This communication is for informational purposes only and is not intended to constitute, and should not be construed as, investment advice, investment recommendations or investment research. You should seek advice from a professional adviser before embarking on any financial planning activity. Whilst every effort has been made to ensure the information contained in this communication is correct, they are subject to change and we are not responsible for any errors or omissions.
Living in a foreign country like Spain as a UK expat can be an enriching and fun experience. However, it can also bring financial risks – particularly from scammers.
Scammers often target vulnerable people. When you are living in a new culture, surrounded by an unfamiliar people and language, it can be easy to misread the warning signs.
As financial advisers serving UK expats in Murcia, Costa Blanca and Almeria our team at Scottsdale wanted to offer some insights into common scams targeting British people living abroad. Below, you can also find ideas about how to protect yourself.
We hope this content is helpful. If you want to discuss your financial plan with us, please get in touch to arrange a no-obligation financial consultation, at our expense:
+34 966 460 407
Boiler room scams
Have you ever been contacted out of the blue by someone claiming to offer a “rare” or “once-in-a-lifetime” investment opportunity? Were the promised returns “guaranteed” and very high? These are tell-tale signs of an investment scam.
Sometimes, callers operate out of large call centres (boiler rooms) and can be quite sophisticated operations. Indeed, one recent news story told of human remains discovered in a ravine in Mexico. The victims were employees of a call centre that was the front for an illegal call centre which aimed to defraud and extort US tourists.
As a general rule, if you receive an unsolicited call about an investment like this, consider simply hanging up the phone. A professional financial adviser will rarely, if ever, contact someone in this way. Even so, “guaranteed returns” would never be promised. All investments involve an element of risk, and a financial adviser should explain this clearly to you from the outset.
Many UK expats have a lot of wealth tied up in their pensions. This makes them prime targets for scammers. One common tactic is the “pension liberation scam”, where a scammer contacts you and claims that they can help you access your pension savings before age 55.
As a general rule, UK law prohibits an individual from taking pension benefits before age 55. Therefore, if someone claims to know how to do it for you, consider this a red flag.
Pension transfers are another potential area of risk for retirement savers. Sometimes, it is a good idea to move your pension to another scheme upon the advice of a financial adviser. However, if a scammer can trick someone into moving their money into a fraudulent scheme, then it could be lost forever.
One way to protect yourself is to work closely with a regulated financial adviser who has experience helping UK expats with their pension planning. Here at Scottsdale, for instance, we assist British people in Murcia and the surrounding regions and our advisers are regulated by multiple authorities across Europe. We operate under a licence covered by EU “Passporting”.
Tax refund scams
Living abroad can bring extra complexities to an expat’s tax planning. It is important to ensure that you comply with both UK and local tax rules at all times. Otherwise, you could face penalties. In Spain, The Tax Agency is ramping up its crackdown on foreigners presenting incorrect tax returns in 2023. Consider speaking with a financial adviser to ensure that your international tax plan is up to date.
Conversely, British expats can also be vulnerable to fraudsters who contact them – posing as tax authorities and promising substantial tax refunds. In the process, bank details and personal information is requested and, if obtained, can be used for identity theft purposes.
Tax laws are often complicated and subject to change, making it hard for expats to keep track of what is expected of them. Working with an expat financial adviser can help you adapt your tax plan in light of the best available information, avoiding scams in the process.
In many countries, you cannot simply move there to retire as a UK expat. You likely need a special visa. Since Brexit in February 2020, Brits are having to get more used to applying for visas to EU countries – including Spain.
The temptation for some people is to try and find “workarounds” – e.g. “golden visas”, where you buy a property worth over €500,000 (€250,000 in some countries) in exchange for gaining residency.
The risk you run, of course, is getting caught. In May 2022, for instance, the Spanish authorities investigated 4 British nationals who used fraudulent documents to try and stay in the country after Brexit. One person was arrested.
Other expats may simply be ignorant of Spanish visa rules, leaving them vulnerable to visa scammers. Recently, the EU issued a warning to British tourists about fake Etias application websites to try and steal travellers’ personal information.
To protect yourself, make sure you only visit official websites (e.g. .gov in the UK, or europa.eu in the EU) and consider speaking with a professional about the options and processes involved with retiring to a particular country as a British citizen.
Conclusion & invitation
If you are interested in discussing your own financial plan or investment strategy with us, please get in touch to arrange a no-commitment financial consultation at our expense:
+34 966 460 407