Are you resident in Spain but have a UK based Financial Adviser?
Recently, I was contacted by a UK based Financial Adviser. He was someone I had worked with in the past and I knew he was a good reputable client-focused professional. He knew I had been giving Financial Advice to clients in Spain for nearly 10 years and wanted my help with a problem with one of his clients.
His client lived in Murcia and became resident in Spain 2018. He helped her start receiving her pension benefits last year which included a Pension Commencement lump sum of around £200,000 which she used to purchase a property. In the UK this lump sum is tax free if you are a UK resident, but in Spain it is treated as earned income and therefore adds to that year’s earnings when putting your tax returns forward. The Adviser was not aware of this as he had never dealt with this situation before. The client now faces a tax demand from the Hacienda of over £70,000 which could have easily been avoided had the client spoken to an experienced Financial Adviser that was authorized and based in Spain.
This is a common problem in the UK with Advisers. They want to retain their long-standing clients with whom they have a trusted relationship and want to continue to receive the trail commissions and annual fees, but quite often they can be ignorant to the financial harm that could have on their clients. Now following Brexit it is actually very unlikely that a UK based financial adviser will have all the passporting requirements needed to actually give regulated advice anymore.
I was a Financial Adviser in the UK for over 20 years working for big institutions and even training up new advisers when I worked for NatWest Bank. I thought I knew everything there was to know about giving financial advice; after all I was experienced and passed all the qualifications. When I moved to Spain 10 years ago it was like learning a completely new job. The tax system was different, the products were different and for the first couple of years I felt like a novice and getting to grips with the constant rule changes was a nightmare. In my opinion a UK based adviser should never be responsible for giving Financial Advice to someone based in Spain as they have no idea of the implications the advice could give.
Two most common areas for UK ExPats in Spain with regard to Financial Advice from their UK Based advisers are:
Taking benefits from their Pensions and understanding the tax implications.
Investing money without any idea as to how this impacts the clients with regards to Modello 720 (asset declarations) and tax returns.
I quite often work alongside UK based advisers to assist their clients to prevent them making catastrophic mistakes like the one above. If this relates to you, it will not cost you anything just to have a meeting and make sure you avoid any future financial headaches.
Please remain safe with your health and your wealth and contact us if you want to have a review of your portfolio or would like to look into the opportunities ahead.
120 Avenida Dr. Artero Guirao 2C
San Pedro Del Pinatar
Our office suite is easy to find on the main N332 through road of San Pedro del Pinatar with easy parking.
If you want more information or wish to make an appointment to discuss your own situation then call 657 684 094 or email firstname.lastname@example.org
Blacktower Financial Management (International) Limited is licensed by the Gibraltar Financial Services Commission. Licence 03647. Blacktower Financial Management Limited is authorised and regulated by the Financial Conduct Authority in the UK and is registered with both the DGS and CNMV in Spain.
Blacktower Insurance Agents and Advisors Limited is authorised and regulated by the Cyprus Insurance Companies Control Service (ICCS) under Licence number 5101. Regulation is limited to Insurance Mediation activities within the European Economic Area.
Blacktower Financial Management (Cyprus) Limited is licensed and regulated by the Cyprus Securities & Exchange Commission (‘CySEC’) with Licence number 386/20 for the investment services of Investment Advice and Receipt & Transmission.