Posts Tagged ‘Map of Spain’
What’s on in the Murcia region?
If you live in Spain or are coming to Spain you may find this site of great use, it gives lots of information on a weekly news letter and tells you what is on and where in the Murcia region. You can subscribe to the weekly newsletter, it is FREE and gives much more information about places of interest, museums, ferias, fiestas, shows, concerts, entertainment and where to eat and drink . You can advertise or list goods for sale.There is something new to be learnt every week. Great ideas to get the best out the region.
Go to:- http://www.simplynetworking.es/index.php
Admin: 03 September 2010
Data Disappointments For Sterling
Wider UK trade deficit and falling factory gate prices dampen appetite for the pound. Stability returns to the euro as the Greek panic subsides.
Sterling spent a second week paying the bill for its post-budget honeymoon. It has now returned all the way to its position before the chancellor stood up to deliver his speech on 22 June. There was nothing dramatic about the decline and no sense of the panic that would have been typical six months or more ago. To some extent the fall was a completion of the technical head-and-shoulders formation that peaked a fortnight ago.
The UK economic data were mixed. Monday’s services sector purchasing managers’ index (PMI) fell by one point to a less-than expected 54.4. It suggested that companies were still growing their activity but at a progressively slower pace. Wednesday’s production figures were good in parts. Although manufacturing production grew by only 0.3% in May instead of the +0.5% analysts had predicted, it was a far better result than April’s -0.8% decline. The broader industrial production figure, which includes such things as mining and energy, reversed the previous month’s decline with a +0.7% rise. The Halifax house price index went down for a second month, this time by -0.6%, leaving house prices 6.3% higher than a year earlier.
The most disappointing data, at least as far as sterling was concerned, came on Friday with June’s producer price index (PPI) and the balance of trade for May. The input and output components of the PPI, representing manufacturers’ costs and factory gate prices, were lower in June by -0.2% and -0.3% respectively. The numbers supported the Bank of England’s projection that inflation will fall back towards its 2% target without the need for higher interest rates. The UK trade figures were also unhelpful. The deficit in goods widened to more than £8 billion while goods and services together registered a £4.5 billion shortfall. Both deficits were bigger than expected and cast renewed doubt on the alleged benefits of a weak pound.
Other events during the week saw an announcement from the new Office for Budgetary Responsibility (OBR) that its boss, Alan Budd, did not intend to renew his initial three month contract and that the two other members of the triumvirate would also be leaving before the end of the year. Critics of the new setup wondered why he was leaving. Could it be because of lack of independence? Perhaps not, for the International Monetary Fund (IMF) came out later in the week with economic growth projections remarkably similar to those put together by the OBR. The IMF agrees with the OBR that Britain’s gross domestic product will grow by 1.2%. Its forecast of 2.1% growth in 2011 is lower than the OBR’s 2.3% prediction.
After months of punishment as a result of the problems in Greece the euro has made a good fist of regaining some semblance of stability. There has been a correction to what commentators retrospectively describe as an ‘oversold’ condition, in much the same way that sterling recovered from its near-parity lows a year and a half ago.
The euro zone’s services PMI came in better than its British or US equivalents at 55.5, minutely higher than the previous month. Retail sales also performed better than forecast in June, rising by +0.3% instead of falling by that amount as analysts had predicted. Finalised figures for economic expansion in the first quarter of the year showed a +0.2% growth in gross domestic product (GDP), probably a tad short of the +0.3% growth that is expected to have demonstrated. Germany performed better than Britain on the industrial production front, with growth of +2.6% in May, while it demonstrated slower inflation at +0.8% in the year to June. If the Bank of England is under no pressure to raise interest rates in the War on Inflation, the European Central Bank (ECB) seems to be under no greater pressure.
Indeed, the ECB sided with the Bank of England in leaving its policy interest rate unchanged at Thursday’s meeting. President Jean-Claude Trichet expressed guarded optimism at the pace of economic growth but found no difficulty in containing his enthusiasm. Of more interest to investors was that he did not say about the ’stress tests’ that Euroland banks have recently undergone. The purpose of the tests is to examine how those banks would survive another serious economic or financial shock. Investors are uneasy that the ’stresses’ to which the banks’ balance sheets are subjected might not in fact be real life worst-case situations. The results of the tests will come out in a couple of weeks’ time and are eagerly awaited.
That sterling spent the whole week on the slide does not bode well for it in the immediate future. With UK statistics for Gross domestic product, inflation, consumer confidence, employment and earnings all due this week there is scope for further setbacks if the numbers are not supportive.
Buyers of the euro should hedge half their requirement until sterling’s future course becomes clearer.
Credit:- Moneycorp 13 July 2010
Reduce Spanish and UK Inheritance Tax with A QNUPS
British expatriates living in Spain want to feel confident that their wealth will last them for the rest of their retirement and keep them in a comfortable lifestyle. Paying less tax is one way to protect your assets and legitimate tax planning methods can help with this. The latest arrangement available to British expatriates is QNUPS (Qualifying Non-UK Pension Schemes) which can reduce taxation in Spain –as well as UK inheritance tax (IHT).
Spanish tax savings which can be made with a QNUPS are:
- QNUPS can avoid succession tax in Spain as well as succession law.
- There is no Spanish tax on the transfer into a QNUPS.
- Funds within the scheme will grow free of Spanish income tax.
- If you make a withdrawal in the form of an annuity from the fund itself (as is usually the case), very favourable Spanish tax provisions may apply.
- There is no need to buy an annuity from an insurance company.
- You can withdraw up to 25% as a lump sum from a QNUPS. If a lump sum is taken Spanish tax is due, but is calculated only on the difference between the capital received and the contributions you made. The tax rate is 19% (on the first €6,000 of total savings income, including that from other sources) and 21% on the excess.
- The balance of your investment can pass onto your heirs on your death.
- A QNUPS can avoid wealth tax if a rate is reintroduced in the future.
No UK IHT with a QNUPS
If you are a British expatriate, you may be liable to UK IHT on your worldwide assets, even if you are Spanish tax resident. This is because liability to IHT is based on domicile and not residency.
Shaking off your domicile is not easy to do and usually takes at least three years and involves pruning your ties with the UK to the bare minimum. For example, you would need to sell your UK property or at least not have it available for use; close surplus bank accounts, credit and debit cards and other investments; sell your vehicles and cut down social and business connections in the UK. You need to be able to provide evidence that you do not intend to return to the UK, and establishing a permanent home in Spain and making a Spanish Will will help. Even if you do lose your UK domicile status, you would regain it as soon as you move back to the UK to live.
Many Britons who relocate to Spain do so without a thought of moving back to the UK. But the fact is that as the years go by many do for a variety of reasons, such as on the death of a spouse or partner or to be closer to grandchildren as they grow up. Returning to the UK means returning to a UK liability to IHT, currently at 40% above the nil-rate threshold of £325,000 per person or £650,000 for spouses and civil partners.
Investing in a QNUPS takes away the worry over whether or not you are still UK domiciled and liable to IHT, or whether you may later return to the UK. Assets in a QNUPS are immediately exempt for IHT – even if you are UK domiciled.
Other advantages of a QNUPS
- Investable wealth can be placed in a QNUPS. You cannot invest a UK pension plan directly into a QNUPS, although it is possible after you have been non-UK resident for five complete, consecutive UK tax years, as long as you go via the QROPS route first.
- There is no maximum age at which you can invest in a QNUPS.
- There is no maximum contribution.
- You do not need to have any earned income from an employment.
- Income and a lump sum can be taken from age 55, or can be deferred until the age of 75 (although if you take income earlier, the lump sum needs to be taken then).
- Assets can be invested and benefits taken in any currency of your choice, giving you the opportunity to remove currency risk.
- Income which is taken is drawn down from the fund, leaving your scheme assets invested and rolling-up free from tax.
A QNUPS provides an opportunity for flexible investing and choice. It doesn’t matter how old you are or how long you have been retired, investing in a QNUPS will give immediate tax benefits, especially for Spanish succession tax and UK IHT. Within QNUPS the funds will remain fully invested and will be subject to investment risk, in line with your investment objectives.
Blevins Franks is an established international wealth and tax management firm with full knowledge of the rules of taxation in both Spain and the UK. Contact an adviser such as Blevins Franks to learn how QNUPS can help you.
Note that the tax treatment(s) detailed above are current at the time of writing; these are based on our understanding of current UK and Spanish legislation and taxation practice, and may change in the future.
By David Franks, Chief Executive, Blevins Franks
Bank Debt Back In the Spotlight
The scenes of long queues of people outside Northern Rock have faded somewhat from memory. While not completely forgotten, they seem a long time ago now – it was in September 2007 after all. The following autumn then saw the collapse of Lehman Brothers and less than a month later Icelandic banks Kaupthing and Landsbanki stopped trading, a move which impacted on the many expatriates who had savings in their offshore branches.
We then lived in suspense for a while, wondering if any other similar banks could fail. Savers spread their money out over different banks to increase protection from depositor guarantee schemes, or moved money out of banks and into arrangements which provide protection from institutional failure.
As the credit crisis slowly lifted, fears about bank failures abated. The issue of bank debt, however, is now back squarely in the spotlight again thanks to the financial crisis in Greece and fears over contagion to Eurozone countries like Spain, Portugal, Italy and Ireland.
It is impossible to escape news about the crisis facing Europe and its currency at the moment. Everyday seems to turn up something new. One article which really stood out for me, though, was one published in the New York Times on 1st May 2010 entitled “Europe’s Web of Debt”. Using data supplied by the Bank for International Settlements, it highlighted the extent to which the “vulnerable” countries on the periphery of the Eurozone have become interwoven, all both owing money and being owed money to/from the others – and this is besides the vast sums owed to countries like Germany, France and the UK.
This creates the risk of a domino effect if one country defaults. For example, if Greece defaults on its debts to Portugal, how would the already struggling Portugal cope? Would the losses impact on its ability to repay its debts to Spain, one of the weakest economies in Europe?
For example, here are the figures relating to Spain -
Spain is owed:
By Portugal – $86bn
By Italy – $47bn
By Ireland – $16bn
By Greece – $1.3bn
Spain owes:
To Portugal – $28bn
To Italy – $31bn
To Ireland – $30bn
To Greece – $0.4bn
Spain also owes:
To Germany – $238bn
To France – $220bn
To the UK – $114bn
Portugal, Italy, Ireland and Greece are in a similar situation. Total debt is as follows -
Spain – $1.1 trillion
Italy – $1.4 trillion
Ireland – $867 billion
Portugal – $286 billion
Greece – $236 billion
As of 19th May 2010, in an unexpected move, Germany’s financial regulator BaFin prohibited short trading on banks, insurers and Eurozone bonds and banned credit default swaps (CDS) on sovereign bonds until 31st March 2011. It said that the “extraordinary volatility” of debt securities from Eurozone countries justified its action, as did the fact that CDS movements “could jeopardise the stability of the financial system as a whole.”
The move has echoes of autumn 2008 when, following the collapse of Lehman Brothers, the UK and US temporarily banned shorting bank shares to prevent speculators causing another major bank to collapse. It has led some commentators to wonder about the health of the German banking system. Last May BaFin had warned that the toxic debt held by Germany’s banks could blow up “like a grenade” when hidden losses from the credit crisis came to light, and feared write offs could exceed €800 billion. German lenders are now facing a second set of losses on so called “Club Med” holdings.
Tim Congdon from the International Monetary Research observed that in the second week of May, ECB data showed that there was a “major run” on Club Med banks, with €56 billion of interbank lending moving from periphery Eurozone countries to core ones.
The BaFin ban on short trading then triggered a capital flight from Germany to Switzerland. If money continues to move out of the core, affecting countries like the UK and France as well as Germany, Europe may soon find itself with depleted depository capital.
On 31st May, the European Central Bank warned that Eurozone banks face up to €195bn in a “second wave” of potential loan losses over the next 18 months.
We would be wise not to be complacent about how secure our savings are in the bank. While it is unlikely that a country like the UK or Germany would allow a major bank to fail, there is a level of risk with smaller banks and those in the weaker southern European countries. They do have depositor compensation schemes in place, but it would remain to be seen how long it would take for them to repay depositors if a bank failed.
One lesson we learned from 2008 was that every investor should ask their adviser, bank or life assurance company to prove exactly how they are protected, and to what extent, in the event of institutional failure. You can then understand the risks and decide accordingly.
Within Europe the level of investor protection from institutional failure varies significantly between each country and between the type of institution – e.g. bank, insurance company etc. The difference can be significant; protection can be as low as nil. Luxembourg, on the other hand, offers one of the best investor protection regimes – its state controlled protection law is designed to provide maximum security to investors without limit. If you have an investment bond issued by a Luxembourg regulated insurance company, your investment assets are completely protected from the failing of the insurance company.
In all cases you should seek professional advice from an authorised advisory firm such as Blevins Franks Financial Management Ltd.
Blevins Franks Financial Management Ltd is authorised and regulated by the UK Financial Services Authority for the conduct of investment and pension business.
By Bill Blevins, Managing Director, Blevins Franks
Britons missing out on £101M each year on international money transfers
Poor bank rates and high charges for foreign exchange transactions mean individuals need to be savvier when transferring money overseas. Research by Moneycorp reveals that Brits are potentially losing over £101m a year by not shopping around for the best deals when transferring money abroad. Furthermore, uncompetitive exchange rates and high bank charges are costing individuals a lot of money, despite a concerted effort by most to reduce their outgoings on luxury and even staple items.
David Kerns, Head of Personal Clients at Moneycorp, comments:
“While many individuals are visiting comparison websites more frequently, checking voucher code sites and consulting online consumer forums before purchasing goods in order to save money, this mindset doesn’t seem to have extended to foreign exchange. As a result, individuals are missing out on a very large sum of money they could be saving, by transferring funds overseas through a foreign exchange specialist rather than a bank. Not surprisingly, high street banks are cashing in as a result of this surprisingly apathetic approach.”
People buying or selling property overseas and people emigrating or repatriating will be particularly affected, though this issue will affect all Brits who are transferring money overseas.
People who own additional properties abroad and make regular mortgage and/or utilities payments will also be badly affected, as every transfer is open to individual transfer charges, in addition to exchange rates.
Data from the UK’s number one property website, Rightmove Overseas, reveals that the average house price in the Costa del Sol in Spain is currently €369,860.68. With a deposit of 10% (€36,986), using a high street bank rather than Moneycorp would cost an individual, on average, an extra £558 on their deposit alone.
An individual who wants to transfer a lump sum of £100,000 to an account in Europe would lose out on an average of €1,690 by using their bank for the transfer into euros.
David Kerns concludes: “Despite the UK coming out of recession recently, individuals shouldn’t be lining the pockets of their bank managers and it’s in their best interest to maximise their investments. Prior to making any overseas payments, we always advocate that people shop around to get the best rates possible.”
Credit: Moneycorp – commercial foreign exchange – www.moneycorp.com
Note:- Follow our link for more information: -
http://www.moneycorp.com/affiliates/microsite/index.cfm?agentid=10082123
Government cuts Notary fees, making it fractionally cheaper to buy a home in Spain.
The government has announced a 5% reduction in notary and registry fees on property deeds as part of a package of measures to reduce the deficit and stimulate the economy.
Notaries and Registrars are screaming blue murder at this attack on their earnings; whilst house buyers will hardly notice the difference the savings are so small.
How big a saving will that 5% reduction in notary and registry fees give the average home buyer in Spain? It will be between €35 for a property costing €150,000 and €45 for a home costing €300,000, according to calculations done by Idealista.es, a Spanish property portal. Almost insignificant then.
Notaries and registrars are furious. The latter’s’ fees are already down by 50% thanks to the slump in property transactions.
Credit: Mark Stucklin
www.spanishpropertyinsight.com
Note: From a buyers point of view they are unsympathetic but in order to assist in the clearance of the back log of property, the consensus is why increase property tax from 7% to 8% on 1st July, when in fact it would be better to scrap it and look elsewhere for savings!
Property Market
Mortgage floor: 29% of mortgages have a minimum interest rate.
29% of mortgages taken out by Spanish families to finance the purchase of their home are subject to a mortgage “floor”, which means that when interest rates fall to a certain level, usually to below 3.1%, they do not benefit, according to a study drawn up by the Banco de España at the request of the Senate.
The Banco de España recognises that financial institutions use theses clauses to recover “the minimum costs generated by these products when interest rates change sharply”, and therefore it believes that “they are a factor which promotes financial stability, something which is in the public interest”. For this reason it affirms that “as long as the clauses are written in a clear, understandable way, they must be considered to be freely agreed upon by the parties” and “it would not be appropriate to classify them as unfair.”
The study found that 13 of the 49 banks which took part in the study systematically include this type of clause in their mortgages. Of these, 4 do not include a mortgage “ceiling” to protect clients against interest rate increases. Furthermore, the others admit that “in the majority of cases they do not provide individuals with effective protection against the risk of a rise in interest rates, as the mortgage ceilings are very high.”
Credit:- www.spainsolicitors.com
Fuster & Associates
Changes in the Spanish Justice System
Citizens may now grant powers of attorney to act in legal proceedings free of charge, and without having to contract a notary.
The Judicial Office, which was inaugurated last week, will enable citizens to bring actions for debts of up to 250,000 euros through fast track proceedings.
Forget about going to the notary’s in order to grant a power of attorney when taking legal action. As from now you can grant a power of attorney to act in legal proceedings free of charge before the judicial notary public. This is one of the many improvements to the legal system that citizens can take advantage of as of yesterday, when the procedural law reform came into force and created the new Judicial Office. Nor is this the only reform. The justice system is starting to change.
The changes to the judicial system, which came into force last week, mainly affect the division of functions between judges and court clerks. The latter will perform all the tasks that do not strictly fall within the remit of the judges in order to reduce the judges´ workload and enable them to devote more time to issuing sentences. As from now court clerks may call witnesses, impose court costs, decide whether a claim should be allowed to proceed etc.
According to the Ministry for Justice, this change will not affect the rights of citizens but will instead speed up judicial administration and improve the quality of the public services that it provides.
For the time being however, citizens may not find that legal proceedings are much quicker. «Although some of the changes, such as the power of attorney to act in legal proceedings, have been implemented immediately, we will have to wait for the common procedural services to come into force before citizens can enjoy a judicial administration that operates using quality, efficiency, and rationalisation criteria in the provision of services », explained Javier Luis Parra, Chief Court Clerk of the High Court of Murcia (TSJ) last week. According to Juan Martínez Moya, President of the High Court of Murcia, the second stage of the reform will not be implemented until October of this year.
However a wide variety of reforms to the judicial system will be implemented before this date, including some which citizens will be able to use immediately.
One of these reforms increases the amount that can be claimed in small debts proceedings from 30,000 euros to 250,000 euros. As a result, citizens will be able to claim for debts up to this amount through very easy legal procedures. As Javier Parra explained « This type of proceedings make up the majority of civil actions, and increasing the amount that can be claimed greatly increases the scope of the proceedings, and therefore significantly enhances the legal system’s capacity to resolve this type of claim ».
Furthermore, the regulations regulating judicial auctions have been amended in order to establish an electronic bidding system, to be managed by the court clerk, provided that it is technologically feasible. This will allow bidders to participate in judicial auctions over the Internet without having to be physically present in the law court where the auction is taking place. This measure improves the justice system, «leading to greater transparency and publicity, and will ensure that better prices are obtained, while practices such as two people entering into a pact that can damage a third party will be prevented ». As remarked above, reforms that improve the justice system and prepare it for the future.
Credit: www.spainsolicitors.com
Fuster & Associates
Rise in Spanish IVA
From the 1st July, 2 of the 3 categories of Spanish VAT will rise.
16% to 18%
7% to 8%
4% (is to remain the same).
What does this mean for the Spanish Property market which is already struggling to survive the current climate?
It will certainly increase the cost of buying and selling property and obtaining a mortgage in an already crippled market.
What is the government thinking?
Of course it will generate income for them but may push the market further backwards and no doubt they are hoping that prices will fall still further and generate increased interest from buyers and steady the industry but at what cost? More likely it will force more builders, promoters and agencies out of business with knock on job losses. The banks will come under further pressure and there will be many owners caught in the trap of having mortgages far greater than the value of their property causing an increase in repossessions as people struggle with their own economic crisis, losing jobs and putting more people on the bread-line.
Then there is the knock on effect for furniture and electrical companies and many other suppliers with steady drops in sales already recorded.
Buyers and Investors
No doubt there are people watching the situation with interest and for the general buyer now is the time to buy a property before the IVA increases and with so many properties available at low prices.
For the investor, they will probably sit it out and wait for rock bottom distressed sales and then pounce as the drop in price will by far outweigh the increase in purchase costs.
With the pound rising against the euro, buying a property is looking even more attractive.
Mortgages
As the banks continue to come under pressure they will negotiate on distressed properties in order to clear their overflowing books and are currently making mortgage offers which pre crisis would be unheard of.
If you have the money now is the time to buy Spanish Property.
Admin: 5 May 2010
Spanish Capital Gains Tax Relief on the Main Home
Does It Apply On Overseas Properties?
The Spanish gains tax regulations can provide relief on the sale of the main home for Spanish tax residents whose property qualifies as their habitual main residence. If you are 65 years or older the gain is tax free even if you do not buy another property. If you are under 65, the exemption only applies if you reinvest the proceeds of sale into a new main residence within a four year period, starting from two years before the sale. There is some confusion about whether this relief applies if your new main home is located outside Spain, so this article looks into this issue.
How does the relief work?
For the property you are selling to qualify as your main home, you need to have lived in it for a continuous period of at least three years from the date the property was bought or construction was completed. If you have to sell earlier because of a change of job, marriage, separation or death of a partner, the tax relief can still apply.
The relief is based on the proportion of the total sales proceeds reinvested in the new home. If it costs more than the sale price of the old home, the full gain is exempt. If only half of the sale proceeds are reinvested, then only half of the gain is exempt and the other half is taxable in the year of sale.
If the property being sold has a mortgage on it, it is the net sale proceeds (after deducting the mortgage) which need to be fully reinvested to escape capital gains tax.
The taxpayer must declare the gain on his Spanish tax return together with his intention to reinvest the proceeds into a new main home, or the relief will not apply.
Location of the properties
While the tax relief is only available to Spanish tax residents (as the property cannot be your main home if you are not Spanish tax resident), the properties themselves do not need to be located in Spain – either the residence you are selling or the new one you are buying.
So, if you move to Spain and sell your main home in your former country of residence (eg the UK) after you become Spanish resident, you may be able to avoid Spanish capital gains tax under these provisions. You have to purchase your Spanish home within the two years preceding the date of sale of the UK property or within two years following the sale. The purchase price of the Spanish property should be at least the net sale proceeds of your UK property for full relief to apply.
If the Spanish property costs less than the amount you received from the sale of your UK property, you will be charged tax in Spain on a proportion of the gain equivalent to the sale proceeds not reinvested.
Similarly, if you sell your main home in Spain and move to another country, reinvestment relief can still apply to the former Spanish home even though the new home is not located in Spain, provided that you and your family make this property your new main home. The purchase of the new home must take place within the relevant time limits and the full sale proceeds must be reinvested for full relief to apply. If the family members move overseas to the new home, but the taxpayer remains in Spain, the relief will not apply as the property has not become the taxpayer’s new main home.
An example of relief applying in such a case is given in a formal response to a query submitted to the Spanish tax administration.
Furthermore, it would be a clear breach of EU law if Spain did not allow the relief for reinvestment in a new home situated within another EU country. This situation arose in Portugal, and so the European Commission took action, as below:
“In July 2004 the European Commission invited Portugal to change its rules which prohibit the capital gains tax relief where the new main home is situated outside Portugal. The European Commission considers these rules to be discriminatory and contrary to the EC Treaty rules on the free movement of people, etc.
“Portugal did not amend its legislation within the 2 months time limit given by the Commission, so in January 2005 the Commission decided to refer Portugal to the European Court of Justice.
“On 26 October 2006, the European Court of Justice ruled that the restriction of the relief to the purchase of a primary residence located in only Portugal was an infringement of the fundamental freedoms guaranteed by the EU Treaty.
“As a result of the European Court decision, taxpayers should be able to benefit from the main residence relief in Portugal, provided the proceeds are reinvested in another primary residence within the European Union.”
By David Franks, Chief Executive, Blevins Franks