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Expat Investor : December 2007
NEWS expatinvestor.com 2 EXPAT INVESTOR December 2007 Fraud drives up card fraud losses Fast Facts 10113 BANCO Halifax Hispania has opened a new branch in Costa Adeje, one of Tenerife's liveliest resorts. The Bank's team of English and Spanish speaking staff based in Costa Adeje will provide British expats with help and guidance on all aspects of buying a second home in Banco Halifax Hispania opens in Tenerife UK's pre-budget report -- how will it affect you? THE NEW Chancellor, Alistair Darling, delivered his first Pre- Budget Report on 9 October creating much furore and debate in the media. Many of the key areas raised by Mr Darling echoed the policies mentioned by the Conservatives during their recent party conference, including proposals regarding inheritance tax and the taxation of those not domiciled in the UK. The main announcement affecting expatriates is the conclusion of the Residence and Domicile review, announced in 2002. The changes are likely to have a major impact on expatriates. From April 2008, any expats making frequent trips back to the UK will have to carefully plan ahead to ensure their non-resident status is not jeopardised. The Government has confirmed it will introduce changes to the residence rules so that days of arrival in and departure from the UK will count toward establishing residence. The upshot will be that if you regularly travel back to the UK you will need to keep a watchful eye on the number of days spent in Britain. Some professions, such as airline pilots, may be particularly affected by these new rules. We are anticipating further details will be published soon; the Government has mentioned that the rules are being changed to bring Britain in line with 'international standards' for residence, so it remains to be seen whether any changes to the well-known 91 day average rule will apply. Another important announcement was the proposed clampdown on 'non-doms' which has been on the cards for some time. The report suggests that non-doms who have been in the UK for more than seven years, and who wish to keep their offshore income out of the UK tax net, will be faced with an annual tax payment in the region of £30,000 to keep their entitlement to the remittance basis. Alternatively, the other option is being taxed on worldwide income, assets and gains by as much as 40%. A consultation exercise has been announced and conclusions will be drawn in due course. Depending on the outcomes of the consultation, we could see wealthy individuals either having to pay much more to the Revenue or leave the UK to achieve a better financial position elsewhere. These new policies regarding residence rules and domicile show again that the Government is keen to clamp down on individuals trying to 'get the best of both worlds'. We would advise expatriates, anyone looking to move or work abroad or non-domiciles, to seek specialist advice to ensure they are not exposed to unnecessary tax demands over the coming years. THE introduction of chip and PIN has made it more difficult for fraudsters to commit card fraud in the UK. As a result, criminals are concentrating on committing card fraud overseas on UK-issued cards. Research from APACS, the UK payments association, shows that total card fraud losses increased by 26% in the six months to June 2007 compared with the first half of 2006. This increase has been driven by a 126% rise in fraud on UK- issued cards being used overseas. In contrast, domestic card fraud continues to fall, thanks to chip and PIN, with losses at UK retailers down 11% and losses at UK cash machines down 57%. Fraudsters copy the magnetic stripe data on the cards to create fake cards that they use in countries that have yet to upgrade to chip and PIN. However, as more countries rollout this secure technology, the Spain. Banco Halifax Hispania currently has 24 branches throughout Spain, on both the mainland and its islands. The Bank also reports opening its first branch in Ibiza towards the end of the year. Ian Smith, Head of European International real estate agency, Premier Resorts, comments on the cut in capital gains tax (CGT) IN HIS Pre-Budget Report, Chancellor Alistair Darling announced that capital gains tax (CGT) for people selling a second home will become a fixed rather than a tapering rate and will be set at just 18%, which has been dramatically cut from the current 40%. Dominic Hassell, Sales Director of Premier Resorts, says, "This tax reduction is likely to make the pure investment sector more dynamic. Property investors and second home owners will be in a winning position as they will no longer need to hold on to their asset for many years to offset their heavy tax duty, which will further fuel the overseas property market. "The current London real estate market is experiencing high values and lower rental returns on investment, whereas the overseas market in contrast is seeing lower mortgage interest rates coupled with guaranteed rental periods. Therefore, overseas property rental portfolios will further benefit from the dramatic cut." CGT slashed to 18% THE IMA, the trade body for the UK's £3,100bn asset management industry, supports the Government's proposed reforms to capital gains tax (CGT) and calls for their implementation in next year's Budget. Richard Saunders, IMA Chief Executive, tells Expat Investor,"These reforms are good news for smaller savers. "The present CGT rules, with different rates according to your marginal income tax rate, and how long you have held assets, are hopelessly confusing for ordinary investors. "With a single rate at a modest 18%, and an annual exemption of £9,200, people will know where they stand." Most savers, too, will be better off, confirms Mr Saunders. "The great majority of investors in funds will face a lower tax rate on their capital gains, and the minority who do not, will have the option of minimising their liability by judicious use of the annual exempt amount. And, of course, those who make sure they put the first £7,200 of savings each year into an ISA will face no CGT at all on that money." Steve Travis, International Manager with The Fry Group, briefs expats on the financial implications of the UK's pre-Budget report. The Fry Group 10110 Premier Resorts 10111 IMA 10112 For more information just enter the above numbers on the Reader Reply Ser vice coupon on page 20 or visit www.expatinvestor.com FAST FACTS opportunities for criminals to use fake magnetic stripe cards overseas will decrease. To help achieve this end, the European banking industry has set itself the target of completing its chip card rollout by 2010. Online banking fraud losses fell by 67% from £22.4m in the first six months of 2006 to just £7.5m in the same period this year. This decrease occurred because online banks have successfully implemented a range of measures to detect and prevent fraud, coupled with the fact that there was an unusually high level of online banking fraud in the first few months of 2006. Sandra Quinn, director of communications, says, "These figures show how the fraudsters have changed tack. A couple of years ago they were mainly stealing cards and card details for use in UK shops and cash machines, but today, because of chip and PIN, they have been driven overseas -- using fake magnetic strip cards specifically in countries which have yet to upgrade to chip and PIN. During the interim we will continue to use fraud intelligence systems to tackle overseas losses and encourage those countries that are lagging behind on chip and PIN to follow our lead." To further raise awareness around card security APACS has published a consumer advice guide -- Protect your PIN -- to remind cardholders of the need to keep their PIN and card details safe and secure at all times. Educating consumers about the importance of keeping PINs safe and secure can play an important part in tackling fraud. This, together with a range of fraud prevention material and information for consumers and retailers alike, can be found at the banking industry's fraud prevention website www.cardwatch.org.uk/. Operations, tells Expat Investor,"The new branch in Costa Adeje will enable Banco Halifax Hispania to be more accessible to its customers in the area. We will continue to target the Spanish Islands to complement our successful mainland business." Banco Halifax Hispania offers variable and fixed rate mortgages in euros, secured on the Spanish property. Loans are available for up to a maximum of 70% of the valuation of the property. The Bank, established in 1993, offers a full telephone banking service. It has branches in Madrid, Barcelona, Málaga, Sevilla, Marbella, Fuengirola, Benalmádena, To r revieja, Denia, Torrox, Los Alcázares, Calpe, Playa Flamenca, Mallorca, Guardamar, Sotogrande, Guadalmina, Mazarrón, Puerto Pollenca, Calahonda, Menorca, Fuerteventura and Tenerife.
January February 2008