http://blacktower.shinemarketing.com/index.php/site/index/ en paula.smith@blacktowerfm.com Copyright 2012 2012-04-11T12:59:45+00:00 http://www.blacktowerfm.co.uk/site/vale-do-lobo-seminar/ http://www.blacktowerfm.co.uk/site/vale-do-lobo-seminar/#When:11:59:45Z Vale do Lobo Seminar - 13th April 2012 Due to the overwhelming success and positive feedback from their last seminar, Blacktower is now proud to announce, by popular demand, their forthcoming Spring Seminar, ‘Protecting and Increasing Your Retirement Income’. The seminar will take place in the Vale do Lobo Auditorium in conjunction with the Vale do Lobo Luxury Golf & Beach Resort. The event will be chaired by Blacktower and guest speakers will be flown in to attend this very important seminar. The impressive line-up will include internationally renowned names from Europe to deliver short, interesting presentations to attending guests. These will include professionals from leading product providers and international tax and pension specialists to collectively offer a wealth of advice for you and, of course,  Blacktower’s own in-house financial and mortgage advisers, investment specialists and wealth management professionals. The guest speakers will be representing their companies as follows: • BDO Iberian Tax Desk • Henderson Global Investors • Lombard Odier Private Bank Ltd • LM Investment (Australia) Ltd • Sovereign Asset Management Ltd Blacktower has arranged for additional car parking space for this event, which will be a short distance from the Auditorium and clubhouse. This can be found by taking the last exit from the roundabout by the club car park and there will be someone on hand to direct you if necessary. The seminar will commence at the Vale do Lobo Auditorium at 10.30am for registration and morning tea, coffee and refreshments. The first speaker will commence at 11am. After the seminar, an informal buffet will be held where guests can interact with speakers and other specialists on hand to answer any questions the guests may have or to give sound advice where needed. While sipping a refreshing glass of wine or enjoying a tasty canapé, why not take advantage of the wealth of expert help and advice available to maximise your financial lifestyle and protect your hard-earned money from the erosion of inflation and unnecessary tax payments? Today there are a lot of people who are very frustrated with ever decreasing income and effective purchasing power. It could be, by reviewing one’s present financial situation, it might be possible to restructure your investments to increase the income generated and, hopefully, future value. Additionally, you may well need help in making that special holiday or full time home purchase in the beautiful Vale do Lobo and surrounding areas, so be sure to get the right mortgage advice from Blacktower Financial Management’s experienced mortgage advisers who will also be on hand during the day. ■ If you wish to attend the Spring Seminar, please contact Paul Beckwith on +351 289 355 685 or email paul.beckwith@ blacktowerfm.com and take advantage of this ideal venue to give yourself a well earned treat to a buffet seminar that could enhance your lives throughout 2012 and beyond. As  Independent Financial Advisers, Blacktower seeks to ensure that their clients receive the advice suitable for their specific circumstances. 2012-04-11T11:59:45+00:00 http://www.blacktowerfm.co.uk/site/qrops-changes-ahead/ http://www.blacktowerfm.co.uk/site/qrops-changes-ahead/#When:09:10:23Z In reality there will not be a lot of change, and Qualifying Recognised Overseas Pension Schemes (QROPS) will continue much as they did. The new legislation has no adverse tax consequences for clients transferring their pensions to a QROPS, and importantly the legislation will be simpler and clearer for all. Several jurisdictions do not currently meet the proposed qualifying criteria, and this means schemes from these jurisdictions may lose their QROPS status at midnight on 5 April, 2012. However, HM Revenue & Customs (HMRC) has given the guarantee that all members in these schemes are protected, as their transfer to the QROPS will give rise to no tax and, provided that the schemes have been run within the rules, particularly in the first five years of non-UK residency, there should be no adverse tax implications. Hence clients are being protected. In addition, during the consultation period regarding these changes, which ended on 31 Jan, affected jurisdictions and providers made their case to HMRC. The view was that the changes would not be amended and would come into force on Q-day, and some suggesting a small postponement to the enforcement of the new criteria. Reality and circumspection are, however, ruling the day, and affected jurisdictions are addressing the proposed changes head-on, by looking to adapt their tax legislation accordingly. The big question is whether or not they will get them in on time, which from reports seems likely, particularly for Guernsey, which is by far the largest player in the market. New legislation always leaves a period of time where the old legislation is still in play, and QROPS is no different. Hence, the time is now for clients and advisers who want to transfer schemes under the current rules and hence current practices, rather than the post Q-day rules which are not retrospective. This may be particularly beneficial to clients who have been non-resident for a full five years, as the new reporting rules should not apply to them. Pension transfer is not a speedy business, however, and paperwork should be done as soon as possible, as there are just a few weeks left to make a transfer. Guernsey Of all jurisdictions, Guernsey has the most to lose as the market leader, measured in terms of pension assets under administration. While it is neck-and-neck with New Zealand in terms of transfers, the primary reason for using New Zealand is encashment, so when the chips are down it is assets that drive revenues and provide jobs. Hence, economics and politics will naturally favour Guernsey, in terms of evolving a suitable tax regime to ensure qualification with the tax recognition requirements and in particular Condition 4. In terms of how this will be achieved, one only has to look to the enhancements of Condition 2, where significant detail and clarity has been provided by HMRC, which allows either tax relief or tax exemption to apply to a scheme. In other words, tax relief or tax exemption can be applied to contributions either going in or coming out of a scheme, but not both. Condition 4, the new condition, simply ensures that this treatment is applied consistently to the member irrespective of residence. My guess is that this will lead to a new range of retirement saving vehicles from several jurisdictions in the months to come, but now it provides the necessary framework around which Guernsey can evolve its legislation. Guernsey’s ability to evolve has always been their main strength, as they have always shown a  capability to re-invent themselves over the past decades. Speed, flexibility and creativity have always been the jurisdiction’s key strengths, and points of competitive differentiation over many other territories. This has not changed. It is safe to say that Guernsey is working at an advanced stage in terms of adopting measures to ensure qualification post Q-day. Whether this will be achieved by the deadline only time will tell. But the likelihood of a positive outcome is high, which bodes well for the jurisdiction and those advisers that favour Guernsey product and provider support. This facility is not suitable for all expatriates, and we recommend that advice is sought before one makes any commitment.  As an Independent Financial Adviser, Blacktower seeks to ensure that our clients receive the advice suitable for their specific circumstances.  Please contact us for further details 289 355 685'  2012-03-09T09:10:23+00:00 http://www.blacktowerfm.co.uk/site/property-predictions-what-nex-for-2012-algarve/ http://www.blacktowerfm.co.uk/site/property-predictions-what-nex-for-2012-algarve/#When:10:31:12Z For a decade or more, prior to 2008, investing in Algarve property looked like a sure-fire way of sitting back; enjoying a wonderful lifestyle and watching your property soar in value. Well, only four years on and it feels as if we are living in a different world. During 2011 falling demand drove prices lower and it is this which is still keeping prices down. There will be no significant improvement in the market until investor confidence returns in the home countries of the non-resident purchasers and a credible political plan for Europe and the Euro starts to show results.   To have any idea of what might happen to Algarve property prices in 2012 we need to take a look at the main areas of influence – the Portuguese economy, the UK economy, the Euro-zone economy and the banking industry. The Portuguese Economy. During 2011 Portugal has been in the spotlight – mostly due to the need for an €78 billion bailout package from the European Union and the International Monetary Fund. To meet the terms of the bailout there are dramatic cuts in spending and increases in taxation. The 2012 budget proposals are significantly more severe than the 2011 measures. The austerity measures are designed to help the government meet its planned budget deficit reductions and it continues to expect the economy to return to growth in 2013. But hey ho! They say that all publicity is good publicity – we shall see. The UK Economy. The OECD (Organisation for Economic Co-operation and Development) predict that the weak economic recovery of 2011 will see improved growth in 2012. It concludes that the government’s public spending cuts strike the right balance and should continue even though unemployment is likely to increase in the short term and inflation will not meet it target until late 2012. However there have been concerns about Britain’s economic recovery and the severe adverse effects the euro-zone debt crisis could cause. Hopefully the fear of the economic recovery being destabilized by euro-zone events has, at least in part, been allayed by the decisions taken in late October 2011 by Europe’s leaders to solve the regions huge debt crisis. The Euro-zone economy. Following the realization that Greece would not be able to pay back its debts – and therefore default - the potential risk of contagion through an unresolved euro-zone crisis appears to have diminished with the euro-zone debt agreement. This agreement requires banks holding Greek debt to accept a 50% loss, the bailout fund to be boosted to €1 trillion and a requirement that banks raise more capital. Subject to this agreement being implemented, we seem to be a step closer to Europe resolving its financial and economic crisis but with still some way to go. The Banks. Currently Portuguese banks are highly exposed to the Portuguese economy through loans and at risk through their sovereign debt exposure while currently having no access to wholesale markets. To comply with the euro-zone debt agreement, they are likely to need €7.8 billion to boost their reserves. While there is provision to cover this through the bailout fund, the government is anxious to ensure that creaking balance sheets are not strengthened at the cost of banks reducing credit available to companies and individuals. To their great credit, some Portuguese banks continue to make funds available for mortgages and equity release and this will certainly continue in 2012. So based on the above, are we able to make any predictions on how the Algarve property market might move in 2012? Leaving sentiment behind, it looks likely that austerity measures, bailouts and euro-zone debt agreements will come together to achieve some positive results which will be reflected in reduced budget deficit figures together with an increase in stock markets and investor confidence. This in turn should translate into individuals regaining the confidence to make major decisions – including property purchase. While I believe that the increase in prospective purchasers will result in improvement in the property market towards the end of 2012, any return to pre-2008 levels is likely to be some years away. To this end it will be the responsibility to agents to convince vendors to price properties realistically – while at the same time ensure that purchasers know huge discounts are no longer available on already ‘discounted’ properties Because of continued uncertainty in job markets and high unemployment within many European countries, it seems likely that many prospective purchasers will be retirees or those looking for investment opportunities. Investors realize that property can provide a safer and more productive investment than the stock market. Rightly or wrongly, prospective purchasers will inevitably be influenced by any continued economic turmoil. In summary, the fate of the Algarve property market is largely in the hands of the decision makers in Europe and our own politicians in Portugal Property investment is not suitable for everyone and we recommend that advice in sought before making any commitment As an independent financial adviser, Blacktower seeks to endure that clients receive advice suitable for their circumstances. Please contact Linda Kenny F.C.A., International Mortgage Adviser, on 289 355 685 or 917 642 301. Blacktower Group with offices in the United Kingdom, Gibraltar, Portugal, Spain & France.  Blacktower Financial Management (International) Ltd is licensed in Gibraltar by the Financial Services Commission (FSC) License No. 00805B Blacktower Financial Management Ltd is Authorised and Regulated in the UK by the Financial Services Authority.           2012-02-10T10:31:12+00:00 http://www.blacktowerfm.co.uk/site/qualifying-recognised-overseas-pension-schemes-qrops/ http://www.blacktowerfm.co.uk/site/qualifying-recognised-overseas-pension-schemes-qrops/#When:10:25:34Z Qualifying Recognised Overseas Pension Schemes (QROPS) Update from Blacktower Financial Management Group Limited regarding HMRC’s proposals for Overseas Transfers of Pension savings. It is now one month since Her Majesty’s Revenue and Customs (HMRC) issued their draft forms and notes of completion regarding Overseas Transfers of Pension Savings. HMRC further issued draft guidance on 20 December 2011 in relation to the changes to the system for transferring pension savings to a QROPS, that was the subject of the 8 week consultation period ending 31 January 2012. As reported, HMRC surprised the QROPS industry on 6 December with a package of proposed changes to the rules that govern how UK taxpayers may transfer their UK pensions overseas. The changes were aimed at cracking down on reported abuse of QROPS by some practitioners as well as an effort by HMRC to tighten up its oversight of the industry. The new legislation, if enacted, would take effect from 6 April. In the past month or so, a great deal of work has been undertaken by the Guernsey Association of Pension Providers (GAPP), and the Guernsey Income Tax authorities to ensure the best possible outcome for Guernsey as a continuing jurisdiction for QROPS. These activities have included preparing a response from GAPP to HMRC as part of the consultation process, which may result in alterations to the initial drafts issued in 6 December 2011, or may result in a deferral in their implementation, (as was recently seen with the statutory residence test proposals which have been delayed until 2013). Guernsey’s QROPS industry has become a significant local employer in recent years, and for this reason, pension industry providers on the island are optimistic that States of Guernsey lawmakers will approve the proposed scheme when it comes before them for a vote on 6 March. As currently drafted, the proposals will require a 10 year reporting period to HMRC but the 5 year member payment provisions remain unchanged. Thus, for existing members, taking the worst case scenario where current schemes lose QROPS status (which now seems very unlikely) at 6 April 2012, the impact for existing members does not appear significant (nor as currently drafted, retrospective). In fact, as a non-QROPS, such schemes would have no reporting requirements to HMRC, but the original transfers remain authorised. This contrasts with previous schemes that have lost QROPS status in other jurisdictions, as in fact, such schemes never actually qualified for QROPS status, and thus created unauthorised transfers. In its response to the proposed changes, the Guernsey Association of Pension Providers (GAPP) has said it agrees that most of the proposed changes are appropriate, but takes issue with what is known as the “Condition 4” clause, which effectively means that residents and non-residents must be treated equally in terms of tax on all QROPS scheme benefits paid. This is where the proposed new Guernsey pension scheme, which the Guernsey lawmakers will consider in March, comes in. The as-yet-unnamed scheme would treat Guernsey residents and non-residents the same – with no Guernsey tax due on benefits paid – in order to meet HMRC’s concerns. Currently, Guernsey, like most QROPS jurisdictions with a significant non-resident QROPS industry, have tended to tax their residents’ pensions but not those of non-residents, who were assumed to pay tax on their pension income in the country in which they lived. For this reason, the proposed new Guernsey pension structure does not provide tax relief on pension contributions to Guernsey residents – unlike the pension structure currently used by most Guernsey residents. This is seen as reducing the likely decline in tax revenue to Guernsey that would result from the sudden loss of pension tax income if many residents were to suddenly switch to the new, nil-tax-on-benefits-paid, regime. It is not known how many Guernsey residents are employed by the QROPS industry, but anecdotal evidence suggests that it has grown considerably since Qualifying Recognised Overseas Pension Schemes were created as part of HMRC's overhaul of Britain's pensions industry in 2006, known as A Day.   The Freedom of Information Act data obtained by Guernsey-based Concept Group from HMRC revealed that 32% of total UK pensions transferred abroad in the first part of 2011 went to Guernsey, making it the No. 1 jurisdiction worldwide in current transfers. In terms of total transfers since 2007, it is in third place, with 10%, behind Australia (47%) and New Zealand (23%), the data shows. For clients that are intending to retire abroad, a QROPS product could be the right solution for them. But, like any pension arrangement, QROPS are long-term investments that require thorough research before recommendation. Blacktower will do it's best to ensure that is has compliant QROPS schemes after 6 April 2012, and is working diligently to this end. Blacktower welcomes the fact that henceforward it will be working on a more level playing field and that certain jurisdictions formerly used to paying Pension Commencement Lump Sum beyond 30% have been curtailed. This facility is not suitable for all expatriates, and we recommend that advice is sought before one makes any commitment.  As an Independent Financial Adviser, Blacktower seeks to ensure that our clients receive the advice suitable for their specific circumstances.  Please contact us for further details 289 355 685'    2012-02-10T10:25:34+00:00 http://www.blacktowerfm.co.uk/site/the-size-of-the-beast/ http://www.blacktowerfm.co.uk/site/the-size-of-the-beast/#When:12:29:13Z Whilst China has the second-largest economy in the world, it also has 20% of the global population and 25% of the labour force. Nevertheless, the country only accounts for 14% of the world’s gross domestic product, a figure distinctly disproportional to its population. Although the statistics show China is already a global powerhouse, it still has vast potential to expand. If there is to be a rival to the dollar as the world’s reserve currency in the 21st century, it surely could be the Renminbi (RMB) – the currency of the People’s Republic of China. By 2015, half of international trade operations (USD 2 trillion) could possibly pass through Hong Kong.  Over time, it is believed that the final phase of the RMB internationalisation process will mean foreign holders of RMB have the capacity and desire to retain and invest their RMB funds both in and out of mainland China.  To complete the process, Chinese authorities would like to make the currency fully convertible.  To accompany the process initiated by officials, Hong Kong’s strength as an offshore centre lies in its ability to develop a wide range of RMB products and services Time for a breakthrough Meanwhile, Chinese policymakers have already introduced multiple accommodative taxation, trade finance and capital account measures to ease the internationalisation process of the RMB. The primary aims are to reduce costs on foreign exchange transactions and for the RMB to increase in value. Overall, this should encourage investors to switch to the currency in favour of the US dollar. The offshore RMB bond market is growing rapidly and current demand largely exceeds supply. Growth is driven by the restrictions on access by foreign investors to the onshore RMB bond market. Bond issuance is key for the market to continue growing and we believe new issuance should remain strong. Outstanding offshore RMB bond issuance is around RMB200bn (as at end October 2011);  The pipeline suggests another RMB50-100bn for the rest of 2011;  Some European and North American companies may be using the offshore RMB market for ‘instant recognition’ in Asia;  The market is becoming more ‘two way’, and issuance is mainly from high quality issuers    Even if the story of China’s economic might is nothing new, that does not mean to us that investors have missed the opportunity. Quite the contrary, we see at least three forces that should help support local growth and investment opportunities over the coming years, including long-term macroeconomic plans, the coming political transition period and growing RMB-denominated markets. We also believe investors have ample means to get exposure to the China story in portfolios both directly and indirectly. It seems that signs of a breakthrough are already slowly appearing for those investors wishing to enter the Chinese market - how appropriate for the year of the Dragon. Fund Houses to look out for in particular would be those like HSBC who have great experience and knowledge of China and its potential – so take a look at the RMB Fixed Income Fund for example. 2012-01-30T12:29:13+00:00 http://www.blacktowerfm.co.uk/site/Lots-of-Bad-News-in-the-Press/ http://www.blacktowerfm.co.uk/site/Lots-of-Bad-News-in-the-Press/#When:12:24:29Z Speak to any Fund Manager and they will say that valuations matter most of all. To generate long-term returns investors need to buy financial assets when they are cheap, not when they are expensive. So how much bad news is now in the price? A lot of negative news has broken in recent weeks and should now have been absorbed into the asset prices.  Here is a top line summary of the recent bad news: 1. At the end of last week Standard & Poor’s downgraded the credit ratings of nine Eurozone (EZ) countries, including stripping France and Austria of their AAA rating and taking Portugal down below investment grade. This leaves only four EZ countries with triple A ratings and, as a result, the European Financial Stability Fund (EFSF) was also subsequently deprived of its AAA rating. According to the German newspaper Die Welt, on the back of this, plans to leverage the (EFSF) to up to EUR1.5trn from EUR440bn “are practically dead.” 2. Negotiations between Greece and representatives of private sector creditors broke down at the end of last week, raising concern that there will be a ‘disorderly’ default rather than a managed debt swap in March when Greece is due to repay EUR14.5bn in bond redemptions. This will be impossible unless Greece gets the frozen 7th tranche of the support package from the so-called ‘troika’ (EC, IMF and ECB) which is itself conditional on closing the debt swap. Such a disorderly default would trigger credit default swap contracts, likely creating a new wave of uncertainty and potential contagion in an environment where it would be extremely difficult to compute the impact on individual banks and insurance companies given the integrated nature of financial markets and institutions. Although negotiations have subsequently resumed agreement has still to be reached and, moreover, investors have also come round to the realisation that even a successful conclusion of negotiations on the terms of a swap would still leave open the question of investor participation and the risk that private creditor ‘holdouts’ are subsequently forced into the deal removing any notion that this is a ‘voluntary’ rather than a coercive swap. 3. In the background, global economic growth expectations have been further downgraded recently and now recession in 2012 is the central forecast for the EZ. The World Bank is indicative of the trend: it now believes that the EZ entered recession in Q411 and sees a 0.3% contraction in the bloc’s GDP this year. It has also lowered its US GDP growth forecast to 2.2% in 2012 from 2.9% previously and expects world GDP growth to fall to 2.5% in 2012, down from a forecast for 3.6% growth six months ago. According to the Bank, emerging countries should take steps to plan for a global economic crisis in line with 2008/09 if the EZ Sovereign debt crisis intensifies. 4. Corporate earnings expectations have been downgraded but in spite of this the Q411 US earnings season that began last month has generally been disappointing. According to Bloomberg, in releases thus far fewer S&P 500 companies have beaten analyst earnings expectations than at any time over the last 4 years. 5. China has not been immune from the gloom. GDP growth has decelerated with Q4 growth slowing to 8.9%, the lowest growth rate for ten quarters, increasing concerns about a hard landing in the world’s second largest economy. Property prices in China have also been under downward pressure which continued into December when residential property prices fell more than at any point in the previous 12 months and new home sales fell month-on-month in 52 of 70 cities monitored, adding to concerns that this could have a debilitating effect on the domestic banking system.  But look through the gloom and focus on valuations Clearly, this is a substantial raft of bad news to hit the market in a relatively short period of time. But the limited reaction of markets to these events and data releases suggests that it was largely already factored into asset prices. In fact, global equity markets are up year-to-date and most risk assets and currencies have fared reasonably well so far this year in spite of the negative news flow. Additional evidence that investor expectations have been driven sharply down by negative news is provided by the so-called activity ‘surprise’ indices for the US and the EZ. In both cases the data across a broad range of indicators has generally been coming in better than expected recently, in large measure because expectations have been trashed to such an extent. This is in sharp contrast to the six month period to end September 2011 when the data for the US surprised negatively, a factor that was instrumental in the market selling off over that period. Things could always get worse than currently expected but the negative tone of recent news suggests that there is a lot of angst already factored into asset prices. In fact, the correlated 2011 sell-off in most risk assets has also created long-term value in a range of fundamentally attractive investments, given that it was based more on risk aversion than deterioration in underlying fundamentals. In bond markets there would be a preference for corporate over safe haven developed world government bonds. The latter look expensive on fundamentals while companies generally have strong balance sheets, are in many cases cash rich and offer an attractive spread over treasuries and other safe haven government bonds. For the most part, the corporate spread widening in 2011 is not credit specific but a reflection of an absence of risk appetite. Equity markets are also generally trading cheap to their longer-term valuation averages on a forward PE basis despite, in some cases, big downgrades in earnings forecasts. Not surprisingly, the EZ is the region where there has been the most aggressive downward revisions – by close to 80% on average since June. Most emerging markets earnings growth estimates have also been revised down. For example, earnings estimates for the Indian market have been cut by almost 50% since last June. Moreover, both developed and emerging markets equities look cheap relative to history. For many, emerging and developed markets look appealing and this may be an attractive entry point for exposure to powerful long-term investment themes like emerging consumption and infrastructure spending. So, if you are in it for the long-term, now could be the right time to get back into the market – although, in the right asset classes, of course. It might be an idea to take a look at an Absolute Return Fund – from the likes of Hendersons. 2012-01-30T12:24:29+00:00 http://www.blacktowerfm.co.uk/site/confident-about-the-future-of-guernseys-qrops-industry/ http://www.blacktowerfm.co.uk/site/confident-about-the-future-of-guernseys-qrops-industry/#When:12:23:41Z A number of people are assisting Guernsey's pensions industry to respond to the proposed changes from Her Majesty´s Revenue and Customs (HMRC) to Qualifying Recognised Overseas Pension Schemes (QROPS) and they are confident that Guernsey will continue to be an attractive jurisdiction for the establishment of QROPS. Since 2006 UK legislation permits non-UK pension schemes to attain the status of a QROPS which enables such schemes to accept pension transfers from UK registered pensions. QROPS offer the ability to UK pension savers now living, or planning to live, out their retirement outside the UK to transfer their pension funds out of the UK without suffering adverse UK tax consequences. Guernsey rapidly became the jurisdiction of choice for many QROPS schemes and is believed to account for approximately one third of all QROPS schemes. Although HMRC has raised no Guernsey-specific concerns, it is well known that concerns have arisen regarding alleged abusive practices in other jurisdictions; this appears to be what has motivated HMRC's proposed changes which will however apply to all QROPS jurisdictions. Among other changes, the proposed new regulations will impose greater reporting requirements on administrators of QROPS.HMRC intends to impose a new "Condition 4" which will require all jurisdictions, in which QROPS are administered, to grant the same exemption from tax in respect of benefits to all members of the QROPS schemes, irrespective of where the member is resident. Jurisdictions that do not comply with Condition 4 will no longer be accepted by HMRC for establishing QROPS.Guernsey resident members of QROPS are currently taxed in Guernsey on benefits received whereas non-Guernsey members are not. If the proposed changes take effect, Guernsey's existing schemes would no longer comply unless changes are made to the way Guernsey taxes benefits under Guernsey-based QROPS. The Guernsey Association of Pension Providers is in the process of formulating a detailed response to HMRC. Industry's principal concern centres on Condition 4 and its ramifications. A leading pensions’ expert in Guernsey has stated, “Condition 4 remains subject to consultation and may yet be revisited or even be withdrawn.“However, as we see it, if Condition 4 is imposed, Guernsey has two options. The first is to tax both Guernsey and non-Guernsey residents in the same way on their Guernsey source pensions’ income. Such a move may however cause non-Guernsey members to be taxed on their pension income both in Guernsey as well as in their home jurisdiction and would immediately place Guernsey at a competitive disadvantage when compared with other QROPS jurisdictions that may not impose such a tax.” “The second option would be for Guernsey’s existing system of taxation of personal income to provide that no Guernsey tax would be payable on pension distributions received irrespective of where the member resides. Such a pension arrangement would have to be open to Guernsey and non-Guernsey residents alike.” "The second option is clearly the more desirable provided it can be established in a way that would protect Guernsey's income tax base,”.“A lot of time and effort has been spent over the last weeks by various people in Guernsey pensions and tax sectors as to how best to achieve a positive outcome for Guernsey and the pension savers it serves.“It has been, and continues to be, a real team effort involving the co-operation of industry, professional advisers, public servants and politicians in a way that promises a positive outcome.They also added, “We are cautiously confident that Guernsey will be able to respond effectively, and within the limited time available, to meet the challenges presented by the proposed regulations and that we should be able not only to preserve but even enhance the island's standing as the leading international QROPS jurisdiction,". What is clear is that now, more than ever, it is imperative that you seek professional independent financial advice not just about whether to transfer pension benefits to QROPS, but also about which jurisdiction will be best for that pension in light of proposed changes. 2012-01-30T12:23:41+00:00 http://www.blacktowerfm.co.uk/site/the-spanish-tax-advantage-part-2/ http://www.blacktowerfm.co.uk/site/the-spanish-tax-advantage-part-2/#When:12:16:55Z  Tax efficient 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 as you may also be affected by exchange rate fluctuations. 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 and 2011, 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 However, it’s not for everyone and in certain circumstances a transfer could prove to be a disadvantage, such as certain defined benefit schemes. Also be aware that some companies and individuals claim that you can 100% commute your pension by transferring to such jurisdictions as New Zealand. Whilst this is possible you need to be aware of the possible implications of such transfers. For example some claim that this can be done “tax free”.  If by “tax free” they mean there are no taxes to pay in New Zealand, then they are correct. However the tax position in either the UK or Spain may differ considerably. Indeed the legislation that allowed this is set to change with reforms to the UK Financial Act planned for April 2012. These changes will put a stop to this practice which will in turn provide greater consumer protection. In short before embarking on an overseas pension transfer ensure that you are talking to a trusted and regulated company and that you are made “fully” aware of the implications should you return to the UK and as such your tax liabilities. To find out more please contact me on 0034 952 816 443  or 0034 622 345 558 or simply email me at david.rogers@blacktowerfm.com 2012-01-30T12:16:55+00:00 http://www.blacktowerfm.co.uk/site/the-spanish-tax-advantage-part-1/ http://www.blacktowerfm.co.uk/site/the-spanish-tax-advantage-part-1/#When:12:15:07Z Tax efficient investing There are a substantial number of Expats living in Spain that may not be aware of certain advantages open to them purely as a result of the fact that they live here. For example did you know that you can be protected from the European Savings Directives rules on Withholding Tax, which is a tax levied on growth from savings or investments? To avoid paying witholding tax you can take advantage of the favorable way in which Spain looks at collective investments. In this regard it is possible for a person who lives in Spain to open what are generally known as Spanish Compliant Bonds or Wrappers, these are extremely tax efficient vehicles for holding invested funds and cash. For example: If you held funds on deposit in the general banking system or you have funds invested in non-compliant products, under the European Savings Directive, any growth obtained is subject to withholding tax. The current rate of withholding tax is 19%. (This is tax law and is always charged on growth, although not readily explained by the banking system or many off-shore providers. What does that mean? Well as an example if you had €100,000 either on deposit or in certain non-compliant off-shore structures and you obtained growth of say 10%, giving you €110,000 then there would be a 19% tax charge applied to the (€10,000) growth element only. This would result in withholding tax charge of €1900. This applies no matter whether you touch the original amount or the growth element or not. In other words tax on the growth is unavoidable. Unless you take advantage of a Spanish Compliant Portfolio Bond/Wrapper, in which case, the tax treatment is far more favorable. In this case if the €100,000 had grown to €110,000 and the policy owner decided NOT to touch the investment at all, then there would be NO tax to pay. This is known as tax free role up, because the policy owner can now get growth on the tax that they would have paid if it had been in the banking system and/or in non-complaint off-shore structures. Furthermore, should the policy owner wish to drawdown from the policy a Spanish Compliant Portfolio Bond/Wrapper also provides an extremely favorable tax position for the policy holder. In this case for example, if the policy holder wished to take the whole growth (€10,000) then this would be treated as follows: Of the €10,000 withdrawn, €9,000 would be treated as Return of Capital, and be exempt from tax (zero tax to pay) and the remaining €1,000 would be taxed as investment income which is levied at 19% for the first €6000 and 21% thereafter. So in the case it is possible for the policy holder to get hold of €10,000 with all taxes paid for only €190 or 1.9% in tax. Or put another way he/she would have saved €1,710 in tax charges alone. There is not a more favorable (legal) way of dealing with invested funds and as such this should be, at least, considered as an option for anyone living in Spain or anyone that has funds invested in either the banking system or in non-complaint investment portfolios. In this regard many Expats living in Spain have been sold and/or invested in non-complaint “off-shore” products, so if you have funds invested in this manner its worth establishing of they are Spanish Compliant or not as you may be paying taxes that could be avoided. In part of the Spanish Tax Advantage we will cover tax efficient pension planning for expats. To find out more about the Spanish Tax Advantage, please contact me on 0034 952 816 443  or 0034 622 345 558 or simply email me at david.rogers@blacktowerfm.com 2012-01-30T12:15:07+00:00 http://www.blacktowerfm.co.uk/site/changes-to-personal-income-tax-in-spain/ http://www.blacktowerfm.co.uk/site/changes-to-personal-income-tax-in-spain/#When:15:11:46Z Do you hold an Investment Bond product issued by a non-eu jurisdiction like the Isle of Man, for example Friends Provident International or Scottish Widows International or still sit on investments arranged whilst resident in the UK? If the answer is yes you would be advised to make a cup of tea and get a plate of Digestives and continue reading. The previous PSOE Government, made a temporary amendment to the personal income tax law in Spain, before the recent General Elections, that could leave investors in non-tax-compliant offshore bonds facing a higher tax bill in 2014. Whilst many though that the newly elected PP Government would reverse this, this has not been the case. On 1 January, the Spanish personal income tax regime was temporarily modified resulting in a rise in income tax for 2012 and 2013. While the changes will have “little or no impact” on those who hold tax-compliant offshore bond policies until at least 2014, normally issued out of jurisdictions like Dublin, those using non-compliant tax-compliant products will pay up to 3% more each year in tax both this year and next. So what does this mean? Well Skandia have said that from the 1 January this year to the end of 2013, gains on tax-compliant offshore bonds will be taxed at a rate of 21% (as opposed to the normal rate of 19%) which is then withheld by tax-compliant providers. There will be no further personal income tax liability for the policyholder if the gains amount to less than €6,000 (£4,981, $7,661) savings income in a tax year – including interest earned on savings accounts and dividends received in the same tax year. A further 4% personal income tax liability will need to be accounted for by the policyholder on the next €18,000 savings income and a further 6% if the overall savings income for that tax year is above €24,000.  If the policy suffers a loss over the tax period, the loss can be offset against other income tax liabilities. In contrast, non-tax-compliant policies are required to withhold tax every year and so will be further affected by the increase during the next two years. Skandia also went on to advise that, in instances where the provider of a non-compliant policy fails to withhold tax correctly, and in a timely manner, policyholders may become subject to penalties for non-reporting, and these can range from 50% to 150%. However, Skandia conceded that non tax-compliant policies have their merits as such policies can offer other features which can make them attractive to certain types of investors – for example, by providing access to a wider investment universe of assets and the ability offset losses on an annual basis. What is clear is that in today’s world, the choices available to investors can be overwhelming. It is crucial investors understand the implications of choosing the right product in order to utilise the available tax advantages to the full. For example, tax-compliant bonds reduce the burden of reporting on individuals classed as tax-resident in Spain and can be affected by changes in tax regimes to a lesser degree than non tax-complaint alternatives. The recent changes introduced on 1st January 2012 illustrate these advantages perfectly. But please don’t make a ‘hasty’ decision without first reviewing what you have and the tax implications with a qualified financial adviser. 2012-01-19T15:11:46+00:00