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Bfe newsletter-march-201803

REASONS YOU NEED A FINANCIAL ADVISER IN EUROPE<br>

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Bfe newsletter-march-201803

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  1. MARCH 2018 FINANCIAL EDUCATION UPCOMING EVENTS 20 MARCH 2018 THE HAGUE The Netherlands 28 MARCH 2018 AMSTERDAM The Netherlands 4 APRIL 2018 THE HAGUE The Netherlands REASONS YOU NEED A FINANCIAL ADVISER IN EUROPE 11 APRIL 2018 FRANKFURT Germany By David Bellingham 9 MAY 2018 EINDHOVEN The Netherlands US management, but unlike other expats face a number of unique challenges, restrictions, reporting requirements and complexities that require careful decision making in how finances are managed. citizens living in Europe face many of the same opportunities and challenges as other expatriates when it comes to financial and investment View All Events Why you need a Financial Advisor in both the U.S. and Europe? The Future of British Expats Living in EU Countries after Brexit What’s new with FATCA regulation laws? Page - 3 Page - 4 Page - 6 www.beaconginancialeducation.org www.beaconfinancialeducation.org

  2. HOW TO FIND A GOOD ONE Ķ Beacon American Advisors has done a lot of the hard work for Americans in Europe. We carefully assess all firms that would like to partner with us to manage the specific and unique needs of Americans. You can be assured that if they are working with us, they have met our stringent criteria to offer you good, unbiased and relevant financial advice. Advice for Americans living in Europe. And we can help them to collaborate with your US adviser to align your complete financial planning needs.  Remember, financial and retirement planning is some of the most important and impacting things you will undertake. But, most people spend more time planning their annual holiday every year than they do on their financial futures. If you invest the same time into your financial future with the experts within the markets you can continue taking holidays for as long as you want! Americans living in Europe actually need two financial guides: one, a US based accredited financial adviser to manage their domestic US based investments including their US pension assets; and two, a Europe based International Financial Adviser with local market expertise and US reporting knowledge to guide them through the complexities of their financial planning and investments in Europe. Ķ You can’t invest in mutual funds in the U.S. while you’re resident overseas. Ķ More and more U.S. banks are closing brokerage houses to U.S. citizens with overseas addresses – will you be next? Ķ The above two point’s mean your money will likely be stuck in cash. In this low interest rate environment your assets will be going backwards by the rate of inflation. Every year. Ķ Many American(s) have a pension in Europe. To get the best returns, you’ll need advice on how to manage it in the future Ķ Transferring money back to the US also requires currency exchange rate consideration. The current strength of the US dollar against the Euro and Pound Stirling means an investor sending money back to the US is not getting a good deal. Active exchange rate management can have a substantial impact, another reason why it can be preferably to invest within Europe. Ķ There are very attractive investment opportunities in Europe however the structures are complex and more limited for Americans. Navigating it properly will produce the return on investment you seek. These complexities are typically not widely known to U.S. advisers Ķ Finally though, as mentioned above if you don’t have an adviser in the U.S. – then you need one there too! Beacon American Advisors has a large network of US based domestic financial advisers but we do not recommend using a US based adviser for your international needs. This is why: Ķ A US adviser doesn’t necessarily understand the investment challenges & opportunities, or the tax implications of investments in Europe. They are US domestic market experts- great for your US assets and for when you return home. You need a professional in the European market, who knows the market. Ķ A US adviser can’t legally advise you from overseas, they can only give you the advice when you’re in the U.S. This is vital. You need to make sure the advice you receive is from someone that is licensed and accredited in that market. If you would like to learn more or to find an advisor, please contact Beacon American Advisors and we can point you in the right direction, both at home and abroad. Some Americans simply transfer funds back to the US as their investment and financial planning strategy. We believe there are better options and that this is not necessarily the best option for the following reasons: service@beaconamericanadvisors.com www.BeaconAmericanAdvisors.com 2 March 2018 www.beaconfinancialeducation.org

  3. WHY YOU NEED A FINANCIAL ADVISOR IN BOTH THE U.S. AND EUROPE? By Robert Rigby-Hall If Today’s economy is complex and uncertain and Americans say they need more guidance. Use of financial advisors has increased significantly in the last five years with people hiring them for better guidance, especially for long-term goals, such as retirement. you need to put your financial house in order but haven’t taken all of the steps yet, you’re not alone! 58% of Americans believe their planning needs improvement, furthermore, 34% of us have not begun to plan for our futures. Research has attempted to quantify the value that financial advisors can provide - they help individuals generate approximately 1.82% excess return each year, creating approximately 29% higher retirement income wealth. If an advisor is charging a 1% fee per year for the management of your assets, the financial advice has significant positive impact generating additional long-term income. There are many qualified advisors, however, some may be better trained and suited for your unique international needs.  Key things to consider: Ĺ Does your advisor understand the investment challenges, opportunities and tax implications of investing in both Europe & the U.S.? Ĺ Are you getting “joined up thinking” on your investments and retirement assets in both Europe and the U.S.? Can your U.S. advisor help manage your European investments and retirement assets if you leave Europe? Ĺ Who is helping you transfer money cost effectively between countries? Ĺ Does your advisor understand that you can’t invest in U.S. mutual funds while you’re a resident overseas? Ĺ If you would like to learn more or to find an advisor, please join us at a Beacon Financial Education seminar by clickinghere. Better still request afree consultation. Survey data from Northwestern Mutual, Certified Financial Planners, IRi, Society of Actuaries, Morninstar, and HSBC. 3 March 2018 www.beaconfinancialeducation.org

  4. THE FUTURE OF BRITISH EXPATS LIVING IN EU COUNTRIES AFTER BREXIT By Beacon Financial Education The the UK from the EU, known as Brexit, remains a cause for concern for British expats in the EU.  Even with agreements between the EU and the Prime Minister of Britain, Theresa May, there is still cause for concern. British expatriates are still unclear about how their lives will be affected by Britain’s exit. British electorate voted to leave the European Union in 2016. The departure of expatriates in a similar manner that EU expatriates will be treated in Britain. If Theresa May can guarantee that EU expats in Britain will continue to enjoy their rights as before, it could also mark the same for the British expats. In December, May wrote a letter to British expatriates in which she sounded delighted. The delight came from the fact that her government and the EU reached an agreement in which British expats would be treated well in EU and vice-versa. Mrs. May has tried to appease her country by making clear her first priority is to protect the rights of British expats in the EU and vice versa. Although not completely substantive, this should give Brits expats some bit of hope. The Withdrawal Agreement guarantees British expatriates rights in the EU. They will be treated as residents and they will continue to enjoy the benefits that they enjoyed before. These rights include pension The EU is mainly worried about the welfare of its expatriates in Britain. It is likely to treat British 4 March 2018 www.beaconfinancialeducation.org

  5. and healthcare rights. It was further agreed that even when the UK has left the EU, British expatriates can still be visited by: The future and the On-going Negotiations z Spouses The ongoing negotiations will depend on what the British will offer the EU. During the first phase of negotiations, some of the EU members believed that Britain was offering less than what it wanted to be offered in return. The EU negotiators are likely going to continue with the same stance. They will only give British expatriates a better deal if they feel they are being treated fairly and squarely as well. However, the future looks promising after May mentioned that further negotiations will continue to be carried out in a way that will benefit both sides. She further believes that the final agreement will reflect a good relationship between the UK and the EU. If this happens, there is hope that British expats will continue to enjoy the benefits they enjoyed before. z Civil partners z Grandparents z Unmarried partners z Children z Dependent parents z Children that were not born or adopted in the UK any day later than 3 / 29 / 2019 Unsolved Issues Although there was great progress made during the negotiations, there are still some few areas of concern that have not been finalized. These are very worrisome because the EU did not show interest in discussing them during Withdrawal Agreement. British expats the same rights as before. This could be a big bone of contention as the free movement of British from one EU state is controversial. If they are restricted to continue enjoying the movement benefits that they had before, it could force them to make some big changes and adjustments. They would have to weigh what they would set to lose by leaving and what they what they would gain by settling in a new Euro Zone. the One such issue is what happens when British expatriates move from one EU member state to another. The refusal of the EU to discuss this matter shows they may take a hard line on granting 5 March 2018 www.beaconfinancialeducation.org

  6. WHAT’S NEW WITH FATCA REGULATION LAWS? The to identify foreign assets of U.S. citizens either living at home or abroad. The main driver of the law was to take action against tax evasion. The law requires that foreign banks must detect U.S. citizens and report their assets and transactions to the Internal Revenue Service. However, the law is believed to be controversial because of several reasons. Firstly, foreign banks have been threatened with a 30% penalty on their transactions that take place in Foreign Account Tax Compliance Act (FACTA) is a U.S. law enacted in 2010. Its purpose is the U.S. Secondly, the U.S. itself has not kept its end of the bargain in the FATCA agreement with foreign entities. The law is to be used as a way to raise funds. The law did not come into effect immediately. It has done so gradually. The delay has been primarily due to its complexity and probably a large number of stakeholders involved. There have been several delays which have affected the law. The IRS has been active in providing the direction over implementation of FATCA. More regulations were added to the law by the IRS in December 2016. CHANGES AND ADDITIONS TO THE FATCA LAW Gross proceeds reporting A new law is commonly amended with time due to a number of reasons. The FATCA law is no exception. FATCA has been amended several times since it was enacted in 2010. In this article, we take a look at some of the changes and additions to the law. Agreements with foreign governments and entities requirements. The guidelines also need to identify how the exempted residents will be treated under the law. Ĺ Determine the criteria which would be used to document or report account values of U.S. citizens in a foreign land. Ĺ Assist U.S. tax payers with information about the FATCA law. Ĺ Extension of FATCA deadlines. Sponsored entities The FATCA law was amended to address gross proceeds and their payment. Any person selling property that can result in the U.S. receiving some income has to pay a portion of the gross proceeds. The new amendment was set to be effective starting from January 1, 2017. Due to a delay by IRS, the new amendment will only take effect starting from January 1, 2019. FATCA has seen the United States signing contractual agreements with at least 113 countries. These agreements stipulate that companies operating in those countries must report FATCA information to the U.S. government. The signed agreements are known as Intergovernmental agreements (IGA). The role of IGAs is to: Ĺ Design and implement a set of principles and guidelines that exempts some residents from FATCA Under the FATCA law, a sponsored entity is one that carries out FATCA duties on behalf of another. If FATCA was a tax law, sponsored entities would be tax preparers. Sponsored entities are required by law to have their Global Intermediary Identification Number (GIIN) by March 31, 2017. Those who do not comply will be levied a 30% penalty by withholding agents. This is how some terms are defined under the FATCA law Ĺ Gross proceeds– an amount one receives after selling or disposing of properties. Ĺ Property – it is a property that earns interest or dividends which the U.S. can benefit from. 6 March 2018 www.beaconfinancialeducation.org

  7. MORE DEVELOPMENTS ON WITH HOLDING TAX As additional amendment was issued in order to address the issue of limitation-on-benefits (LOB). A LOB is used by entities to make lower withholding payments. Withholding agents are required to have their LOB document ready when they pick up their new withholding certificates in 2018. A FINAL NOTE ON FATCA AND TAX EVASION The last decade has seen the coming together of technology and new tax legislation with the aim of fighting global tax evasion. The FATCA law is a direct method of identifying assets and making it difficult for U.S. citizens to dodge paying their taxes. The U.S. government now relies on the corporation to foreign entities to enforce the new FATCA law. Many people will now be forced to pay tax which they would have otherwise dodged if the FATCA law was not present. The U.S. government’s treasury is expecting to get a substantial amount of money from the implementation of the new law. SPRING SEMINAR SCHEDULE MARCH APRIL WEDNESDAY 14 MARCH 2018 EINDHOVEN The Netherlands WEDNESDAY 4 APRIL 2018 THE HAGUE The Netherlands WEDNESDAY 11 APRIL 2018 FRANKFURT Germany TUESDAY 20 MARCH 2018 THE HAGUE The Netherlands WEDNESDAY 28 MARCH 2018 AMSTERDAM The Netherlands CLICK HERE TO VISIT OUR EVENTS PAGE MAY JUNE WEDNESDAY 9 MAY 2018 EINDHOVEN The Netherlands TUESDAY 15 MAY 2018 AMSTERDAM The Netherlands WEDNESDAY 6 JUNE 2018 THE HAGUE The Netherlands WEDNESDAY 13 JUNE 2018 FRANKFURT Germany 7 March 2018 www.beaconfinancialeducation.org

  8. Beacon Financial Education wants to thank all the wonderful expat friends we have made and the preferred partners who provide excellent service to the ever-growing global mobility community. We are looking forward to developing new seminar programs and speaking more about the importance of financial education. We offer daily posts on topics such as Expat life, American’s living abroad, global mobility, economic news and so much more.  info@beaconfinancialeducation.org www.beaconfinancialeducation.org PLEASE FOLLOW US ON SOCIAL MEDIA Beacon Financial Education does not provide financial, tax or legal advice. None of the information should be considered financial, tax or legal advice. You should consult your financial, tax or legal advisers for information concerning your own specific tax/legal situation.

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