Pension Legislation Changes – Malta

Pension Legislation Changes – Malta

Malta remains as one of the world´s leading jurisdiction for pension business and the jurisdiction, its policy makers and industry, are determined to maintain that position by offering well regulated, compliant and prudent pension products. There have, however, been a number of legislative changes to Maltese pensions since the start of 2019, ranging from tighter investment due diligence to full disclosure of commission. For advisers and clients, one of the most important measures introduced is the requirement for advisers to have greater regulation than ever before.

Investment advisers, in addition to having to be licensed/authorised to provide investment advice in the country where the adviser firm is established, must also be duly authorised and regulated to provide the investment advice being given to the member, in the member´s respective jurisdiction. For European based investment advisers and members, the rules require that the adviser will need to be duly regulated to give investment advice in their European country of establishment, and where the advice is provided to a member. If the member is based in another European jurisdiction, the adviser firm must have pass ported their services under the Markets in Financial InstrumentsDirective (MIFID II) and the Insurance Distribution Directive (IDD) in the case of insurance basedinvestment products, to this EU jurisdiction. To put it simply, advisers now need to have access to both the IDD and MIFID II licences, which will essentially allow them to advise on both direct and indirect investments. Indirect investments are those via a life assurance bond or wrapper.

We are pleased to say that whilst many other advisory firms are now rushing around to make sure they have licences in place ahead of the six-month transition period, our consultants already have both the IDD and MIFID II licences, so it is pretty much business as usual for us.

The new rules also state that every member of a Maltese pension must have an appointed investment adviser, unless they can categorically class themselves as a “professional member”.

At Expat Services, we see the introduction of these new regulations as a positive move made by the financial and pension industries. Increasing the protection for clients both from a regulation and due diligence stance can only be considered a good thing in our opinion. If you have a Maltese pension or have ever thought about transferring a pension overseas, we would welcome the change to discuss your options with you.

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Funeral Insurance- Not Easy but very necessary….

Liberty Seguros has launched a very interesting Bespoke Funeral Insurance, which I thought may be interest to my clients. Never easy to think about your funeral, but of so necessary.

 

Death is always a difficult subject to discuss, but when living in Spain, it becomes far more important to think about the future and how to make this stressful time easier for your loved ones. With this in mind, at Jennifer Cunningham Insurance, we are delighted to introduce a Bespoke Funeral insurance package, at an astonishing starting premium from € 70 for the whole year.

For the Spanish, funeral insurance is more or less a necessity and is taken from a very early age. Funerals are very expensive and will put an enormous amount of pressure on your loved ones. Before any arrangements can be made, it is necessary to have a NIE number, your bank accounts may be frozen and the paperwork completed, which all makes it far more difficult for your family.

Funerals plans can be made in one payment or a deposit and the remainder paid over 5 years, with interest added. This option is an excellent choice.

However, it may not be the correct time financially to commit to this option. You may have an investment coming to you in the future but what if something happens before then, or your income may not be able to stretch this far? Liberty Seguros have introduced an amazing funeral insurance, a Bespoke package that gives you the choices to tailor make the insurance to your needs and those of your family, at an affordable yearly premium. There is just no reason not to come and talk to my consultants now, for the best way for you to protect your loved ones.
If you wish to ensure that your family has more financial protection on your death, Bespoke Life Insurance is further option. This also can cover the cost of the funeral and provide the necessary funds to cover other outstanding costs.
Another excellent option from Liberty Seguros is the Accident Plan, which protects you in so many ways.

For more information email info@jennifercunningham.net or visit the website www.jennifercunningham.net.

Jennifer x

General Quarterly News from JC Expat services financial colleagues

Newsletter January 2019-01-31

General News from JC Expat services financial colleagues

Well, where do we begin? It has certainly been an interesting quarter, with endless developments on Brexit (“the gift that keeps on giving”), the ongoing tariff disagreements between the US and China, and the increasing problems Italy and their economy are experiencing.

Brexit, without doubt, is the most known and spoken about topic, as we simply cannot get away from the news – even if we wanted to. This is also the most relevant subject to the majority of us living here in Spain, as, depending on the outcome, it could have a direct impact on us, especially if there is a no-deal scenario. This, as we know, is not a certainty and there are many people who still believe that the UK will not leave the EU if there is a strong campaign for a second referendum.

Over the past 3 months we have seen Theresa May suffer a humiliating defeat in the House of Commons, which led Mr Corbyn to table a vote of no confidence. The PM survived the vote of no confidence the following day, and pledged to return to Parliament with a revised deal which she believed would pass. This didn´t quite go to plan, and the PM now has to head back to Brussels and attempt to re-negotiate her deal. The early indications are that this will not be easy, with the EU seemingly holding its ground and dismissing any possibility of a re-negotiated deal.

Importantly, from an investor´s point of view, we do believe that the possibility of a “no-deal Brexit” has already been accounted for in the market. As many of you are aware, we speak with discretionary fund managers from the likes of Rathbones and VAM on a regular basis, and they have echoed our sentiments.

Markets suffered badly the second half of 2018, mainly due to the unknown outcome of BREXIT and, as time passed by, the increasing likelihood that there will be no deal. Markets tend to be more volatile in times of uncertainty, compared to times of a known outcome (whether this be a good outcome or not).

The start of 2019 however, has been positive. Following the two parliamentary votes, and the conclusion that Theresa May will be revisiting Brussels, there is new hope we can avoid a no-deal scenario. Despite ongoing volatility, this has boosted the majority of European Markets to post positive returns for January 2019.

Based on our view that a no- deal Brexit has already been accounted for in today´s market, perhaps the biggest threat to investments, and subsequent fund performances, rests with whether a trade deal can be agreed on between the US and China.

China and the US are engaged in a trade war as each country continues to dispute tariffs placed on goods traded between them. The disagreement has been known for a number of months but there is now a deadline of the 1st March 2019, at which point both countries hope to agree on a deal.

President Trump, in typical Trump style, has handed out numerous threats since the start of this disagreement, with the latest comment from his admin team being “if, by the 1st March, the parties are unable to reach an agreement, the 10% tariffs will be raised to 25%”. From an investment point of view, we hope that a trade deal is agreed upon, as this will bring some stability to the market and should, in theory, benefit equities throughout 2019.

This then brings us to Italy. Italy has now fallen into recession after its economy shrank by 0.2% during the last quarter of 2018, its second consecutive negative quarter.

Italy’s economy has been weakening since early 2017 and has recently been hit by a slowdown in key trading partners, including Germany and China. The country’s government has also been involved in a fight over its budget deficit with Brussels. Critics say this has damaged market confidence, pushing up Italy’s borrowing costs and hurting the economy.

Having said this, Italian PM Giuseppe Conte said on Wednesday that conditions were in place for a recovery over the second half of 2019, but we will wait to see if this comes to fruition. From an investment point of view, we do not believe that this will be a major drag on the market, for the time being at least.

Modelo 720

The Modelo 720 is an informative declaration made to the Spanish authorities advising them of any asset an individual holds outside of Spain, with a value of 50.000€ or more. This declaration has to be made before the 31st March and is in relation to the value of the assets as of the 31st December the previous calendar year.

Modelo 720 has 3 reporting categories, split into bank accounts, investments and immovable property and the threshold of 50.000€ applies to each. If the asset in question is in a different currency, the exchange rate will determine whether or not there is a need to declare. For example, if an individual has 30,000 pounds in a UK bank account, this would not need to be declared as with the current exchange rate, the euro equivalent would be approximately 34,200€ and therefore short of the 50.000€ requirement.

Many individuals have bank accounts or investments that are held in joint names with a partner. If this is the case, each person must declare the asset as if they held it individually, stating the full amount and their percentage of ownership. Any asset held within Spain does not need to be declared as it will already be known to authorities.

Once an asset has been declared, there is no need to declare again in later years, unless the value of the asset has changed by more than 20,000€ or the asset has been sold or closed down.

As with many declarations worldwide, there are fines that an individual could face if they fail to provide the information requested. These fines could be imposed due to late submission of the declaration or for misleading or false information.

Staying Invested in the Market

During volatile markets, there is often an urge for investors to try and “outwit” the market by attempting to sell investments ahead of big falls, or buy investments just before a significant rise. Unfortunately, this is nigh on impossible to predict and although we may be lucky enough to disinvest from the market at the perfect time once, it will be impossible to always get it right.

It is also not uncommon to hear investors say that in a gradually falling market, we should disinvest as early as possible. Once again, the right time to do this is extremely hard to predict – hindsight would be a wonderful thing. We have seen numerous examples over the past few weeks and months where a global market has been steadily falling over the short term, but then bounces back with big gains on a particular day.

One of the investment companies we work with, Castlestone Management, carried out an analysis of the S&P 500 (Index of America´s top 500 companies) over the last 20 years, and the results made for some interesting reading.

They concluded that during the period 01.01.1998 – 31.12.2017, “Investors who stayed fully invested in stocks enjoyed the best total return performance” over this 20 year period. This stat is backed up with the following facts;

If an investor had stayed fully invested over this time period, they would have received an annual average growth of 7.20%.
If the same investor had missed just the 5 best days over this entire 20 year period, they would have received an average annual growth of 5.02%.
If the same investor had missed the best 10 days over the same period, they would have received an average annual growth of 3.53%.
If they missed the best 20 days, the average annual growth would drop to 1.15%, and missing the best 40 days would actually put them into a negative loss of an average -2.80%.

These results are quite astonishing considering we are studying a 20 year time period, and only a maximum of the best 40 days missed. There is a saying in the industry which has never been more true having read these results; “It´s about time in the market, not timing the market”.

Currency

Sterling has made a strong start to the year, strengthening by around 4% since 1st January. This positive news for the pound is down to the expectations that Britain can now avoid a no-deal Brexit.

There is a strong belief that even if Theresa May returns from the new negotiations in Brussels empty-handed, the prospect of a fresh set of amendments being debated in London on the 13th- 14th February will support the pound.

The assumption that we can avoid a “no-deal” Brexit has prompted the GBP-EURO rate to hit its highest level since 2017, which currently stands at 1GBP/ 1.421€.

Over the pond, the dollar has experienced contrasting fortunes, weakening after the Federal Reserve pledged to be patient with further interest rate hikes. Although the Fed left interest rates unchanged last night, which was expected, they did discard their promises of “further gradual increases” in interest rates.

Following this news, the dollar has fallen to a 3-week low against other major currencies, currently standing at 1GBP/1.3124 USD, and 1€/1.1468.

 

For trusted information and to find out more contact us:

☎️ Costa Blanca North:
965 795 372

☎️ Costa Blanca South:
965 724 734

Are you Modelo 720 Ready?

The Modelo 720 is an informative declaration made to the Spanish authorities advising them of any asset an individual holds outside of Spain, with a value of 50.000€ or more. This declaration has to be made before the 31st March and is in relation to the value of the assets as of the 31st December the previous calendar year. Any asset held within Spain does not need

to be declared as it will already be known to authorities.

Modelo 720 has 3 reporting categories, split into bank accounts, investments and immovable property and the limit of 50.000€ applies to each. If the asset in question is in a different currency, the exchange rate will determine whether or not there is a need to declare. For example, if an individual has 30,000 pounds in a UK bank account, this would not need to be declared as with the current exchange rate, this would be equivalent to approximately 33,000€ and therefore short of the 50.000€ requirement.

Many individuals have bank accounts or investments that are held in joint names with a partner. If this is the case, each person must declare the asset as if they held it individually, stating the full amount and their percentage of ownership.
Once an asset has been declared, there is no need to declare again in later years, unless the value of the asset has changed by more than 20,000€ or the asset has been sold or closed down.
As with many declarations worldwide, there are fines that an individual could face if they fail to provide the information requested. These fines could be imposed due to late submission of the declaration or for misleading or false information.

Are you Modelo 720 ready?

31st March is the deadline by which residents in Spain need to submit their annual Form 720 (‘Modelo 720’) listing their overseas assets, where applicable. If you have previously submitted a form, you only need to declare assets if they have grown a certain amount or you have sold or closed them.

Besides confirming what you have to declare this year on Modelo 720, this is also a good time to consider whether you are holding your assets in the most tax-efficient vehicles for Spain. If you have investments that were set up with UK taxation in mind, you may be paying more tax in Spain than you need be.

Summary of the rules

Modelo 720 has three reporting categories, based on bank accounts, investments and immovable property. You have to report all assets in a particular category if the value of your total assets in it amounts to over €50,000. This only applies to assets located outside Spain.

In general, you are obliged to report assets if you are the owner, a settlor of a trust, an effective beneficiary from a trust, authorised signatory, or you have the authority to dispose of the asset. This includes assets held by a company, trust or fiduciary.

You need to report even if your personal share of assets is less than €50,000. With joint assets, each owner needs to declare the full value (not pro-rated) and indicate their percentage of ownership.

In most cases, assets are valued using the wealth tax rules as at 31st December each year. For assets held within financial institutions (eg bank accounts), you also need to declare the average balance over the last three months of the year.

You need to report the value of the assets in Euros, so any investments held in other currencies need to be converted using the official exchange rate as at 31st December of the relevant year.

We can help.. We have trusted associates who can ensure your assets are in order and declared correctly.

Get in touch to find out more…
info@expatservicesspain.net
Or as always talk to one of the team on:
☎️: +34 966 461 690

Getting health insurance in Spain: A complete guide

Healthcare isn’t usually straightforward and when you add insurance into the mix, it gets even more complicated. When you’re headed to a new country, there are going to be new rules, new regulations and new forms to fill out before you can receive treatment.

If you’re headed to Spain, you’re in luck: they have one of the best public healthcare systems in the world. But just because they have a strong public health system doesn’t mean you can’t or shouldn’t get insurance. Whether you’re packing up to move or have already settled in, this article will help you understand how to access and use health insurance while living in Spain.

What kind of healthcare system does Spain have?

Spain is known for having one of the top healthcare systems in the world. The country has a universal healthcare system and also offers private insurance options for those who want to expand their coverage. The overwhelming majority of Spaniards and expats use the public Spanish National Health System (SNS, which stands for Sistema Nacional de Salud)

SNS doesn’t cover every health expense though. For example, ambulances, dentists and pharmacy costs are additional out-of-pocket expenses, where individual payments are used to supplement the full price of the services.

Private insurance can be an alternative to cover these added expenses, but it’s good to keep in mind that the insurance company will often limit the list of services that are available and also have a list of prefered care providers you can visit. Make sure to check with your insurance company about this before you visit a specialist.

People sometimes turn to private insurers because there’s some concern about the lengthy wait times to see public health providers. Still, by all accounts and comparisons, the public Spanish healthcare system is robust and high-quality. This are some average wait times for procedures in Spain:

Procedure Average wait time in Spain
Seeing a specialist 65 days
Undergoing a special treatment (e.g., prostatectomy) 62 days
Hip replacement 123 days

Who needs to be covered by health insurance, by how much, and what’s actually covered?

Spain’s universal healthcare system, SNS, ensures that no citizen or long-term resident goes uninsured. Spain’s constitution actually requires that the state provides medical care for all basic and preventative care.

For European travelers, the European Health Insurance Card (EHIC) will enable you to access the necessary SNS healthcare in Spain at a reduced cost, or sometimes for free if you’re on a temporary stay. Once you plan on staying in Spain for a long-term basis, you should register for their SNS coverage or purchase private insurance.

If you’re a visitor, remember that all non-EU or UK travelers (US and Canada) should already have valid health insurance coverage prior to obtaining a residency visa.

How long can I be uncovered by health insurance?

Because Spain’s health insurance system is considered universal, there are no citizens or long-term residents without access to emergency health care. All foreigners and citizens have a right to be served for emergency or urgent treatment in Spanish hospitals, no matter your insurance coverage or whether or not you have a general practitioner.

EU residents can have free healthcare for the first three months under their EHIC. After that, you’ll need to look into either private insurance or registering for the public option. You can register into the public option by starting to contribute to the social security system.

Cautious travelers are always welcome to purchase travel insurance. Having travel insurance will protect you in the event of an emergency. These plans can be tailored to your needs, so if you’re just visiting for school or vacation, they may work out to be your cheapest and most risk-free option.

Are there any penalties for not being covered by medical insurance?

While there’s always access to healthcare for all Spanish citizens and residents, not having the right coverage can cause some delays in needed services. For example, some providers may not serve long-term stay foreigners who have yet to transition from their EHIC coverage to Spain’s universal SNS coverage. Additionally, there’s a distinction between private doctors and health centres versus public facilities. Only the public facilities will provide free care; the private providers will add extra fees if you don’t have the correct insurance.

Private or public health insurance, which should I choose?

Private insurance

Because of Spain’s widely recognised free and universal healthcare coverage, not many citizens or long-term residents use private insurance. However, the coverage can be helpful for those with special health needs, to aid in additional coverage with prescription drugs, for dental care, or for expats who don’t qualify for the public healthcare (for instance when you don’t work or haven’t reached the retirement age yet).

We can help with all your requirments and also assist with the transfer of any existing policies you may have by offering extra special conditions, similar terms and conditions and a more comprehensive medical directory of English speaking doctors.

Contact our ASSSA Sales Consultant on 965 795 372 or info@jennifercunningham.net

Residency certificate: ‘Permanent’ question answered

BRITISH expats aiming to be ‘Brexit Ready’ ahead of March next year are increasingly asking about their status as ‘permanent’ residents.

The current road show being staged by the British consulate team aims to answer personal questions over the UK leaving the European Union, a move scheduled for March 29, 2019, – although an agreed deal is likely to involve a transition period. However, there are a number of questions about whether the word ‘permanente’ – or ‘permanent’ – is needed on either the large green paper certificate or the smaller version. The Embassy has now provided us with a clear answer.

It is understood that the wording has evolved since teh certification was first introduced for expats seeking resident status and documents differ. A spokesman for the British Embassy in Madrid this week confirmed: ‘As long as you have a green residency card or certificate, you are on teh central register of EU nationals; which most people refer to as residencia. “These cards or certificate do not expire. You must, nowever ensure it shows your current address and update it in the events of your circumstances changing”

How do I register as a resident in Spain?

How do I register as a resident in Spain?

As an EU citizen you must register as a resident if you plan on living in Spain for more than 3 months.

If you are here for a total of 183 days in a calendar year then you are classed as being a tax resident of Spain and should be registered as resident.

You should register in person at the Oficina de Extranjeros (immigration office) in the province where you live or at the designated police station.

You will be required to provide documents to support your application which currently is:

NIE – your foreigner’s tax number
The form S1 if you are a pensioner, SIPP card or proof of private health insurance
Confirmation of payment for the residencia in the bank
The completed residency application form
Passport
Proof of income

You must be able to demonstrate that your life in Spain is financially sustainable. You will be expected to show bank statements that cover the previous three months and that you have a monthly income of above €800 per person.

If you have come to Spain to work then your employer should provide you with un certificado de vida laboral – which is proof that you have work here.

If you are under pensionable age then you must have proof of health insurance if you are not on contract to work. The insurance must cover everything and you may also need to show proof of payment. There are local health schemes in many parts of Spain that might be an alternative.

The Spanish authorities will issue you with a credit-card-sized residence certificate with your:

name
address
nationality
NIE number (Número de Identificación Extranjero)
date of registration

There has been some confusion recently about the length of time a residencia applies. If you are a member of an EU country then your residencia does not need to be renewed. If you are not, then renewal is every five years.

Older residence certificates are larger (A4 size) but are still valid. You do not need to apply for a credit-card-sized certificate unless your circumstances change (for example your address) or unless you want to.

After you have been registered as a resident for five years, you can apply for a certificate of permanent residence in Spain. You will be issued with a similar credit card size Residence Certificate, but it will additionally state that you are a permanent resident (residente permanente).

For those that obtained their residency card before the 29th of March 2014 and have been living in Spain since then, it will be easy to obtain a permanent residency card if they do not have one yet. Please, check if your residency card is named as “residente comunitario” (EU citizen resident) or “residente comunitario permanente” (Permanent EU citizen resident).

Below, you will find examples of “residente comunitario permanente”, in the two current formats.

If you have “Residente comunitario permanente” on your residence card, this means that you already have permanent residence and no further action is required.

Source: https://www.gov.uk/guidance/residency-requirements-in-spain

HMRC Tax Briefings for Expats – September 2018

 

 

 

 

 

HMRC representatives from the UK visited Moraira and Rojales yesterday to talk about tax issues. HMRC has introduced new legislation that requires individuals to make sure their foreign income and assets are in order before a 30 September 2018 deadline and the arrival of tougher penalties.

The main points to come from the meeting were as follows;

There are two scenarios where a penalty could be imposed; either because of deliberate non- compliance (people trying to get away without paying taxes by not informing HMRC of things on purpose) or because of an error resulting in non-compliance (incorrect information given to HMRC).

Penalties are currently 30-40% on top of tax amount due up to end of September. But from 1st October this is increased to 100-200%.

You can however avoid this penalty if you have a “reasonable excuse” , for example you went to an accountant and he calculated your tax liability incorrectly and as a result the wrong amount of tax was paid due to their error.

These regulations only apply to Spanish tax residents if; they have income derived from a UK property (rent) , if they have income derived from a UK civil service pension or if they have sold a piece of art/jewellery or house in UK.

The 30th September deadline is to inform HMRC. People then have a 3 month window to actually make the correct changes if needed.

For financial help and invaluable advice on living here in Spain
http://www.expatservicesspain.net
Talk to one of the team:
📞+34 966 461 690
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