Monday, 28 August 2017

Britons continue to move to Europe – Are you one of them?

Moving to Europe is a dream for so many Britons. Some aim to retire abroad, while others cannot wait and move over while still working, or take early retirement to start the dream sooner rather than later.

What about you? Around 900,000 UK citizens are currently long-term residents of other EU countries, according to the Office for National Statistics. But will this trend continue after Brexit? The referendum led to uncertainty over whether Britons already living in Europe would keep their current rights, and also whether it would mean less new people moving over if they chose to wait until after Brexit negotiations were concluded.

In fact, we have noticed a surge in interest from people who want to leave the UK, and as soon as possible. With offices in Spain, France, Portugal, Cyprus and Malta, we are also getting enquiries from people who have not yet chosen a country and are investigating their options – but most are pretty sure they do want to leave the UK and preferably before Brexit.

Residency rights

Reassuringly, both the UK and the EU have confirmed that securing citizens’ rights is a top priority. Both sides have committed to recognise existing residency rights. So if you are already fully resident within the EU – or gain residency before a certain date – you should keep the right to stay there permanently. What we do not yet know is what the cut-off date will be, or what the residency rules will be for those who arrive after Brexit. Following the negotiations, new mutual agreements should lay out how processes like acquiring residency, visas and permits will work in a post-Brexit world. We anticipate that most countries will continue to welcome British expatriates, but the procedure may be less straightforward than today. If you want to live in the EU but are still a UK resident, you may want to secure residency soon – under current rules – rather than waiting to see what happens.

Which country?

For many people it is an easy decision; they have visited a country a few times and can happily picture themselves living there. But could the tax implications put you off? Others are still weighing up a few different countries. In this case you need to think about which country will suit you best, but also research the tax regimes as one of the factors to consider. For most of us, lifestyle is more important than how much tax you pay, but tax does play a part and tax burdens vary across countries. Some countries, like Portugal and Cyprus, have regimes in place to attract new residents and these could potentially save you considerable amounts of tax. What we suggest you do is list the countries you would like to move to in order of preference, then discuss your choices with a cross-border financial advisory firm like Blevins Franks.

You may be surprised to find that, with effective, compliant tax planning in place, the taxes in your preferred country are not as high as you imagined. With a deep understanding of the local tax regime and planning opportunities you may be able to significantly reduce your tax liabilities. This is particularly the case if you are retired and have pension and investment income, as how you hold your assets can make a big difference to how they are taxed.

Tax and estate planning tips

This is not an area for do-it-yourself tax planning. However much research you do on the internet, it will not match the knowledge and experience you get from a specialist who lives in the country and has been working with the local tax system for years and knows how to use it to your advantage. The answer for you may even be to move to one country initially to take advantage of their tax breaks, and then later move to your preferred country. You will need specialist, highly personalised advice to establish the best course of action for you.

You also need to think about when to sell assets. Weigh up whether you would be better off selling UK property and investments while still UK resident, or waiting until you are resident in your new country. It is also important to consider estate planning when moving, as each country has its own succession laws and often some form of inheritance tax, typically with very different rules to the UK. Again, these rules can often be overcome or mitigated with local knowledge and careful planning.

Cross-border financial planning can be complex at the best of times. The new global automatic exchange of information regime makes it even more important to get this right, preferably from the outset, and Brexit now adds further considerations. Specialist advice from a firm that can advise on a few countries and the interaction between regimes will be invaluable as you navigate this new world.

Article courtesy of Blevins Franks. Blevins Franks has been providing specialist financial advice to British expatriates across Europe for over forty years.

Sunday, 20 August 2017

Should I have a survey report?

Some buyers – not many it has to be said, think about demanding a survey when they find their dream French house. They feel that it is the norm in the UK, and seek that extra reassurance.

Do you need that comfort blanket? Before answering, if you have a reasonable knowledge of houses you will probably back your own eyes and experience. Some agents offer the alternative of a local builder to express an opinion. The 'expert' in the bar is usually a bad idea, in our experience. If you have serious concerns you need a professional answer.

Ask the “surveyor”, (but beware they are not all surveyors), what they will report on, perhaps more importantly what is likely to be excluded and if you have any special worries, that they look at anything of particular concern or interest to you. Do ask in advance of the survey, rather than after it has been requested. In the grand scheme of things, a pre-purchase survey is a relatively small cost, typically a few thousand Euros for a medium size house. But that is a lot of money towards that new bathroom or other project that needs doing.

The Dossier de Diagnostic Technique (DDT) – the compulsory set of reports required before you can sign a Compromis de Vente (CdV) offers a wealth of information for a buyer. Some of it is limited, and some can be a little “over the top”, but very detailed information, a good base to start with. Remember though that these reports are measurements against new build standards for today, not a diagnostic of a C18th Manoir…….. So, use with caution.

Vendors are often wary of buyers requiring surveys. It is not common practice in France, and is frequently seen as a tool to try to renegotiate the price, therefore treated with suspicion. A good agent will take time to assure their vendor that requesting a survey is in fact a positive sign, since this is an investment on your part, an indication of serious interest. But it can create friction if not handled well. Negotiation is always a skill of diplomacy and good agents will broker a deal that suits all parties, the “win / win” scenario.

So, should you have a survey report? Yes, if it gives you peace of mind when confirming your choice of property purchase. But, as a warn of caution, many buyers who request a survey, then report back to us that they are proceeding in any case, as they were aware of everything highlighted in the report ...