-19 Pandemic which is ongoing and the true financial impacts of which will not be fully known for years to come.

In recent years there have been a number of specific issues which have affected British expats who came to live in Spain.

2012 foreign asset declaration requirements

When this came into law initially it caused major panic in the expat communities of Spain and even caused people to move back to the UK. Most people thought that this going to be yet another ‘tax grab’ by the Spanish government and much scare mongering went on due to the sizable nature of the fines that were being imposed for not declaring accurately. Whilst it has been a method for the Hacienda to collect the right taxes from people it was not a ‘tax grab’. Yes it has caused many to pay more in tax but with the correct advice and direction this can be mitigated in many ways.

2015/16 UK pension legislation changes

Initially this was described in the news as new legislation to help people have more control over their pension schemes and freedom to do what they wanted with their own funds. I even remember it being reported that people could now go out and buy Lamborghinis with their pension funds if they wished. There were a host of pension reforms in this pensions act aiming to help employers and boost the economy in general. It also meant that the government could draw in tax payments from the public if they had access to their money quicker (as additional tax breaks would not be given). This has enabled many people to use their pension funds to buy property in Spain under the flexible benefits regime and retire earlier than normal as they can bridge the gap in income until they start receiving their state pensions.

2016 Brexit announcement

Brexit has, and will have, many ramifications for UK expats living in Spain, most of which are still unknown. What has happened in the last few months is that to stay in Spain people have had to ‘bite the bullet’ and become fiscal residents, provide for their own healthcare and actually apply for residency. Prior to Brexit, many people lived in Spain part-time and continued to use the UK as their financial base – this is no longer an option. This is the current situation, but back in 2016, the actual referendum result had a massive impact for UK expats in Spain. The Euro/Pound exchange rate plummeted by around 15%. This meant anyone receiving income in Sterling or UK pensions now faced a 15% pay cut. Alongside this, certain banks have closed accounts for customers that live outside the UK and UK financial advisers can no longer look after EU clients. If this is the case for you, contact me and I will be able to help.

Covid-19

Although this is a worldwide pandemic, there are problems that have occurred as a result that are unique to UK Expats. There are genuine concerns about the healthcare situation, the language barrier causes additional stress when trying to understand updates to the situation, but the main problem are the restrictions we have on travel preventing our visiting family back home in the UK. This is further compounded by the travel restrictions caused by Brexit. Going back to the UK to sort out finances and property, or to visit the family are firmly put on a hold. One positive however seems to be that everyone is getting better with IT and using social media. Also money is being saved due to a lack of not travelling and socializing, so people are putting a little extra by. Fortunately for us we are a resilient bunch!

If you want more information or wish to make an appointment to discuss your own situation then call 657684094 or email keith.littlewood@blacktowerfm.com. The local Blacktower office address is: 120 Avenida Dr. Artero Guirao 2C. San Pedro Del Pinatar, 30740, Murcia, Spain. Our office suite is easy to find on the main N332 through road of San Pedro del Pinatar with easy parking.

The above information was correct at the time of preparation and does not constitute investment advice and you should seek advice from a professional adviser before embarking on any financial planning activity.

Blacktower Insurance Agents & Advisors Ltd is authorised and regulated in Cyprus by the Insurance Companies Control Service and registered with the DGS in Spain. Blacktower Financial Management (Cyprus) Ltd is authorised and regulated in Cyprus by the Cyprus Securities & Exchange Commission and is registered with the CNMV in Spain.

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Financial Advice Issues for Expats in Spain

I have been a Qualified Financial Adviser for almost 35 years now. 25 years in the UK for major institutions such as Natwest, RBS and Royal London. I have been in Spain giving expats financial advice now for 10 years and it is quite remarkable the different approaches as well as advice that is required for an expat now living in Spain.  Blacktower is a company that has specialised in providing the best solutions for its clients living outside the UK for 30 years also.

The currency issue is always high on the agenda and a discussion for the long term future has to be taken onto account.  Questions like What will happen if one partner dies? Will the other remain in Spain? What about other family members? What Inheritance tax provisions do you have in place? The list goes on and on.

Existing portfolio’s and investments that were the mainstay of portfolios in the UK may now be obsolete.  An example of this is quite often tax efficient products in the UK like ISA’s and previously held TESSA’s PEP’s actually have low growth rates and provide no tax advantage to a Spanish fiscal resident.

Existing Pension holdings either paid by the state or private pensions built up through working lifetimes are topics that have to be covered.  Many expats have lots of small pensions from many ex employers and can be confused by the communications and administration in dealing with them.  At Blacktower we specialise in advising on how to consolidate and bring all these pensions together in one place.

Bank accounts and investments in Spain always bring up lots of questions too.  Quite often the small print associated with financial products in Spain is in Spanish this can make it very difficult even if you have a good grasp of the language.  Understanding Jargon in English is sometime difficult enough.  I provide clear easy to understand letters and documents in English so that you fully understand any terms and conditions before making a decision.

Advice on tax efficiency is just as important and offering good returns.  There are products available exclusively for Spanish expats that can provide invaluable benefits.  Having a good base knowledge of the tax implications both now and in the future is an essential ingredient to making a sound decision.

I will complete a thorough factfind, ask you the right questions, establish your individual needs, attitude to risk and capacity for loss and desired returns before providing you with a full written report of advice and my recommendations in plain English.  You will then have time to read and consider all the information before contacting me with how you wish to proceed.

Click for more information about Keith Littlewood.

The above information was correct at the time of preparation and does not constitute investment advice and you should seek advice from a professional adviser before embarking on any financial planning activity.

Blacktower Financial Management (Int) Ltd is licensed in Gibraltar by the Financial Services Commission (FSC) and is registered with both the DGS and CNMV in Spain