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Expat Investor : November 2007
November 2007 EXPAT INVESTOR 13 EXPAT ISSUES Know before you go Fast Facts 99400 Fast Facts 99401 Heading abroad to work can involve a lot of upheaval for you and your family, but you can make the transition relatively painless by sorting out as many of your are likely, eventually, to move back to the UK or to another country, a local firm may not be able to offer the best advice for your future lifestyle or UK tax position. Think about whether you would like a financial adviser who should be able to offer comprehensive advice or whether you'd prefer to buy investment products you've researched yourself, which is known as an execution only service. Detailed advice starts with the adviser taking a thorough look at your overall finances. It is useful for people with complicated financial affairs, those who are likely to live and work in more than one country or people who don't have the time to research and make investment decisions. The adviser will give you details of their services in a 'Key Facts' document which explains whether they're offering you advice or just information, and whose investment products they offer. They will also tell you about the costs involved and how you will pay for the firm's service, either through commission or a fee. The next step is a 'fact find' which is a financial questionnaire to establish your financial goals, current situation and attitude to risk. You will receive written recommendations included in a 'Reasons Why' letter, explaining how the products fit your financial circumstances, plus an annual review of your investments. Despite recent reports of a potential Spanish property market crash and figures marking an overall slow down in some areas of the country particularly the Costas, the HiFX Monthly Global Property Hotspots Report shows that Spain still remains the top destination for Brits buying overseas property with 27% of all enquiries relating to Brits buying in Spain. In light of these market conditions, currency experts HiFX, are urging Brits considering purchasing Spanish property, or those who already own a property in the country, to be aware of how the Spanish market is changing and how this can best be used to their advantage. Spain still number one destination for Brits abroad According to HiFX, while some areas of the Spanish Costas are certainly cooling and seeing market corrections due to over supply, less traditional inland regions are becoming more popular with savvy buyers. Mark Bodega, tells Expat Investor,"Fo r ced to be more realistic about the prospects in the Spanish real estate market, holiday home buyers and investors alike, will have to look for value rather than creating it artificially. Cut through the current hype and think carefully about the property you are buying in order to make the most of the current market conditions. Only certain areas are suffering a slump due to over supply, whilst others still have much to offer." Holiday homer? "For holiday homers, the oversupply in some Spanish markets can lead to real bargains as property investors look to extract themselves. If you are buying a holiday home in Spain, don't be put off by the recent reports of a potential crash. All markets go through corrections and as long as you are considering your holiday home as a long-term investment (5-10 years) you can still buy with confidence, if you buy wisely. "An abundance of low cost airline routes, a two hour flight time and the great weather means that Spain will always be a favourite with British buyers. Even for those looking for capital growth in the short term there are plenty of opportunities to be had in the lesser known Costas, in the cities and inland. "Coastal regions like Tarragona, and inland areas like Jaen and Cordoba still provide excellent value as do some cities. "In Barcelona, for example, property prices are rising at their fastest pace ever." Selling up? Mr Bodega continues, "While owners of property in the saturated Spanish markets could be well advised to hold tight for a year or two, if possible and let the market come through this cycle. For those who must sell now, HiFX is advising owners to avoid just automatically turning to their bank to transfer their assets home. "Shop around and consider using a currency broker. Not only will you save money on the exchange rate ensuring you receive the maximum amount possible from the sale of your property, you'll also avoid the many costly banks fees often charged when you bring your money back to the UK." financial affairs in advance as you can. Such is the advice offered to first time expats by Bank of Scotland International. Before you go There will be some UK savings accounts you will not want to close, so ensure you arrange for these to be set up to receive interest gross, and, if you have a mortgage here, remember to notify your lender that you will be out of the country. In terms of banking it is simpler to set up an offshore bank account while you are in the UK, as it is much easier to get copies of passports and recent utility bills while you are still resident here. All banks now require this 'know your customer' detail, so it is wise to get it done as soon as possible. Set up an offshore bank account to help you manage your money and check whether it has a comprehensive internet banking facility -- you may need to be operating across time zones and when UK call centres and offices are closed. A good account will also pay a reasonable rate of interest and have a team of skilled staff who are trained to understand the needs of expatriates. Remember to check out the tax laws in the country you are moving to and notify the Inland Revenue in the UK of your date of departure. When you arrive As soon as you arrive in your new country, register with your consulate and with the local tax authorities. You may need a financial adviser; a UK bank with expertise in this area could be the best option. Be aware that in some countries local advisers are neither independent nor regulated to UK standards, so will not declare hidden fees and costs. Since you