New Year Resolution To Improve Your Financial Planning


Please note that this article is over six months old. While Blevins Franks takes care to make sure that information is accurate on the date of publication, some content may change over time. You should not rely on the accuracy of legislation and tax information in this article; take professional advice for your circumstances.

Here we are at the beginning of another year again, a time when many people reflect on the previous 12 months and look ahead to what they can improve over the coming year and beyond.

Here we are at the beginning of another year again, a time when many people reflect on the previous 12 months and look ahead to what they can improve over the coming year and beyond.

Do you already have a considered, strategic wealth management plan in place? If not, this is a good time to stop and review your investments, pensions and tax planning to evaluate if they are ready for what 2013 may have to bring and, importantly, if they are designed with a long-term view to preserving your wealth and meeting your objectives.

For the most effective results, and peace of mind that you have considered everything and have the most up to date information to hand, you should discuss your current financial planning, objectives and circumstances with a professional wealth manager like Blevins Franks which specialises in providing wealth management and tax planning advice to expatriates.

Tax planning

One of the key trends over recent years – and which is set to continue – is tax rises. Taxpayers across Europe are paying more and more tax. Higher earners have been hit hardest, though most people are affected one way or another.

Are you sure that your assets are structured in the most tax efficient manner for your country of residence, and that your tax planning takes all the latest tax changes into account? You should ask a locally based tax planning specialist like Blevins Franks to review your current arrangements and establish if you can lower your tax liabilities on your savings and investments and protect your wealth from capital taxes where possible.

At the same time you should consider what you can do to reduce the inheritance tax liabilities for your heirs, both in the UK and in countries like Spain and France. Many people intend to review their estate planning but never quite get round to it. Make 2013 the year when you get it sorted, to ensure you leave as much of your estate as possible to your heirs rather than the taxman.

Probate can be a lengthy and complicated process, especially when you have assets in a few different countries. You may be able to make life easier and cheaper for your heirs by using financial arrangements whereby the assets can be passed directly to your chosen beneficiaries. Your wealth manager should advise you on this.

In tandem with tax rises, governments across Europe have been clamping down on tax evasion over recent years, and we will see much more of this over the coming years. Whether you are looking to lower your personal tax liabilities or those for your heirs, it is essential to only use arrangements that are fully compliant in your country of residence as well as, in the case of inheritances, where your heirs are based.

In Spain the new reporting law comes into effect this year, and you have to declare all your overseas assets, from bank accounts to property, worth over ?50,000 by 30th April. Failure to do so would incur very costly penalties. This is part of Spain?s latest efforts to recoup unpaid tax and prevent further tax evasion, and is one of the measures included in its new anti-tax fraud law.

Savings and investments

Successful investment is about managing risk versus return and having a well thought out portfolio strategy specifically based on your personal circumstances, needs and objectives.

Consider the following:

Did you buy your current investments according to a strategic overall plan, or have you bought shares and funds here and there over the years? If the latter, it is time for an overall review. Your portfolio may be riskier than you realise, and riskier than it need be to meet your objectives.

Are you confident that you have adequate diversification and the right balance between assets to reduce risk?

Is your portfolio specifically targeted to your needs? For example, if you require income, do you own assets which produce a natural income so that you do not have to withdraw capital?

Have any of your circumstances changed over the last year or so? If so your portfolio may need adjusting accordingly.

Has your portfolio been reviewed over the last 12 months to see if it needs re-balancing to remain in line with your risk profile? Re-balancing helps to control risk and tends to have a positive effect on portfolio performance.

Finally, going back to tax planning, how tax efficient are your current investments? You will not want to lose any more of your income and gains to tax than you have to, but are your savings and investments tax efficient in your country of residence?

What matters are after tax returns. Ideally tax planning and investment planning should be tackled together. The two are inextricably linked and you want to find a wealth manager who can provide both investment expertise and tax expertise.

Blevins Franks have specialised in providing integrated tax and wealth management to British expatriate for decades, and would review all your current financial planning, along with your needs and objectives, and recommend the best way forward for you for 2013 and beyond.

Tax rates, scope and reliefs may change. Any statements concerning taxation are based upon our understanding of current taxation laws and practices which are subject to change. Tax information has been summarised; individuals should seek personalised advice.