The basis of taxation in Portugal depends on an individual’s residence status, with Portuguese residents being taxed on their
worldwide income and non-residents on their Portuguese sourced income only. An individual is determined to be resident if:
• They remain in Portugal for more than 183 days during a calendar year, or
• Regardless of the number of days spent in the country, an individual maintains a residence which pertains to be the
individual’s habitual residence as at 31 December.
All members of a family unit are considered resident if either the husband or the wife is resident for tax purposes in Portugal.
However, this condition does not apply if one of the spouses remains less than 183 days in Portugal and proves that their main
economic activities are not linked with the Portuguese territory, as described above. Should this be the case, this individual is
considered non-tax resident in Portugal while the other spouse is considered a Portuguese tax resident. This rule has recently been
introduced into Portuguese tax legislation and, as such, there is no information yet regarding the type of proof needed by the tax
authorities.
Portugal has negotiated over 52 double taxation treaties.
full details on http://www.ailo.org/common/externalPage.asp?intURL=/publications/default.asp&extURL=/downloads/Portugal_2009.pdf
Saturday, 23 January 2010
QROPS ADVICE: Taxation of Expatriates Living in Spain
Expatriates living in Spain will be classified as either resident or non-resident. An individual is considered resident if:
They spend more than 183 days in Spanish territory in a calendar year or,
Their principal place of business, professional or economic interest is based in Spain or,
Their spouse and/or dependent children are habitually resident in a Spanish territory (unless the individual is separated from
their family, or can prove tax residence elsewhere)
In Spain there is no concept of a part tax-year. An individual will be considered to be resident or non-resident for the whole tax year according to the above rules and taxed accordingly.
Income tax is raised in two parts: the majority is raised by the central government, with a smaller percentage being raised at a regional level by the ‘Autonomous Community’ in which the individual is living. The ‘Autonomous Communities’ also control inheritance/gift tax rates. If the ‘Autonomous Community’ does not establish its own tax scales then a default tax scale is applied.
Income generated from employment for services rendered in a foreign country is tax exempt up to a limit of €60,100 (2009),provided that the work is performed for a company or entity non-resident in Spain, or for a permanent establishment located in a foreign country and provided that a tax similar to the Spanish Personal Income Tax is applied in the territory where the work is performed. In addition, the territory must not be considered a ‘tax haven’ by the Spanish tax authorities. At present, the UK Dependent Territories of the Channel Islands and the Isle of Man, as well as the UAE, Hong Kong and Singapore, are all included on a ‘blacklist’ of tax havens maintained by the Spanish Tax Authorities.
full details at http://www.ailo.org/common/externalPage.asp?intURL=/publications/default.asp&extURL=/downloads/Spain_2009.pdf
They spend more than 183 days in Spanish territory in a calendar year or,
Their principal place of business, professional or economic interest is based in Spain or,
Their spouse and/or dependent children are habitually resident in a Spanish territory (unless the individual is separated from
their family, or can prove tax residence elsewhere)
In Spain there is no concept of a part tax-year. An individual will be considered to be resident or non-resident for the whole tax year according to the above rules and taxed accordingly.
Income tax is raised in two parts: the majority is raised by the central government, with a smaller percentage being raised at a regional level by the ‘Autonomous Community’ in which the individual is living. The ‘Autonomous Communities’ also control inheritance/gift tax rates. If the ‘Autonomous Community’ does not establish its own tax scales then a default tax scale is applied.
Income generated from employment for services rendered in a foreign country is tax exempt up to a limit of €60,100 (2009),provided that the work is performed for a company or entity non-resident in Spain, or for a permanent establishment located in a foreign country and provided that a tax similar to the Spanish Personal Income Tax is applied in the territory where the work is performed. In addition, the territory must not be considered a ‘tax haven’ by the Spanish tax authorities. At present, the UK Dependent Territories of the Channel Islands and the Isle of Man, as well as the UAE, Hong Kong and Singapore, are all included on a ‘blacklist’ of tax havens maintained by the Spanish Tax Authorities.
full details at http://www.ailo.org/common/externalPage.asp?intURL=/publications/default.asp&extURL=/downloads/Spain_2009.pdf
QROPS ADVICE: Investment News: Low volatility signals end to credit crunch
Equity volatility has fallen to a 27-month low. The much-watched Chicago Board Options Exchange's VIX index dipped below 18 per cent this week, its lowest level since October 2007. A year ago, it was over 42 per cent.
This is a sign that investors are less fearful of big falls in share prices. One interpretation of these numbers is that the probability traders attach to the S&P 500 falling 5 per cent or more in the next month has halved, from 34 per cent last January to 17 per cent now.
It could also be a sign that investors have become worryingly complacent. Since the credit crunch began in August 2007, there's been a strong correlation (0.54) between the VIX index and subsequent six-monthly changes in the All-share index, with a low VIX leading to bad returns and a high VIX to good ones. If this relationship continues to hold, there's a four-fifths chance of the market falling between now and July.
But the link between the VIX and subsequent returns changes over time. In bear markets, a particular level of the VIX leads to bad returns, but in bull markets it leads to good ones. It could be, therefore, that the low VIX signals not that investors are over-confident, but that the trade-off between volatility and subsequent returns has improved.
One reason to believe this is that the economy is recovering, a fact w hich is usually accompanied by lower volatility. Economists expect figures later this month to show that the UK joined other economies by pulling out of recession in the fourth quarter, whilst analysts expect UK companies' earnings per share to grow by 27.5 per cent this year. "It's far too early in the cycle to dump equities," says Philip Isherwood, equity strategist at Evolution Securities.
Whether the fall in volatility is warranted or not, it's having a beneficial effect - it's led to a spate of bond issues, of which Manchester United's is one of the most prominent.
The connection here is that lower equity volatility is a sign that investors believe the chance of disaster has declined. This means the chances of firms defaulting on their debt have fallen, and so investors have become happier to buy corporate bonds; there has for years been a huge correlation between equity volatility and credit spreads. In this sense, lower volatility is helping to end the credit crunch.
by: Chris Dillow
This is a sign that investors are less fearful of big falls in share prices. One interpretation of these numbers is that the probability traders attach to the S&P 500 falling 5 per cent or more in the next month has halved, from 34 per cent last January to 17 per cent now.
It could also be a sign that investors have become worryingly complacent. Since the credit crunch began in August 2007, there's been a strong correlation (0.54) between the VIX index and subsequent six-monthly changes in the All-share index, with a low VIX leading to bad returns and a high VIX to good ones. If this relationship continues to hold, there's a four-fifths chance of the market falling between now and July.
But the link between the VIX and subsequent returns changes over time. In bear markets, a particular level of the VIX leads to bad returns, but in bull markets it leads to good ones. It could be, therefore, that the low VIX signals not that investors are over-confident, but that the trade-off between volatility and subsequent returns has improved.
One reason to believe this is that the economy is recovering, a fact w hich is usually accompanied by lower volatility. Economists expect figures later this month to show that the UK joined other economies by pulling out of recession in the fourth quarter, whilst analysts expect UK companies' earnings per share to grow by 27.5 per cent this year. "It's far too early in the cycle to dump equities," says Philip Isherwood, equity strategist at Evolution Securities.
Whether the fall in volatility is warranted or not, it's having a beneficial effect - it's led to a spate of bond issues, of which Manchester United's is one of the most prominent.
The connection here is that lower equity volatility is a sign that investors believe the chance of disaster has declined. This means the chances of firms defaulting on their debt have fallen, and so investors have become happier to buy corporate bonds; there has for years been a huge correlation between equity volatility and credit spreads. In this sense, lower volatility is helping to end the credit crunch.
by: Chris Dillow
QROPS Advice: Investment News: STANDING ON THE SHOULDERS OF GIANTS
Although BRIC (Brazil, Russia, India, China) funds have been in vogue over the past few years, Ashburton prefers to focus on what it describes as 'the two giants' and their growth prospects with its Chindia Fund - launched in December 2006.
"These two investment areas complement each other because there is little competition between China and India," says Jonathan Scheissl, fund manager of the Ashburton Chindia Equity Fund. "India is predominantly a service economy while China is focused on manufacturing."
And, while the Chinese economy is more advanced than that of India, the Indian stock market is much older and more effective at capturing the growth of its underlying economy. MSCI China, by contrast, does not yet capture a lot of the underlying growth in this economy.
The International Monetary Fund (IMF) estimates that Chinese gross domestic profit (GDP) will grow 9 per cent in 2010, while India is projected to grow 6.4 per cent. Brazil is set to grow 3.5 per cent and Russia should grow 1.5 per cent.
Mr Schiessl points to the fact that while over the past 10 years the MSCI World Index has not delivered much growth, MSCI Asia ex-Japan is up around 100 per cent.
Strong growth areas in China not captured by MSCI China include infrastructure, fixed assets and consumption. But Mr Schiessl says this is set to change, for example, consumer-facing companies such as department stores can now list at a premium, which should encourage more of them to do this.
He adds that funds can already get better exposure to underlying Chinese GDP growth, for example, by purchasing Hong Kong-listed Chinese companies which better represent the domestic market. These accounted for 46 per cent of Ashburton Chindia's assets at the end of November.
by: Leonora Walters
"These two investment areas complement each other because there is little competition between China and India," says Jonathan Scheissl, fund manager of the Ashburton Chindia Equity Fund. "India is predominantly a service economy while China is focused on manufacturing."
And, while the Chinese economy is more advanced than that of India, the Indian stock market is much older and more effective at capturing the growth of its underlying economy. MSCI China, by contrast, does not yet capture a lot of the underlying growth in this economy.
The International Monetary Fund (IMF) estimates that Chinese gross domestic profit (GDP) will grow 9 per cent in 2010, while India is projected to grow 6.4 per cent. Brazil is set to grow 3.5 per cent and Russia should grow 1.5 per cent.
Mr Schiessl points to the fact that while over the past 10 years the MSCI World Index has not delivered much growth, MSCI Asia ex-Japan is up around 100 per cent.
Strong growth areas in China not captured by MSCI China include infrastructure, fixed assets and consumption. But Mr Schiessl says this is set to change, for example, consumer-facing companies such as department stores can now list at a premium, which should encourage more of them to do this.
He adds that funds can already get better exposure to underlying Chinese GDP growth, for example, by purchasing Hong Kong-listed Chinese companies which better represent the domestic market. These accounted for 46 per cent of Ashburton Chindia's assets at the end of November.
by: Leonora Walters
QROPS Advice: Investment News: SMALL IS STILL BEAUTIFUL
As the equity markets rebounded sharply last year, savvy investors piled into that area of the market that had been hardest hit during the sell-off - smaller companies. Consequently, as risk aversion began to recede, smaller companies outperformed all other sectors of the market, returning their best one year performance since 1977 according to the latest research by London School of Economics professors Elroy Dimson and Paul Marsh.
The pair are responsible for creating the RBS Hoare Govett Smaller Companies index (HGSC), which covers the bottom 10 per cent by value of the UK stock market. The index has now been extended back to 1955 and also boasts various derivations - such as the HG1000, the smallest 1,000 stocks, and the HSGC plus Aim (Alternative Investment Market).
The absolute performance of the HGSC during 2009 saw a positive return of 54.2 per cent, better than all but five of the previous 54 years and beating the All-Share by 30 per cent. Even more impressive was the performance of the HG1000, which recorded growth of 60.5 per cent. This shows that the most significant outperformance during the year came from the lowest end of the market, indeed the FTSE Small Cap and Fledgling indices both outperformed the HGSC over 2009.
Fallen Angels rise from the ashes
What was notable was the strong rebound recorded by so-called fallen angels - those companies whose shares tumbled into the lower reaches of the equity market after a sustained period of poor performance. The HGSC started the year with 43 fallen angels, comprising 20 per cent of the index, and they produced total returns of 77 per cent. Compare this with the stocks that graduated upwards from the HGSC in the previous year, which added 19 per cent.
Further findings show that growth companies outperformed value stocks during 2009 and that a previously successful momentum trading strategy completely broke down during 2009. The 12/1/1 strategy, which involves ranking companies performance over 12 months, waiting one month then buying and holding for one month, would have resulted in an annual return of 24 per cent for those companies with the best performance. But buying a 'loser' portfolio, based on the worst-performing stocks, would have produced a 152 per cent return.
by: Graeme Davies
The pair are responsible for creating the RBS Hoare Govett Smaller Companies index (HGSC), which covers the bottom 10 per cent by value of the UK stock market. The index has now been extended back to 1955 and also boasts various derivations - such as the HG1000, the smallest 1,000 stocks, and the HSGC plus Aim (Alternative Investment Market).
The absolute performance of the HGSC during 2009 saw a positive return of 54.2 per cent, better than all but five of the previous 54 years and beating the All-Share by 30 per cent. Even more impressive was the performance of the HG1000, which recorded growth of 60.5 per cent. This shows that the most significant outperformance during the year came from the lowest end of the market, indeed the FTSE Small Cap and Fledgling indices both outperformed the HGSC over 2009.
Fallen Angels rise from the ashes
What was notable was the strong rebound recorded by so-called fallen angels - those companies whose shares tumbled into the lower reaches of the equity market after a sustained period of poor performance. The HGSC started the year with 43 fallen angels, comprising 20 per cent of the index, and they produced total returns of 77 per cent. Compare this with the stocks that graduated upwards from the HGSC in the previous year, which added 19 per cent.
Further findings show that growth companies outperformed value stocks during 2009 and that a previously successful momentum trading strategy completely broke down during 2009. The 12/1/1 strategy, which involves ranking companies performance over 12 months, waiting one month then buying and holding for one month, would have resulted in an annual return of 24 per cent for those companies with the best performance. But buying a 'loser' portfolio, based on the worst-performing stocks, would have produced a 152 per cent return.
by: Graeme Davies
QROPS Advice: Investment News: Profit From Inflation
Imagine a world where the price of pretty much everything is going up the whole time – and fast. Whether it's a loaf of bread, a pint of beer, the gas bill or dental work, the cost is surging by double-digit amounts each year. At the same time, though, your wages and the interest you get on your savings aren't rising by enough to keep up. The same goes for your house and many of your investments. Welcome to inflationary Britain.
To anyone who lived through the 1970s, this scenario will be all too familiar. During that decade, the price of many things got completely out of control. Aside from making everyday life more uncertain – especially for pensioners and others surviving on fixed incomes – it was a disastrous time for investors. And there are growing fears we could be doomed to repeat that miserable era before too long.
As of early 2010, Britain is only just crawling out of its longest recession on record. Despite the weakness of the economy, inflation in Britain is above where it is in other developed economies. In fact, the governor of the Bank of England may soon be obliged to write a letter to the chancellor explaining why inflation is more than 1 per cent above its target level. Even before the credit crisis – when the economy was growing steadily – inflation seemed more under control than this.
By:Dominic Picarda
To anyone who lived through the 1970s, this scenario will be all too familiar. During that decade, the price of many things got completely out of control. Aside from making everyday life more uncertain – especially for pensioners and others surviving on fixed incomes – it was a disastrous time for investors. And there are growing fears we could be doomed to repeat that miserable era before too long.
As of early 2010, Britain is only just crawling out of its longest recession on record. Despite the weakness of the economy, inflation in Britain is above where it is in other developed economies. In fact, the governor of the Bank of England may soon be obliged to write a letter to the chancellor explaining why inflation is more than 1 per cent above its target level. Even before the credit crisis – when the economy was growing steadily – inflation seemed more under control than this.
By:Dominic Picarda
QROPS ADVICE: Investment News: British Land enters buy-to-let market
The UK's second-largest property company is backing a new buy-to-let property fund for wealthy investors - but should you? Spun out of the law firm Charles Russell, the CR Property Fund plans to raise £300m, and will be managed by British Land (which will also invest up to £6m in its coffers). Launched last Thursday, with modest gearing it will be able to acquire between 450-500 London properties.
It is planned that two-thirds of the fund will comprise flats between £300,000 and £800,000 in areas such as Fulham and Battersea. The top slice will be prime central London homes of up to £5m in value. The closed-ended Guernsey fund has a lifespan of between five and nine years (depending on market conditions) and an ambitious gross target return of 14.5 per cent a year (the majority is expected to come from capital appreciation rather than rental yield). It will pay a 2 per cent annual dividend to investors, who must stump up a minimum £100,000.
The London buy-to-let market is a great place to be - if you can afford to get in. The rising property market means that last year the average UK amateur landlord enjoyed a 7.6 per cent annual return on th eir investment, according to figures released last week from LSL Property Services. In London, where property prices are now back to 2007 levels in some areas, performance has been even stronger, despite a cooling off in the corporate rental market.
CR Property Fund is not the first to target central London properties - we have previously written about uninspiring attempts by Candy & Candy and the London Central Residential Recovery Fund to bring products to market. However, British Land's involvement could give this fund real credibility - especially when one considers that up to 80 per cent of its investors are expected to hail from outside the UK.
By: Claer Barrett
It is planned that two-thirds of the fund will comprise flats between £300,000 and £800,000 in areas such as Fulham and Battersea. The top slice will be prime central London homes of up to £5m in value. The closed-ended Guernsey fund has a lifespan of between five and nine years (depending on market conditions) and an ambitious gross target return of 14.5 per cent a year (the majority is expected to come from capital appreciation rather than rental yield). It will pay a 2 per cent annual dividend to investors, who must stump up a minimum £100,000.
The London buy-to-let market is a great place to be - if you can afford to get in. The rising property market means that last year the average UK amateur landlord enjoyed a 7.6 per cent annual return on th eir investment, according to figures released last week from LSL Property Services. In London, where property prices are now back to 2007 levels in some areas, performance has been even stronger, despite a cooling off in the corporate rental market.
CR Property Fund is not the first to target central London properties - we have previously written about uninspiring attempts by Candy & Candy and the London Central Residential Recovery Fund to bring products to market. However, British Land's involvement could give this fund real credibility - especially when one considers that up to 80 per cent of its investors are expected to hail from outside the UK.
By: Claer Barrett
Subscribe to:
Posts (Atom)
Posts
