Having been present on the Costa del Sol for over twenty years we have seen many so called financial advisors come and go as well as hundreds of investment schemes and opportunities that have led to heartache and financial ruin for many expatriates. Everyone is familiar with the collapse of BCCI and the financial improprieties of Barlow Clowes where hundreds of millions were involved. However there have been many other cases that did not grab the headlines in such dramatic fashion, but did result in thousands of individuals losing very substantial sums of money and having limited recourse against the culprits.

At this present time the most fashionable words in the financial markets appear to be EQUITY RELEASE, and this is being applied to many schemes and although some are being promoted correctly and professionally unfortunately there are those that are not. Having been involved in property capital release programmes for over four years, we are aware of and have access to most of these plans. However, there are a number of these that we believe are thoroughly unsuitable and potentially dangerous for property owners and we have rejected these totally. Unfortunately there are other advisors who do not feel the same way and continue to offer them. In most cases the clients are elderly and without much knowledge or experience of financial markets and have faith and trust in the advisor and enter schemes without fully understanding the full implications and risks involved.

It is very easy to highlight and talk about the benefits of any scheme. It is not so easy to draw attention to the possible risks and costs involved as these might deter the individual from proceeding. Any person considering the possibility of entering an equity release scheme would be advised to talk to someone who is fully acquainted with all the available schemes and can give impartial advice as to which is the best for their own particular circumstances. Any firm or individual who can only promote one particular scheme or product, cannot give impartial advice.

Equity release by definition means the release of an amount of capital (cash) to the property owner to do with as they wish and/or to provide a regular income. We have seen a number of schemes launched on the Coast with the stated intent of avoiding Spanish inheritance tax, and being referred to as equity release. They very clearly are not, and the danger is that in all probability they will not succeed with the Spanish hacienda. Any scheme that is designed solely to avoid taxation, without fiscal or personal benefits to the individuals concerned, will be challenged and most certainly disallowed. An expensive exercise with no benefits.

At Graydon & Associates we know that the equity release plans we recommend do work successfully. They are designed to give access to an immediate cash sum if required and to generate sufficient returns to pay all the interest and costs associated with the bank loan as well as providing access to additional income.

We are probably the only firm that can say that we have saved our clients large sums of potential inheritance tax. Over the last four years we have seen two of our clients die, and in both cases our equity release planning has been accepted by the hacienda.

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