Home » Expat Focus Financial Update May 2024

Expat Focus Financial Update May 2024

Expats’ Pensions Affected By Serious Fraud

The Times reported in late April on a fraud that may affect £2.37 billion worth of pensions held by 10,000 British expats. An investigation by the Sunday Times has revealed that executives at financial advice firm Brite may have transferred millions of pounds from expat pensions to their own bank accounts. Alarm bells started sounding in the Australian press back in the autumn, when failure to lodge financial statements or an auditors’ report for 2022 caused the Australian Federal Court to wind up the activities of Brite Advisors Pty Ltd. Investigators from McGrath Nichol identified a discrepancy of US$69 million between accountants’ reports and what investors had been told: whilst the company reported holdings of US$682 million ($1 billion), McGrath Nichol were only able to identify $612.9 million ($937.8 million).

But this does not just affect Australia. Brite, founded by British entrepreneur and investor Mark Donnelly, operates across the world, including the UK, the USA and Hong Kong. Its licence in South Africa was restored in September 2023 after a penalty imposed on the company for soliciting South Africans to invest in unapproved offshore funds. These were promoted by a company known as deVere SA Acuma. Previously this company was known as deVere Investments SA and was accused of losing large amounts of expats’ money by persuading people to move pensions from well-regulated providers into ones that were, quite simply, not. Now they have surfaced once more, in connection with Brite.

New Landlord Loan from RAW

RAW finance are bringing in new landlord mortgages available to expats and foreign nationals who want to invest in by to let properties in the UK. It’s based in the Channel Islands and currently organises lending via brokers across the world, from Hong Kong to Singapore and Nigeria. RAW are intending to bring their mortgage investment fund up to £1bn in the next few years.

The new mortgages are based on a one-year 6.99% fixed rate (up to 65% loan to value) and are available for up to £8.5m to a single borrower. After the year is up, the loan will revert to the firm’s standard rates (4.25% over bank base rates for foreign nationals and 2.99% over base rates for UK expats).

MD Ben Nichols told the financial press that:

“Our specialism in working with brokers that have international clients – a group that often struggles to find support from other BTL lenders – certainly sets us apart. Combined with that expertise, the availability of £100m in capital and a willingness to lend, we’re confident that the RAW Mortgage Fund will continue to gain traction in the months to come.”  

End to Spain’s ‘Golden Visa’

Spanish PM Pedro Sanchez confirmed in April that Spain’s golden visa will definitely be scrapped. This is a blow to British expats who have been planning to take advantage of the scheme, which allows non-EU nationals to work and live in Spain for three years if they can invest €500K in (non-mortgaged) property.  This is in part a response to pressure from the EU to limit ‘golden visas’.

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Sanchez told the press that the move is to free up housing for the locals, remarking that:

“Today, 94 out of every 100 such visas are linked to real estate investment… in major cities like Barcelona, Madrid, Malaga, Alicante, Valencia or Palma de Mallorca that are facing a highly stressed market and where it’s almost impossible to find decent housing for those who already live, work and pay their taxes there.”

Expats and estate agents have reacted with disappointment to the news, with agency Hamptons International telling the Daily Mail that:

“It’s like a bomb went off this morning. It’s going to be a big issue for expats wanting to move and a lot of people are very unhappy about it. What’s being done isn’t hugely different from other European countries, but it’s not a positive message.”

Property experts now counsel that if you want to live in Spain, you’ll need to apply for actual residency, which will have a knock-on affect on your tax status.

New Study Looks at Income of Expats in Spain

A new study by the Autonomous University of Barcelona has released findings relating to the wealth of local expats. Dismantling the cliché that Brits in Spain are all wealthy, the study discovered that 30% of British, European and Americans respondents earned the same or less than the average monthly wage, and 70% earned more. Respondents tended to be highly qualified expats working in the sciences, tech, the public sector, education and health.

China’s ‘Small Change’ Wallets

In Dalian province in China, banks have issued over 100,000 wallets containing small change, in an effort to make small transactions easier for foreigners in this digital age.  Many people use phone payments, but some visitors do not and may find it difficult to use a bank card, for instance, in taxis, and the wallets, which contain small-denomination notes between 1 and 20 yuan up to US$40 (or tailored amounts) are issued to facilitate transactions when visitors first come into the country. Dalian is a busy city and an entry port for many events, such as the upcoming ‘summer Davos’ and the 2024 International School Sport Federation Football World Cup; with a high influx of visitors from overseas, local banks say that they want to make payment options as flexible as possible.

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