Breaking news for NON Resident UK Home Owners

Non UK residents will have to pay capital gains tax (CGT) on residential property sales in the UK from April 2015, reversing the current rule, George Osbourne announced in his Autumn Statement yesterday.

The Abitabilità and tax on the sale of Italian properties.

I have been asked a question a  few times in the last year or 2 about the abitabilità and thought I should get an answer.  Here is the question followed by the answer:

It's TAX time of year again.

Since tax reporting time (1st January 2013 - 31st December 2013) is almost upon us once again,  this week I am writing a blog to help you to prepare the necessary information and also to help your commercialista.  Feel free to share this link if you feel it would be of help to others. 

Why we SHOULD be investing in Italy!

THE CONTINUING CRISIS IN ITALY MIGHT BE AN OPPORTUNITY FOR INVESTORS, WHO ARE BOLD ENOUGH, TO INVEST SOME (NOT ALL) OF THEIR CAPITAL BACK INTO THE COUNTRY RIGHT NOW!

Le Tour de Finance (Italy) 2013. Your last chance to register!

The Tour de Finance 2013 will soon be rolling into Bagni di Lucca and Umbertide on the 26th and 27th September respectively.

We can still reserve your place at the event if you contact us at infol@spectrum-ifa.com.  Bookings can be taken no later than Tuesday 24th September.

If you are interested in Tax Residency, then you might be interested in hearing Judith Ruddock from Studio Gaizo Picchioni.

Her topic will be:

Tax Residency- How to know if you are tax resident in Italy, or not, and the consequences, in either case. And a little bit of practical advice on what do to about it either way.

If you would like more details on events and times you can check out the Tour de Finance blog post.

Lighter penalties for failing to report foreign assets correctly.

Well, after my last blog post about the fiscal monitoring which is to now take place to a much greater degree regarding assets and money held in Italy and abroad there is some good news for a change.

Guardia di Finanza, are you on the radar?

For those of you who were not made aware, or those of you who had the unfortunate shock to learn that on last year’s tax return you would have to declare all average daily account balances on foreign current/savings accounts, foreign current account transactions between foreign/Italian banks and foreign/foreign accounts, and also the movements of money between investment accounts and investment/bank accounts on balances over 5000 EUR, you will be pleased to hear that in line with an EU Law this has now been overturned and you no longer have to supply the information about the movements of your capital on your annual RW.

Yippee, I hear you shout! 

But hang on for a second.  What the Guardia di Finanza gives with one hand they take with the other. 

As of 6^th August 2013, fiscal monitoring of transactions into and out of Italy, BUT also financial transactions taking place from one foreign account to another foreign account for Italian tax residents, will be raised to a whole new level. 

British Corner Shop and Le Tour de Finance Italy 2013

The Britishcornershop.co.uk (The supermarket for expats)  have been supporting the Tour de Finance in France for a number of years and today they agreed to support the Italy events 2013.  They are offering a £100 voucher for each event and each participant will be offered the opportunity to win the raffle prize and stock up on their favourite chocolates, buns and drinks.

The events will be held in Bagni di Lucca on the 26th September 2013 and Umbertide, 27th September.

For more information you can see my previous blog post at

Tour de Finance (Italy)

If you are interested in coming along to the event to hear what the speakers have to say, you can contact us at info@spectrum.ifa.com or on 3336492356.

We hope to see you there.

LE TOUR DE FINANCE IS COMING TO ITALY. September 26/27th 2013

Following the success of Le Tour de Finance in France, The Spectrum IFA Group, in collaboration with Currencies Direct, is proud to announce that Le Tour de Finance for expats will be arriving in Italy.  

On the 26th and 27th September 2013 Le Tour de Finance will be making its first appearances at the Circolo dei Forestieri,  Bagni di Lucca and Ristorante Pomerancio, Umbertide, respectively. 

Le Tour de Finance brings professional experts in expat finance, in Italy, closer to you.  

The following professionals will be speaking on the day: 

Currencies Direct 
Talking about how to save money on currency transfers and making the transfer process easier.

Studio Gaizo Picchioni, Cross border specialist commercialisti, Judith Ruddock 
Discussing the latest changes in tax reporting and how it may affect you, and how to ensure that as a resident in Italy, you are 'IN REGOLA'. 

The Spectrum IFA Group, Italy: Gareth Horsfall and Michael Lodhi (Group Chairman)

Why financial planning for expats in Italy is important to avoid pitfalls and traps that you may not otherwise know about, or see. 

QROPS.  How UK pension holders can benefit from transferring their fund to a recognised overseas pension scheme.

Studio Legale Metta, Nick Metta
The legal and administrative issues faced when making an Italian or foreign will, for an Italian property and foreign owned assets.

Jupiter Asset Management, Rob Walker
Talking about the state of the world financial markets, economies and current government policies, how this may affect us all in the near future and how we can protect ourselves from the negative impacts of these decisions.

The events will commence at 10.30 and finish at 14.00 with welcome caffe and snacks on arrival, followed by brief presentations, a FREE buffet lunch and then time to ask questions of the experts and meet other like minded individuals. 

Register for this FREE event by sending an email to info@spectrum-ifa.com or calling +39 3336492356

Register now at info@spectrum-ifa.com to book your place.  

LIMITED AVAILABILITY.

Spectrum IFA Group Investment Sub Committee Quarterly comments

At the Spectrum IFA group we can help you to make investment decisions if  you are unsure how to invest your own money in today's volatile investment world.

Compliant Italian Investment Bonds: The tax treatment explained.

In my previous blog post I wrote about offshore investment bonds and the detrimental rates of tax for holding an offshore bond as a resident in Italy.   In this blog post I want to review the investment bond life assurance contract which is considered compliant for Italian tax purposes and fiscally tax efficient for resident of Italy.

Offshore Investment Bonds: The tax treatment explained

Offshore investment Bond, investment bonds, life assurance investment bonds,  polizze assicurative, call them what you will.  There are clear tax benefits to holding these as a tax resident in Italy, but not all are created equal and it is important to know the tax implications for each different type.

Italian succession tax: Did you know?

Did you know that the Capital Gains tax on the sale of inherited property for an Italian tax resident is ZERO.

Beware: International Financial Advisers operating in Italy!

It has been brought to my attention recently that there has been a sudden increase in the number of financial advisers looking to provide advice to expats in Italy,  and a number of you have been telling me that you have been solicited with unwanted phone calls.   

So here are some words of caution!

International advice firms that advise expats in various countries around the world are not new.  We have been around for a long time.  In The Spectrum IFA groups case, 10 years.  Even longer if you take into account the experience of some of the advisers in the group.   However, there has been one important development in this field in the last 5 – 10 years, in Europe and that is regulation.    The EU have regulated this area of financial advice a lot more.

The outcome of this is whereas International financial advisory groups might have once offered a raft of offshore products to everyone, no matter where they live, each and every product must now be tailored to meet the individual requirements of the country in which the client is living, in this case Italy.  An offshore product is often NOT suitable as they are blacklisted for Italian tax purposes (although they can be suitable in some cases) and detrimental tax treatment will apply. (I will write more about this on another blog post).

Thank fully most groups now offer the right products for the respective country in which the client lives but there are still some risks in working with groups and more importantly individuals who do not have the  correct tax status in Italy. 

Firstly, you need to ensure that the group with whom you are working is correctly regulated in Italy.  They should be registered either with ISVAP or the CONSOB, and/or have ‘passports’ from another European country to do business in Italy.  Thankfully most do and so this is the least concerning area.

My biggest concern is that of the advisers themselves.  Quite often advisers will live and work in Italy but without actually becoming resident here and without submitting tax declarations.  This is worrying.  Should you do business with these people and they are subsequently investigated by the Guardia di Finanza then I can see no other option than them leaving the country and leaving you high and dry. 

   

At the Spectrum IFA Group it is important for us to understand exactly what our clients are going through and so we are all required to be resident in the countries in which we work, which means tax declarations.

As more and more groups decide to come to Italy and work with expats, expat financial advisers will come under more and more scrutiny to ensure that we have our own personal tax affairs in order.   If not then it is problematic for the adviser but even more so for the client who is left wondering why their adviser cannot return to Italy.

I am all for good healthy competition that drives standards up and creates innovation in the market, but bad practice does not bode well for the reputation of a financial profession which has had its fair share of scandal in recent times.  

My advice is always to ask the question to whom you are working with:  Are you resident and paying tax in Italy?, ask to see their carta d’identita, and ask for evidence of F24 if required (to evidence that they pay their taxes).  Don’t forget evidence of registration in Italy and do enough research in advance.

The Spectrum IFA group has a branch in Italy and is fully registered with ISVAP and the Camera di Commercio.  (P.Iva 12418981002)

If you think that you might be in this situation or are concerned about it and would like some advice from the Spectrum IFA group  then you can contact me on gareth.horsfall@spectrum-ifa.com or call me on +39 3336492356

What our clients say about us . Richard G, Rome

Having had poor experiences with several financial advisers during my first 14 years living in Italy, it was a great relief to meet Gareth Horsfall in 2006. 

Automatic exchange of information between the UK, Italy, Germany France and Spain.

The UK is in the process of piloting a multi lateral tax information exchange agreement between the four largest EU members, France , Spain, Germany and Italy. It is based on the model being adopted by the USA's FATCA (Foreign Account Tax Compliance Act) which the 5 countries agreed on with the USA last year.

It is being implemented primarily to minimise cross border tax evasion and for wider powers to exchange information.    And, of course, the hope is that all other EU member countries will be persuaded to  join the big 5 as part of a trend towards global tax information sharing arrangements.

The big question is, if someone is living in France and the UK receive tax information about this person, even though it does not directly relate to the UK because they are not resident there, would they still share the information to the French authorities?  My guess would be yes although we are very unlikely to know for sure.   However, the continued media coverage of corporate and individual tax avoidance at the moment suggests to me that the aim is to have a full and open network of tax information that will be freely available for any authority should they choose to access it.

Welcome to the United States of Europe.

If you think that this may affect you and you would like to know how to comply with Italian law whilst limiting your tax liabilities you can contact me on gareth.horsfall@spectrum-ifa.com or call me on 3336492356.

Offshore bank accounts and exchange of information.

Just this week I have been asked the same question in 2 separate meetings and thought it would make a good blog post.

The question:  Do offshore banks report information to the EU automatically now? 

The EU day of reckoning is getting closer than you might think.

Italy is in the news again today.  The first big event is that Giulio Andreotti has died aged 94.  I have to admit that I know little about his time at the top of Italian politics other than that which I have heard.  None of it was particularly good.  

The other big event is that ISTAT (The Italian statistics agency) has today announced that Italy's economy will shrink a further 1.4% in 2013 and that unemployment will reach 12.3% later this year.  Oddly they predict that Italy will return to growth of 0.4% in 2014.   A forecast that I would hardly place a substantial bet on being correct.  

But what does this mean for the average Expat living in Italy?

A little attention pays dividends

The world is plodding steadily on, apart from Italian politics.  It seems stuck in an eternal rut.  Who knows when the various factions will start to work together for the greater good of the country.  My feeling is that there are far too many self interested parties in politics in Italy and until these are blown apart then nothing fundamentally will change (I am starting to sound like a Grillo supporter).  Unfortunately, the likelihood is that change will only be brought about by external forces, namely the Bond market.  

5 Reasons to hire a financial planner

I am often perplexed by the perception of financial planners in the media.  If we were to be led by them then my job would be to show you how to invest your money to outperform the market, when in reality even the best money managers in the world cannot even do that.

Can I make a handwritten will for my Italian estate?

I was recently asked the question by someone: 

'Why can't I just make a handwritten will for my estate in Italy since it doesn't cost anything and the authorities accept it in Italy'.  

Since I am a financial planner but not a legal expert I referred to Nick Metta of Studio Legale Metta, who provides cross border legal services, estate and succession planning for expats and Italian nationals.

If you have any queries regarding this or any particular question regarding your own estate/assets in Italy and other countries, I would urge you to get in touch with Nick directly at n.metta@studiolegalemetta.it

Nick's reply:

The seven deadly sins in bank advice

I recently became party to a report published by the FSA (Financial Services Authority) in the UK regarding the state of financial advice being provided by banks.  The report was entitled 'The seven deadly sins of bank advice'

Taxation of UK rental income in Italy

Since the recent exchange of information between HMRC and the Italian tax authorities on UK rental property owners, I have been asked the question whether rental income (when taxed principally in the UK) will be taxed again in Italy as an Italian resident. 

Top Tax Tips for Expats in Italy.

Here are my top tax tips for living or moving to Italy.

BRINGING EXPERTS TO EXPATS IN ITALY 2013

BRINGING EXPERTS TO EXPATS IN ITALY

The Spectrum IFA Group (Italy) are pleased to return in March 2013

with 2 FREE Seminars in

Lucca and Cortona on March 14th/15th respectively. 

It is your opportunity to come and speak with the experts on financial matters 

relating to you as an expat living in Italy.

Our speakers will be

Michael Lodhi, Chairman of the Spectrum IFA Group

Speaking about the consequences of governmental exchange of tax information

and the end of banking confidentiality, in Europe.

Jeremy Ferguson, SEB International      

Demonstrating the tax saving benefits of the Life Assurance Investment Bond in Italy.

Mark Riggall—Vice President/Sales UK of  JP Morgan Asset Management

Speaking of the changing trends in Investments and how to maximize the potential of your money in a low/no growth world.

The Events will be held at

The Hotel Carignano, Lucca on the 14th March 2013

and

The Hotel Il Melone, Cortona on the 15th March 2013. 

The Seminars will commence at 10.30am for coffee, with the speakers starting at 11am.

The Event will include free refreshments and a buffet lunch with time for you

to present direct questions to each of the speakers.

If you would like to attend this FREE seminar, you can reserve a place by contacting us on

Tele:  +39 333 649 2356  or   email gareth.horsfall@spectrum-ifa.com. 

Due to limited availability please reserve a place early.

A Free Inheritance tax and finance seminar in Puglia!

I will be kicking off my seminar season this year as a guest speaker at a seminar on Cross Border Italian Inheritance Tax and Estate Planning hosted by the Studio Legale Metta in Conversano, Puglia on the 2nd March 2013.

I will be presenting on the end of banking secrecy in Europe and tax efficient ways to invest capital.

If you would be interested in attending this event then the full details are below.  You can Register Here

CROSS-BORDER ITALIAN INHERITANCE AND ESTATE PLANNING SEMINAR

 Saturday, 2 March 2013 - Conversano, Puglia, Italy

Studio Legale Metta is pleased to host a free seminar to discuss the legal aspects of Cross-Border Inheritance matters and Estate Planning in Italy. The seminar is for private individuals looking to hear directly from professionals who work in the area of cross-border Italian inheritance.

Held on Saturday, 2 March 2013, the seminar will take place at Agriturismo Montepaolo in Conversano, Puglia from 10:30 a.m. to 1 p.m. Following the seminar will be a lunch for attendees and speakers. 

Key areas to be discussed:

• Italian succession overview.

• Succession by will.

• Intestate succession: What happens when there is no will? Which country's law presides?

• Types of legally valid Italian wills: Holographic, Public, Secret.

• Italian will in violation of reserved family shares.

• Real estate gift as estate plan strategy and related issues.

• Succession of Italian property owned by a non-Italian.

• How to adopt foreign legislation to regulate Italian estate succession.

• Drafting a foreign will that covers Italian assets: essential content and legal requirements. 

• Probate in Italy.

• Italian inheritance taxes.

• Estate plan strategies to minimize or eliminate Italian succession bureaucracy and costs.

• Overview of EU Rules of Regulation regarding cross-border successions (No. 650/2012 of 4 July 2012).

Gareth  Horsfall will be presenting:

• End of banking secrecy and bank confidentiality.

• Implications of EU directive for investors and savers in 2013 and beyond.

• Tax efficient savings and investing opportunities for Italian resident expatriates.

• Investing ideas for a high inflationary environment.

Speaking on the above topics will be:

- Nick Metta, Head of SLM’s International Department

- Alessandro Armenio, Italian Notary Public (notaio) with a large practice assisting foreigner with Wills and Inheritance.

- Gareth Horsfall - Independent Financial Adviser specialising in advising Italian resident expatriates.

The seminar if being offered without charge, however, space is limited so please reserve your admission soon.   Register Here

How we advise our clients at The Spectrum IFA Group.

It is common place in the Independent Financial advise world to recommend investments from a large range of different types of investments.  However, the past has shown us that not all are created equally and there have been a  number of high profile fund closures, collapses and disappearances in recent years.

Lump sum drawdown from a UK pension in Italy

For anyone who is resident in Italy for tax purposes and is holding a UK personal pension, and is intending on drawing down the 25% lump sum from the pension whilst resident in Italy: you want to think before you do so.

Warning to UK Rental property owners!

It appears evident from the number of people contacting me recently that HMRC in the UK have shared information with the Italian tax authorities regarding anyone who has a UK rental property and is declaring it in the UK for income tax purposes, but failing to declare it in Italy

QROPS Drawdown update

The UK Government have just announced (in the draft paper) to increase the current drawdown rate from UK pensions from 100% to 120% of the GAD tables.

This should have a knock on effect for all those QROPS providers who not currently offering 120% GAD, as they can now fall in line with the UK ruling.


It is expected to take effect from March 26th 2013 round the time of the Budget.

Good news for all those people who are due to review their annual drawdown limits or those who are looking at their QROPS options at the moment.

More taxes for Italian rental property owners

If you are renting a property in Italy and using the flat rate deduction system, you will be aware that you don't need to register for the purposes of IVA, and as a result you get a flat rate deduction in lieu of all expenses at 15%.

This has just been changed.  The flat rate deduction is now only 5%

If you are renting property in Italy, then you might consider opening a Partita IVA, otherwise the process could start to become quite pricey. 

New Year tip to save money

It is that time of the year again when the New Years Resolutions are being implemented and we are all starting to counting the pennies and assess the damage from the Christmas period.  

With this in mind I thought I would write a quick refresher for those of you who are looking to save some money in 2013.

Why finding a good commercialista is vital to life in Italy

Living in Italy is never easy.  But living in Italy with a bad commercialista is disastrous as one couple found out, to their horror.  Their real life tale is told below.

Patrimoniale - Daylight Robbery

For those of you who are unfamiliar with the operations of the Italian Government, you will not be pleased to hear that they are prone to dipping into peoples savings to fund their own activities.  This is commonly known as The Patrimoniale.

My own description is Daylight Robbery.  Which in turn reminds me of one of my favourite songs from a band called Morcheeba, called......Daylight Robbery.  If you have never heard it and wish to, then just click on the link below.  The lyrics are telling!

http://www.youtube.com/watch?v=jXjaQfSDcac