Be Financially Independent - Everyone looks forward to being financially independent, and it is possible if you refrain from making some common mistakes. There are times when you can look back and see many things you should have done differently. There may have been decisions that were supposed to bring you happiness but ended up causing you grief.
On 29th October, 51 jurisdictions signed a Multilateral Competent Authority Agreement on automatic exchange of information. The first exchange of data will take place by September 2017.
The signing ceremony took place at the Organisation for Economic Cooperation and Development (OECD)’s Global Forum on Transparency and Exchange of Information for Tax Purposes in Berlin. All OECD and G20 endorsed the OECD’s global standard for automatic exchange of information. Most of the major international financial centres also signed.
On 29th September, the UK Chancellor, George Osborne, announced that the UK government is to abolish the 55% pensions lump sum death tax charge for defined contributions pensions. The measure will come into force in April 2015 alongside the pension reforms outlined in the Budget.
The new rules mean that if a person dies over the age of 75 years, beneficiaries will only pay their marginal tax rate on drawdowns from the pension. A lump sum option is likely to be available, subject to tax charge of 45%.
When an individual dies under the age of 75 years they will be able to give their pension pot to any beneficiary tax free, whether if the pension is already in drawdown or not.
Nigel Green, founder and chief executive of deVere Group, which holds FCA authorisation in the UK, said: "We champion the revised Qrops guidelines that insist that a client's tax position and risk appetite, among other factors, are fully assessed; and that schemes that are substantially underfunded will have the right to refuse transfers.
"By only having those who are FCA-licensed deliver advice, it offers an enhanced layer of protection for consumers and it will, inevitably, drive up the quality of advice and push wider industry standards higher."
On the 18th September Scotland will vote on whether to remain part of the UK. The ramifications of the vote could have a significant effect on the value of the pound with some analysts predicting anywhere between a 5% to 15% devaluation if the 'YES' vote win and Scotland leaves the Union.
This has been reinforced in the past few days with implied volatility levels on GBP doubling from 4.5% to over 11%.
For those of you who receive your pensions, whether private or state you could find that the amount you receive each month differs. When you receive your pension directly from the UK to your Euro account the bank will use a spot rate. So if you are living to a budget this can leave you short from month to month and over the year this can add up. What the pension companies don’t offer you is the chance to fix the exchange rate, this can take out the uncertainty of the amount you receive each month.
An article by credit ratings agency Fitch Ratings concludes that Portugal is on track to hit its fiscal targets this year, following the constitutional court's approval of expenditure-related proposals, but warns about potential tax increases in future.
On 14th August 2014, the court said that temporary pay cuts for some public sector workers proposed for this year and next year are constitutionally acceptable, but that they should not be extended beyond 2015. It said a levy on some public sector pensions would be unacceptable.
When choosing to transfer a pension away from the UK into a QROPS one of the key things to consider is which jurisdiction to place your pension.
One the unique benefits of a QROPS is that it does not have to be situated in the place you happen to be living at the time. Rather, transferring your UK pension into a QROPS enables you to choose the jurisdiction that will benefit you most now, in the future and in retirement.
