Savings and tax solutions in Spain

john.hayward@spectrum-ifa.com or call me on (+34) 96 558 7633

 

Stockmarket falls and low interest rates

Have you seen your investments struggle over the last few months? This could be the case if you have been invested in the stockmarket. Most people know that investments can go down as well Investment riskas up. Over time, stocks and shares can make significant gains. However, it still hurts when one sees a loss of this amount in such a short period. Some people prefer to keep their money in cash but then we have another risk. Interest rates are low and look as though they will stay that way for a while to come. They could also remain low relative to inflation. What many people want, and probably need, is a steady increase in the value of their savings with as little risk as possible. So what is the solution?

The low risk solution

We at The Spectrum IFA Group have access to an insurance bond offered by arguably the largest insurance company in the UK and one of the largest in Europe. Their investment model has allowed consistent returns of over 4.5% a year (after deducting charges) whilst exposing the investor to a fraction of the risk of a stockmarket such as the FTSE100. Whilst the FTSE100 has fallen by 7.5%* over the last year, this low risk approach has produced a gain of 5.4%* before charges of between 1.2% and 2.4%.

Offshore Investment Bond

Tax friendly in Spain and the UK

No tax is payable on the pure growth of the insurance bond. Even if withdrawals are made, the tax treatment is vastly more favourable when compared to bank accounts or other non-compliant arrangements (see an example of how tax is calculated here). If you are currently Spanish resident, but you subsequently move back to the UK, the bond can follow you and benefit from the advantageous tax treatment awarded to these policies in the UK.

Outside Spanish Succession tax (Inheritance Tax)

With IHT in Spain extremely punitive for those who do not qualify for local tax reductions, this is a huge benefit. It can be written in joint names so as to help to avoid Spanish IHT on the resident owner.

No Modelo 720 declaration

As this bond is Spanish compliant, there is no obligation to declare it as an overseas asset on the Form 720. This is because the insurance company declares it to Spain each year.

To find out more about how we can help you arrange your savings in a more beneficial way, contact me at

john.hayward@spectrum-ifa.com or call me on (+34) 96 558 7633

With care, you prosper

 * 12 months to 30/03/16

“The Spectrum IFA Group” is a registered trademark, exclusive rights to use in Spain granted to Baskerville Advisers S.L. CIF B-63/137.020 Correduría de Seguros; No de registro RDGS J2306; Paseo de Gracia 63, principal, 2a,08008, Barcelona. Seguro responsabilidad civil AIG Europe No 0131900503.1330 Registro Mercantil de Barcelona, Tomo 35489, Folio 170, Seccion 8, Hoja B-269534