Foreign Perspectives

Archive for the ‘Business’ Category

Although not too many people are doing it at the moment, this is probably one of the best times to consider buying an overseas property as prices are generally rather more depressed than they normally would be. Having said that there are lots more people selling or at least trying to these days which in itself brings up similar issues.

For a start there’s the different legal system to consider. Even if you’re European and buying or selling in another European country you can still find that, although illegal, the local authorities will retain some of the proceeds of a sale in case it turns out that you owe them any taxes. It’s worth pointing out to the legal person dealing with your sale that they are legally required to treat you as though you were a national of the country and that applied even if you fully intend to take the proceeds abroad afterwards so long as it’s to another European country.

Obviously with a property investment you can be talking in terms of quite substantial amounts of money and if you’re going to be changing currencies then it’s worthwhile looking into your options to reduce the costs of exchanging the money to the other currency and also of reducing the risk to you of there being a substantial move in the exchange rate. For example, this year the pound/euro rate has moved from around 1.10 to around 1.20. Ten cents doesn’t sound like much but if you’re looking at a typical property of around the EUR 300,000 mark that’s EUR 30,000 of a difference which is enough to cover legal fees with change or think of it as the swimming pool that you quite fancied.

How do you reduce these charges and risk? If you go to your bank as most people do you are likely to be hit with the maximum charge possible although the charge can be even higher if you just use the local legal people to send you the proceeds as they’ll add charges on top of that. The best way is to go to one of the specialist money brokers who can shave 5% or more off the charges that the banks apply and can also arrange to fix the rate you’ll get months in advance which eliminates the uncertainty in the amount that you will ultimately receive. Aside from the charges from the rate fix, there are no downsides as if the exchange rate moves in your favour you can let the fix lapse and exchange the money at the current rate.

On non-financial matters don’t neglect the time delays inherent in overseas moves generally. Not only does the money take longer to arrive (unless you just take it as a suitcase full of cash which is quite legal though may raise a few eyebrows), but it’s obviously going to take longer for the removal truck to move your stuff from A to B. There aren’t any formalities required in moving your own stuff around Europe although expect checks for illegal immigrants at the ports and be sure that the lorry doors are secured with a padlock (most aren’t) to avoid a few questions along the lines of the “have you packed the case yourself” familiar to air travellers.

It’s best to plan the move more carefully than you would for a normal domestic move as you’ll appreciate from the above that there are a lot more places that complications can arise.

When people think of moving to France their first thought as to how to generate an income is to buy a gite complex and rent it out to people from back home.

It sounds like an idyllic lifestyle, doesn’t it? You work one day a week and the rest of the week you can be sunbathing by the pool.

The snag is that you need to wash all the sheets and towels and carry out maintenance work during the week. OK, so two days work and five at the pool? In theory, you might get away with that though, of course, the guests will be using the pool too and, usually, expect you to do things for them like organise tours or the area, tell them all the best places to go and so on.

What’s frequently forgotten about in all this is the financials that go along with this lifestyle. From a typical six or seven person gite you can probably get around 700€ a week in the peak season. That size of gite equates to a small three bedroom house in size and, of course, amount of work to look after. In reality most people aim for a gite complex of around four or five gites. On the whole, you’ll eventually reach an occupancy of around ten weeks per year for the gites which translates into around 35,000€ a year of an income.

However, there’s the matter of expenses to consider. Bearing in mind that you only have four or five hours to reset the gite between guests you’ll end up hiring a cleaner to help you which eats into the income somewhat and you may need someone to look after the pool. There’s also the business of maintenance: unlike a normal house rental you’re getting a new set of tenants virtually every week and that tends to be quite hard on the furnishings so you’ll need to renew at least some items pretty much every year.

Oh, and don’t forget the taxes!

So much went wrong in this particular case that it’s hard to know where to even start.

The social services have an awful lot to answer for in this one. For a start, although they didn’t directly kill Peter clearly their inept actions contributed to his death, one wonders whether a number of those involved shouldn’t be residing in jail somewhere at the moment? No, it won’t bring Peter back but it would send the strongest message to the social services people everywhere that the key social service that they should be providing isn’t money, it’s the protection of life. Disciplinary action is all very well but some jail time meted out is a much stronger message and one that seems more appropriate in this instance.

Related to this seems to be their inbuilt bias in favour of the underpriviliged. I don’t dispute that the social services generally are needed to support those on hard times, but their “keep the mother with the child” regardless of circumstances approach obviously didn’t work too well in this case. I’d also question their bias in favour of mothers too. We’d not have heard anything about Peter had his father been able to keep him and that’s how I’m sure we’d all have wished it to be. It’s definitely better for a child to be with a parent rather than being in care but that parent shouldn’t always have to be the mother as seems to be the case now.

Crazy as it seems, this attitude is what probably led to the doctor giving the killers the benefit of the doubt and thereby missing the injuries. That benefit of the doubt isn’t given to normal families as I found out when accused by a midwife of abusing my own son and frankly we felt at some risk of having him taken into care despite 1) him having no injuries and 2) the supposed abuse being merely a side-effect of him being born breech.

Then there’s the Orwellian handling of the case or rather information about the case as it’s proceeded. The court required all information that would identify the killers to be removed from websites around the world. Frankly the only thing that succeeded in doing was to create a feeling of revisionist history reminiscent of Orwell’s novel and has merely driven public commentary about the case to places like this. Even now, the notorious boyfriend can only be referred to as “the boyfriend” because he’s appealing against his conviction. Well, you would if you were him, wouldn’t you? After all, with the strong feelings that this case has generated his life in jail seems likely to be rather short and with an extremely unpleasant end.

That concealing of information is a major failing of this case. For instance, the government report couldn’t be handed out because it would identify some of the social workers. Let’s not forget that some of these people should be in jail; protecting them in this merely serves to let the authorities off the hook in terms of bringing the appropriate people to court. Thus, we only have the head of the social services section named (Liz Santry who one suspects won’t be a councilor after the next election).

Lot’s of lessons to be learned for sure. Let’s hope that the same mistakes aren’t repeated anytime soon.

Much as we might laugh at the Trabants that East Germany used to turn out as being unreliable and prone to break down, sadly that’s what many blogs seem to look like these days.

Oh, they don’t break down, but the quality of the workmanship that you see in some of the posts is really deplorable. What’s perhaps worse is that a lot of those low quality blogs are taking sponsored posts and if anything the quality of the posts that they get paid for is even worse than the norm for them.

Why do the advertisers put up with it? OK, they might just want the link from the blog but do they really want their product to be associated with shoddy workmanship? After all, the authors of these posts are numbered amongst their suppliers ultimately. Surely they can’t be so uncritical to accept what are often very shoddy posts indeed?

How bad are they? How about “you must visit this site. i think there products are really great. visit this site they have great products.”? I’ve paraphrased the real example so you can’t search for the actual blog entry that was based on (which was worse than that).

Good quality writing doesn’t mean that it can’t be about trashy subjects. Whilst many would call The Sun a trashy paper, every one of their articles is well written. Sure the writing style is laid back but it suits the content just as the relatively dense writing style of The Times suits it’s content and readership.

Just as there’s a range of writing styles in newspapers, so too one would expect there to be a range of writing styles in blogs. That doesn’t mean that the spelling, grammar and repetitiveness of my example is acceptable though because it isn’t and especially so since the advertiser paid $50 for it (quite why they approved payment is beyond me).

I’m not saying that you need perfection from day one but you should at least aim for that.

Since the economy has taken something of a dive there are a lot more people around these days who are overpaying on their taxes, typically this can happen if your income this year is a lot less than last year but there are a variety of other reasons why you can end up with a tax bill that’s lots more than you were expecting.

Sometimes the biggest surprise is in terms of back taxes. Although you’d think that these can’t be much, it’s surprising just how large a bill you can get from this quarter. For instance, often seemingly small omissions can amount to quite serious amounts of cash owed if they’re over a number of years. This tax debt can even reach such levels that you need to look into the options of paying it off in installments which at least could reduce the payments to more manageable amounts.

On the other side of the coin people can also find that there are quite substantial tax reliefs which they’ve not claimed. You might think that if you’ve an accountant that this just can’t happen to you but, in most cases, the accountant doesn’t get out to actually see what you’re getting up to and you could be pleasantly surprised if they’ve completely overlooked an ongoing tax relief. Just as in the case of underpayments, missing out on relatively small amounts of tax relief can add up to a sizeable chunk of cash when counted over a few years.

Whether it’s over or under payments that affect you, it’s best to do something about them rather than taking the head in the sand approach that many people adopt when thinking about taxes.