I hope you all find yourselves in the country you were meant to be in this morning! I write this as Italian airspace has opened up again and stranded tourists are making their way home again, either by plane or by other methods of transport. What a terrible experience that has been for so many people.
Should the Icelandic volcano continue to disrupt life as we know it, you may want to find out more about the train network, and it’s just as well that Trenitalia, the Italian rail operator, opened the Turin-Naples/Salerno high speed train link only last December. And, on paper at least, it looks pretty good: Rome-Turin in 4 hours and 10 minutes (that’s around 670 kilometres, it takes me longer to get to Turin on the normal train network and it’s only 200 km away).
Milan-Naples also takes only 4 hours and 10 minutes. The trains, apparently, are kitted out with ‘comfortable chairs, plugs near every seat which allow you to work on your computer, a “welcome drink” etc’. On arrival in Rome or Milan, first class passengers ‘can make use of the hire car and driver service and hotel reservation service’. The high-speed trains are called Frecciarossa and Frecciargento and you can find out more on www.ferroviedellostato.it.
I promised to keep you all informed of how the replacement of my windows with energy efficient double-glazing was progressing, and – as I feared – the great news about getting a 55% tax rebate on them was just too good to be true. Unfortunately, my commercialista (accountant) explained that because I am self-employed and am part of the ‘regime dei minimi’ tax scheme, I can’t claim back any of the money spent on the windows. Surprise, surprise. Just as well I wasn’t counting on that rebate. The windows are meant to turn up at the end of month and I will let you know if that actually happens or not!
Every language, someone once said, is a universe. I’ve always been fascinated by language and one aspect of language that fascinates me particularly is words that don’t have equivalents in other languages. Such as the word ‘privacy’. There’s no Italian equivalent of the word ‘privacy’ and often Italians resort to using the English word when they wish to refer to that concept. The laws governing data protection are in fact called ‘le leggi sulla privacy’. It doesn’t surprise me that privacy is a foreign concept – just try living in a small town like I do, where everyone knows everything about everyone else. It creates a strong community spirit, but can sometimes feel quite oppressive!
Italians, in contrast, are linguistically coy when it comes to talking about death. I could write a book just on the subject of death in Italy and maybe one day I’ll fill you in on this newsletter! They seem much more sanguine about the whole process of death – long wakes over open coffins, pictures of the deceased on tombs etc – but when it comes to talking about death, Italians find all sorts of ways of avoiding the actual word. For example, newspapers will more often say that someone has scomparso or ‘disappeared’. For years, I couldn’t work out how it was that so many famous people were disappearing, how they’d disappeared and if they had ever been found again…
This month we’re tackling the thorny subject of employment in Italy. If you’re planning to move over to Italy for any length of time, finding work may be a priority. I hope our advice proves useful.
Employment has always been a thorny issue in Italy. According to the national statistics agency Istat, unemployment in 2009 rose to 7.8%. It is currently running at 8.5%, the worst level since 2004 (though lower than the European Union average of 10%). Unemployment rates are highest among the young (15-24 years of age) and are now running at 26.2%. Average income is among the lowest in Europe, at €15,000 (the UK has the highest).
So…what’s happening?
Until now, Italy didn’t seem particularly affected by the terrible economic crisis that hit other countries like the UK and the USA. However, while Italy was relatively untouched when the mortgage/bank crisis first hit, the country is now feeling the pinch as overseas orders collapse (down 20.9% in 2009), particularly in the manufacturing industry. There were 380,000 fewer jobs in Italy in 2009 compared with 2008.
What does this mean for British citizens wishing to find work in Italy?
Things are a lot easier today than they were eight years ago, when I first moved over. For a start, there are a lot more English-language employment agency websites out there that cater to varying types of work in Italy. During just a morning’s research, I came across several: go to http://www.jobsabroad.com and you’ll find that all the jobs on offer are English-language teaching or au pairing. You’ll find more management and technology-based job vacancies at http://www.jobsinmilan.com. Have a look at http://www.gltjobs.com and click on ‘Jobs by location’.
Of course, if you have a TEFL qualification, you’ll have no problem. If you want to be an au pair or a nanny, no problem. If you’re happy just to teach English conversation privately, no problem!
But if you are hoping to find work in an office environment or in a professional capacity, be prepared for an uphill battle, especially if you are not completely fluent in Italian. The Italian job market has, from time immemorial, been dominated by one concept: la raccomandazione. That is, you get jobs through who you know, ideally a relative or a family friend. Hopefully this will increasingly change as jobs, particularly in technology-driven sectors, require specific skills. However, it remains that Italy is just as affected by the ‘brain drain syndrome’ as other European countries.
The best thing to do is to do what I did – continue to work for British clients until you build up a customer base in Italy (or come over with enough funds to last you a good while). It has taken me seven years to do that, and even now I still work with some British clients, though the drop in the value of the pound has made working in pounds much less appealing.
Whatever you do, don’t ‘hope for the best’ and arrive in Italy without work (and with bills to pay). And whatever you do earn, keep in mind that a lot more of it will go into paying tax than in the UK, especially if you intend to work freelance, as I do!
Do give the OGC Resource centre a call if you have any concerns about your move to Italy. They have spoken to literally hundreds of people moving abroad and may just be able to answer your questions. Their phone number is 0207 898 0549.
How the Election may affect your pocket
Whoever wins the next general election may well inherit a “poisoned chalice”.
The UK is in a mess, as are a lot of other countries throughout the world. Economically the UK is not sure if it is on the road to recovery or likely to fall back into recession. And this is after the huge amount of money the Bank of England has pumped into the UK economy over the last 12 months in an effort to kick-start the economy.
The government is continuing to have to borrow huge amounts of money to fund the budget shortfall because government costs exceed tax inflows. Also we continue to see a large balance of payments deficit, where the amount of money leaving the country exceeds the amount of money coming in. Not a pretty picture.
Personal taxes are being increased to help fund the budget deficit but I wonder if this is counter productive as people tend to avoid taxes if they believe they are being taxed too highly.
Here in the UK it seems that people who are able to get up and go are doing so, moving to countries where the tax regime is friendlier. When you are going to have pay tax at 50 per cent plus national insurance, plus value added tax on most of your purchases, plus council tax, it does make you wonder how much you actually pay to the government out of each pound you earn.
We have also seen an increase in the unemployed, who now will not be paying tax. In fact, they will end up as additional cost as they access their State benefits.
Company profits are also suffering and so tax revenues from companies are falling. It would be a great surprise if company tax was increased as the need to keep the recession from returning is viewed as key.
So, if the tax income cannot be increased, what is the government able to do? Apparently, under Gordon Brown we have enjoyed, prior to the recession, improving employment. The truth appears to be that the public sector has seen increasing employment while the private sector has seen a decreasing number employed. It seems to be a case of smoke and mirrors - all an illusion.
And we have to remember, we have to pay interest on the government debt which has to be paid out of our tax revenues. So the problem seems to be spiralling out of control; increasing interest payments on government debt, reduced tax revenues as people leave or avoid tax or become unemployed and company’s profits fall and increasing costs as we pay State benefits to the unemployed.
So what options are left? The most obvious one is cutting government costs. Apparently government costs now exceed 50 per cent of the UK economy. Quite frightening especially when, when Labour came to power, it was only 40 per cent. We also have to remember that the UK economy has expanded in the intervening period.
The Irish have attacked their government cost base with great vigour on the basis that the sooner they sort out their finances the sooner the country will emerge from their problems. They have cut jobs and cut salaries. Not everyone is happy but it needed to be done.
In the UK we have a general election coming up and no government is going to commit political suicide by taking such dramatic action. This of course is exacerbating the problem as costs exceed revenues and debts continue to rise.
But, assuming a hung Parliament is avoided and one party does take control, then costs will need to be cut. There would not be a choice, because the UK is very dependent on the inflow of money from international investors and they would not accept the current situation long term – and they will require the UK to balance the books.
But how will the unions or their members take this? Not well, is my most optimistic view and I am sure we are in for some unwelcome strikes. Also, we will have tougher economic times. House prices are likely to fall; pay rises to be non existent and job security at best tenuous. And this is what the electorate will remember when the next election comes around – the pain and despair. They will forget who was originally responsible for it all.
So will Brown or Cameron be pleased to be voted in? Without doubt, as politics seems to be more about egos than helping the nation.
It is a lifetime ambition to be voted in by the British electorate as Prime Minister. Also, neither of them will get another chance – because if they fail, they will lose the leadership of their respective parties. But, if elected, they will not be able to duck the tough decisions, however unpleasant they are – and they may wish they had never arrived at their destiny!
Remember, in these times of doom and gloom, you can get expert advice and assistance from the experts at Smart Currency. Let’s face it, we need to make our money work for us in the tough days ahead. By using a currency company like Smart, you can save up to 4 per cent on the exchange rate your high street bank will offer and that can mount up as you move your money abroad or bring it back into the UK! There are also mechanisms that will allow you to plan your currency exchange rate well into the year ahead…
It’s often the people that wait until the last minute that are forced into buying at the worst times – don’t let that be you. Request a Quote from Smart Currency Exchange below or give a ring today to discuss your options!
Alexis and her husband Rod recently made a transfer through Smart and I thought you would like to read the amazing testimonial he wrote for us:
My wife and I have just bought a house in France and were astounded at the amount of money we saved on transferring our money into euros. We dealt with James at Smart Currency Exchange who gave us excellent advice on watching the rate over the last few weeks. We decided to lock the rate in when the pound had gained a little in strength, which James did for us quickly and effortlessly.
I asked my bank for the rate they would have given me on the same day and worked out that we saved over £8,000 by using Smart, the price of our recently bought left-hand car!
I would not hesitate to recommend Smart to anyone. Not only is a large saving guaranteed, their service is second to none. In this age of waiting to be put through to the right person on the phone or having to press buttons, there was not one occasion when James did not answer immediately and take the time to explain everything to me courteously and as if I was his most important client.
Thank you so much Smart - we will be using you many times again in the future.
Rod Stratfold
The Taxman Cometh...
I think you will agree with me when I say that, on planning to move abroad, keeping the taxman happy can be very important.
I was recently reminded of my move abroad; a really good friend of mine has fallen into a trap that I avoided - he left South Africa without actually going through the emigration process - and therefore the final tax process too. His wife has a British passport so there was no problem when it came to moving to Britain, but the problem has arisen now that his mother has died and he wants to transfer the balance of his inheritance to the UK.
If he had officially emigrated this process would have been comparatively easy and much more tax-friendly but, since he did not do so, it has become a highly complex process.
Plus of course there is the added problem of trying to get things done from a distance. It took me a full month of visits and endless phone calls to tax and government offices in South Africa before I finally had all the papers I needed to formally emigrate – I don’t want to think of the frustration and the cost of trying to do this from abroad. Quite apart from anything else, it was a personal relationship that I forged with one of the people in the tax office that finally ‘cracked the case’! Incidentally, a word to the wise: never lose sight of the personal touch and of being remorselessly pleasant and patient throughout. A few tantrums and ill temper can delay you by weeks as obstructive staff may decide that it’s payback time!
You obviously need to make sure in your own mind that you intend to remain abroad, but once you are absolutely sure of this – as I was – you need to go into all the tax implications of your move in order so that you get the most possible value from your savings.
You may be surprised to hear that many Brits end up actually paying more tax than they need to when they emigrate. It’s all down to exactly when you leave the country. I was surprised to learn that you may even be owed a refund: it has something to do with unused allowances and varies by the month, peaking for lower income earners in July and higher earners if they leave in August. You need the input of a good IFA (independent financial advisor) here to make sure that you time your move correctly.
I must hastily add that I am no tax expert and you need to take good professional advice, but did you know that there is a completely legal way to save on Capital Gains Tax (CGT) when you come to sell your property/properties?
If you have rental or holiday properties as well as the home you live in, the real saving comes if at some stage you have used the property as your Principal Private Residence or PPR. Principle Private Residence relief means you don't pay CGT on gains you make when selling your main home - and you can also make use of it for other properties you own too.
You can still benefit from PPR by using your rental or holiday properties as your main home at some point before you sell it. This will give you the last three years worth of growth free from CGT as well as the period in which you live there. HM Revenue and Customs does not specify how long you need to have lived there, but may ask for proof such as phone and utility bills, electoral address etc.
If you let the property out at some stage you will be entitled to up to £40,000 letting relief against your capital gain and this is available for each owner - so if it is in joint names, this doubles to a maximum £80,000. However, letting relief is only applicable to properties which have at some point been your main home.
Legal fees and stamp duty count as part of the cost of buying a property, as do selling costs such as estate agent fees - and these can be offset against any gains. In other words, any costs incurred in the buying of the property (lawyer’s fees, surveys etc.) plus in the selling of the property such as agent’s fees are taken off your capital gain before taking any CGT allowances into account. This can be further lowered by calculating the costs of any capital improvements.
If any significant alterations have been made to the property while you have owned it, the cost of these can also be taken off the gain. Minor things like painting and fixing a broken window do not count though. Again, expert advice would be welcome here: the rule of thumb is keeping every receipt!
Also, remember that if you have let your property as a corporate rental to a trading company or business, you may qualify for the much more generous business asset taper relief, giving you a 75% discount on your capital gain after only two years.
I know that much of this may be ‘slamming the stable door after the horse has bolted’, but if you are taking a long term view of moving abroad you may still be able to use this info.
Once again, it’s all down to planning and homework. Not a minute of the planning I did was time wasted and, in the end, it allowed me to move seamlessly and with the minimum of trouble.
I cannot stress enough that this is a really involved subject, one that requires expert advice. However, what I want to achieved is to make you aware that choices do exist, perfectly legal ones that could end up saving you thousands of pounds.
Also, Smart Currency has put out a brilliant FREE relocation report. One of the toughest lessons I learned was that I should have used a currency company to transfer my money abroad rather than my high street bank. Why? Well, this report will explain all that and tell you how to save money…always useful! If you would like this report please go to:
As an owner - or a potential owner - of a home overseas, you will already understand the importance of protecting your valuable asset. Until now it has been hard to find an insurer who provides comprehensive protection combined with a flexibility that covers all eventualities.
I am delighted to tell you that we have found such an insurance provider that provides comprehensive cover against all eventualities for holiday homes. Whether your home is occupied or not, or let short term or long, their policies are ideal for property abroad and are flexible and designed to meet your specific needs.
One of the key advantages is the UK-based English speaking team that resolves any problems that may arise. In addition, all policy documentation is written in English, so you know exactly what you are getting.
Don't risk turning you dream home into a nightmare by not having the right insurance cover - for more information please contact me at 0207 898 0549 and let’s have a chat. Or go to the link below and fill in the insurance resources form. I will phone you to discuss this very important aspect of your property abroad.
Contrary to ‘the movies’, dreams usually come true only after a lot of hard work, planning and dedicated effort rather than just good luck…Here is an email from one of my readers (abbreviated slightly):
Unfortunately, we have no definite time line. We want to have one [overseas property], BUT with 3 teenagers in school here in Cork, Ireland, our Dream of moving abroad must wait.
We have purchased the Guide from you and love reading through it. We just have to wait ...maybe not as long as we think....maybe, just maybe we can purchase sooner than we realize. If we can go on a holiday or two in the coming few years....then....hopefully we will know exactly the place where our Heaven lies!
It is so wonderful to get all your expertise in the Guide, so glad I fell upon your site and purchased it. We TALK, THINK and DREAM of (buying abroad) each and every day.
So thanks again for all your news and updates, keep them coming! Love hearing from you - well done!!!
Best Regards,
Paula and Michael.
Plan exactly what it is you want from your dream. Travel there and find out the location that suits you best. Factor into the equation things like access, transport, cost and so on and read the Italy Property Buying Guide if you have not already done so. To order your copy, go to: http://www.ItalyBuyingGuide.com/guide/htm
To get more information on each guide on offer, please select the country below:
The Overseas Guides Company (the OGC) was formed with the express aim of helping people to research and to solve the numerous questions and problems that arise when buying property and/or moving abroad.
Director of the company, Kim Brown, had seen up close and personal just how badly things can go wrong when her parents-in-law suffered at the hands of unethical people when buying a property in Spain. It all ended disastrously and Kim decided then and there that this should not be allowed to happen to others.
The OGC Resource Centre team help educate overseas property buyers on how to avoid pitfalls, minimise risks and save money! Talking to hundreds of people on a daily basis means that they have come across most of the problems that can arise and, in many cases, have been able to help resolve them.
Here’s what a happy OGC reader has to say:
“…Let me say how happy Philip and I are with your [OGC Resource Centre] service. You have opened so many doors for us….I like to take things one step at a time, to fully take on board every situation, but I could never have been prepared for the multitude of options that you have presented us with. …You can be sure that we will be using your recommendations because we are gaining more and more confidence in your company and that is all down to the interest you take and the advice you give”
Just pick up the phone at 0207 898 0549 and the OGC Resource Team will be happy to help you. The team is available Mon-Fri from 9am to 6pm. You are under no obligation to use any of the recommendations and this service is absolutely free at the moment, so give them a ring today or fill in our OGC Resource form at:http://www.ItalyBuyingGuide.com/property.htm
Kidzone: Next time I talk about those most important people – children!
If you have children and are considering moving to Italy, your move will impinge hugely on their lives – I am going to chat a bit about this next time.
I hope that you enjoy the onset of spring and that your plans to buy are forging ahead. Remember too that the friendly OGC Resource Centre team are always delighted to hear from you. Any help they give forms part of a totally free service and you are under absolutely no obligation to us any suggestions they may make.
Here are a few kind words from one of the Guide readers:
Hi,
Just a few lines to tell you how much my wife and I appreciate your guide. We do look forward to the monthly letter and the in depth information you supply with it. Please carry on the excellent service you deliver and accept my very best wishes for the future.
Jim Pryde.
Have a good month and a happy May Day too. Let’s keep fingers crossed that it will be a lovely sunny weekend!
