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Expat Investor : September 2007
September 2007 EXPAT INVESTOR 13 VISIT www.expatinvestor.com Request more information Read updated news Links to advertisers Fast Facts -- WHEREVER YOU ARE IN THE WORLD EXPAT ISSUES Over one million Brits are currently receiving their pension abroad, and this is expected to more than triple to 3.3 million by 2050. Bank of Scotland International confirms that, at present, three-quarters (75,000) of those drawing their state pension abroad have relocated to sunny Spain. With this trend looking set to continue, the Bank examines the practicalities of drawing a UK pension in Spain. Spain continues to Check your pension before taking the silver flight to Spain Fast Facts 77651 Fast Facts 66651 be the most popular destination for Brits buying property overseas, and it currently hosts 27% of all British second homes abroad. However,when retiring to the country's sandy beaches, there are a number of factors to consider, the most prominent of which should be ensuring that your finances are in order. British expatriates are entitled to receive both state and personal pensions when moving to Spain, and state pensions drawn in Spain will continue to rise in line with inflation. However, you are only permitted to collect a state pension abroad if you have paid the requisite National Insurance contributions over the years. It is also important to remember that any retirement benefits you are entitled to in the UK may be affected by your move to Spain. For those planning to live abroad for less than two years, another option is to arrange for your pension to accumulate, providing you with a lump sum upon your return to the UK. Bank of Scotland International recommends that anyone planning to retire to Spain takes the following issues into consideration: Pension payments -- set up an account which allows you to receive your pension whilst also facilitating international banking. Additional pension benefits -- any pension benefits that you receive in the UK may be affected by your move to Spain. For example, you will no longer continue to receive pension credits if you are living in Spain, although you may be able to continue to claim certain other benefits. Please refer to the Department For Wo rk and Pensions' (DWP) GL29 guide: Going Abroad and Social Security Benefits for additional information. Contact the relevant gover nment departments -- it is essential to contact your Social Security Office, the DWP and the National Insurance contributions office so that they know you are moving to Spain and you continue to receive your pension. Look into your tax status -- you need to understand your tax status and to work out how much tax you will pay on any income received over and above your UK personal allowance. The IR20 guide from HM Customs and Revenue is a good source of information regarding this. Understand your tax liability -- people taking early retirement and moving to Spain before they are eligible to draw their pension will need to pay particular attention to the 25% tax-free rule. Currently, only those people resident in the UK are able to take 25% of their pension lump sum tax free. If you are liable for tax in Spain before you start drawing your pension, you may find that this 25% is taxable as well. Evaluate the currency risk -- you should consider the currency risk of living in Spain and spending euros whilst drawing a pension in sterling. To ny Wilcox, Managing Director of Bank of Scotland International, advises, "For many people, moving abroad is a very exciting time, but it is important to have adequate financial planning in place. Ensuring that you have made arrangements regarding your pension before leaving the UK can avoid a considerable amount of hassle at a later date." Bank of Scotland Inter national provides a free, impartial retirement planning service through independent financial advisers. Readers can find out more through the fast facts number below. a prominent collector across a wide variety of the arts. Bonhams will host its first auction in Dubai in November this year. The sale will include Islamic works of art, contemporary Indian, Arab and Iranian art, as well as fine jewellery and watches. Matthew Girling, Bonhams European Chairman, who is spearheading this new venture, says: "Part of the new reality of the global art market has been the Bonhams opens Dubai office Bonhams, the international fine art auction house, is opening a sales office in Dubai, with a first auction sale scheduled for early November 2007. Bonhams Dubai will be a joint venture with the Al Tajir family. His Excellency Mohammed Mahdi Al Tajir was the former United Arab Emirates Ambassador to Great Britain and Western Europe and is currently an advisor to the President of the United Arab Emirates. He is dramatic emergence in the last decade of new buyers for contemporary Arab, Iranian and Indian art. Until recently these buyers have been mostly drawn to more traditional national art. However, the new generation of collectors, dealers and artists are increasingly influenced by broader trends from both the traditional and contemporary art world."
July August 2007