‘The Dream …’
When I first came to live in Spain and work as an Independent Financial Adviser, Equity Release Schemes were the ‘all singing, all dancing’ solution to the Spanish Inheritance Tax problem for expats who own a property in Spain. Not only did they in most cases completely erase the tax liability, they also offered retired expats the ability to boost their income by taking equity out of their Spanish property to spend as they wished.
Upon completing my research as an experienced and qualified Adviser and ex financial services trainer, it quickly became apparent to me that these schemes were fine for as long as there were no dips in the stock market along the way, or worse still a ‘worldwide financial crisis’! Having done the number crunching, I could not see the viability of taking retired people from a ‘mortgage free’ and ‘financially secure’ situation to a situation where they were again at the mercy of a lender. I therefore took the decision not to recommend this solution to my clients.
The harsh reality now is that there are many retirees who feel trapped, embarrassed, and unable to talk to their family about this situation. Feeling ashamed, having fallen foul to the aggressive marketing techniques often used to secure this type of business. At Speed Financial Solutions, we take the care of our expat community very seriously and are already working for people who have approached us, unable to sleep well at night for fear of losing everything they have spent their lives working for.
‘What can be done …?’
We have teamed up with a prominent lawyer in Marbella and are working together to put our expats back into a mortgage free position on the following basis:
Civil court action with a view to obtaining a ruling that declares both the mortgage loan agreement and the investment contract, null and void.
The claim is to be based on the allegation that the contracts entered into were tainted with so many defects that, by applying Spanish laws on the matter (financial, banking and consumer laws), would render them void from the very beginning. This includes 2 false concepts deliberately used to sell the products:
1. That by registering a mortgage loan against the property, it would reduce its value for Inheritance Tax purposes.
2. That by investing the proceeds of the loan in a certain way, they would perform well enough to support the cost of the loan (interest, commissions) and leave extra money, for personal use.
Do you find yourself in this position, not knowing which way to turn? Have you spoken to your Financial Adviser and are they helping you find solutions? If you would like a free private consultation please contact us for an appointment, alternatively, every Friday we run a surgery in our office in Coin from 10 am until 1 pm when our Financial Advisers will be available to discuss your own situation.
Andrea Speed Principal 28 June 2012