Living abroad tips and hints for money savers

Biggles

There is a myth that the over 60s receive £200 winter fuel payment. Not true... When I received my first payment on attaining the age of 65 in 2000 I, like everyone attaining the age of 65, after April 2000, had my Marriage Tax Allowance taken from me by our 'Generous Government'...

That only applied to those, born before 1935, who were still receiving the Married Couple's Allowance, which was gradually being phased out over a number of years and, in fact, finished in 1999/2000.

Now, although I haven't had the benefit of the Married Couple's Allowance, I shall get a nice boost to my Personal Allowance (currently an increase of £2,245) on reaching 65.

WishI'dReadSooner

http://news.bbc.co.uk/1/hi/business/5301710.stm

Take a look at the above BEFORE you continue topping up your state pension. Don't forget you can back pay 6 years.
It isn't legislated yet BUT it looks as if it's going to come in this year.
HOLD ON before you consider topping up as if you've 30 years in you might not need to make any more contributions & still get a full state pension.
Best to get a pension forecast BEFORE you do anything & then WAIT & see if it makes it in.
It's good news for lots of us if it does, as many of us won't need 39-44 years - just 30 - if you retire after 2010.

seven-day-weekend

Good advice WIRS.

However I personally still have to pay one more year as I reach State Retirement age in Janaury 2010. These changes affect people retiring after April 2010.

My hubby will be Ok though as he already has over 30 qualifying years and doesn't reach SR age until January 2014.:D

mooser_2

Hello everyone, I am a newbie and I hope I am not departing from the thread. We are thinking of investing in an apartment in Spain (buying "off-plan"). The rental return is guaranteed for nine months of the year which is enough to pay the interest on an "Interest Only" Spanish mortgage and have a few thousand euros left over. We plan to keep it for about six years and then sell on. Does anyone know the percentage rate of Capital Gains Tax in Spain? Someone told me the Government were thinking of legislating for a cheaper rate. If we pay it there does that mean we can't be taxed in GB?

siamese0109

Taken from an ex-pats website - the bit about 'underdeclaration' is what is commonly called 'black money' and is paid direct to the builder in cash:

Always a popular subject on the forum and as others have said, there are changes that will apply to transactions after the 1st Jan 2007, according to my solicitor.

The tax rates will be equalized for residents and non-residents at 18%.

This is a rise from 15% for residents and a fall from 35% for non-residents.

The retention, which is the responsibility of the new buyer to pay on behalf of the seller's CGT liability to the Hacienda, will fall from 5% to 3%.

This is the good news.

The bad news is that whereas before, many non-resident sellers were able to pay the 5% retention and then disappear to their home country without paying the balance of tax due, that will no longer be possible, because the law has been changed to give the sellers lawyer a fiscal responsibility to pay the tax on their client's behalf. This means that if your lawyer doesn't pay the tax due by the seller, he can be sued by the Hacienda. If you have seriously underdeclared on your deeds, you can look forward to a hefty tax bill when you come to sell.

There are other implications for underdeclaring as well. If you buy a property with a mortgage, it is the law from 1st Jan that a copy of the bank valuation must be attached to the deeds. In this way, it won't be possible to have a declared amount which is less than your mortgage, because the Notary will be able to see it is a clear case of underdeclaration.

I know these things because my solicitor attended a series of seminars about the law changes a couple of weeks ago.

There are still some areas which are unclear however, for instance, what happens if you sell without a solicitor, who is responsible for paying the CGT? My solicitor says, in the near future, it will be possible for the tax authorities here in Spain to pursue debts from European Union citizens through the international courts.
Also, with regards to underdeclaration, if you buy without a mortgage, you don't need a bank valuation and therefore, it can't be attached to the new deeds. So there are still grey areas, but the authorities are determined to close as many of the loopholes as they can.

seven-day-weekend

I don't know about other areas, but on the Costa del Sol and Costa Blanca areas, this market is flooded out. There are literally THOUSANDS of places waiting to be rented out.

I live in a village inland in the mountains (pop. c. 400) and even here the Spanish are catching onto the holiday rentals market and there are now a couple of dozen apartments even in this tiny village.

I personally wouldn't touch this market with a bargepole. I certainly wouldn't risk my UK house.

If you wish to buy inland and live in the property, or maybe offer a long-term rental, there are still many bargains to be had. But holiday rental on the Costas- no way Jose (no pun intended).

Capital Gains Tax is as mentioned above and it is not going to be so easy to fiddle it as it was in the past.

And I believe that if you have paid it in Spain, then you won't have to pay it in the UK.

droopsnout

The French chambre d'hôte and gîte market is also flooded. You need to have a special position to start a good new business now.

SkyBlue_2

I have enjoyed reading this thread - and have found it most informative.

My partner and I (both early fifties) are planning to move to France within the next year, whilst keeping a small bolt-hole in the UK. I am early retired, and he is hoping to draw his pension in about 12 months time, so money will be limited when we move.

We are hindered at present (if that is the right word ) by our young adult children (four of them between us) who still live at home. They are students and earn very little from their part-time jobs. We are two households, with two houses to sell before we can finance our French home. We can't just throw them out, nor would we want to, but the clock is ticking and we really want to start our new life abroad whilst we are young and vital enough to cope with the changes!

We have enjoyed holidays in France, we love the French way of life and the people and will be looking in the SW to buy a property. I think we'll rent for a while first though, to gauge if we are able to adjust to the French way of doing things....transport, health care, climate, shopping, beaurocracy etc....


I like Blighty....and must admit that I wonder if all this 'living abroad' malarkey as depicted in TV programmes is all it's cracked up to be! Seems just to wonderful to be true.....

However...I believe all things seem better when the sun is shining...so with a few reservations I think I'll be able to break free of my British comfort zone. I am sure all those contemplating a new life in the sun must have some qualms about leaving behind all that is familiar?

Thanks again for this thread.....There is much food for thought.

seven-day-weekend

We also have a penniless adult son still living at home who we didn't want to throw out.

What we did was left him in the family home and he has two lodgers, whose rent helps him pay the bills.

I know this may not be an option (four is not as easy to accommodate as one), also we did not need to sell our English house to buy the Spanish one.

But just something else for you to think about as a possible option. Would it be an option to just sell one house, and have all four of them living together in the other?

Hope you are able to move to France soon. Good luck!

seven-day-weekend

seven-day-weekend wrote: »

Hi there Tracey.

I know several people who have returned, mainly through lack of money.

Many older people come here and live on capital, intending it to last the 10-15 years before they can draw the State Pension. Nearly everyone I know who has done this has run out of money after five years, and have either had to scrat around doing menial jobs for other expats, trade down their house, or go back to the UK (where they can no longer afford to buy a house). So don't fall into that trap!

Getting a job depends where you live, but I would say that you will not get one (other than cleaning houses for other expats) unless you are pretty good in Spanish. So it's good that you are learning it. Don't expect to walk into a job (especially a well-paid one - be prepared to accept minimum wage).

It's also good that your husband will have his pension as this is a guaranteed source of income.

Do your planning. Know what you are going to live on and where it is going to come from. Keep up your State pension contributions in the UK if you are not working in Spain.

Be prepared to mix with your Spanish neighbours and don't grumble that it's not 'like England'. Accept their customs even if you don't agree with them (i.e. don't get into arguments about Franco, bullfighting, bureaucracy or Gibraltar!).

Ideally, keep a place in the UK as a bolt-hole in case it all goes pear-shaped.

I have not known anyone leave because they don't like it, it is usually due to lack of money imho.Do your planning well, and you should be OK.

Good luck!

Actually, I do know some people who have left because they don't like it.

They were a married couple, just come out of the army (25 years) and they couldn't cope with the 'manana' attitude of the Spanish as they had been used to living a very regimented life.

They have now gone to work in the USA.