The Up´s and Downs of 2007

In previous years my Christmas trip to see family in the UK has been accomplished in a week.  This year though ‘his eminence’ and I decided that we would go for two weeks and do some touristy things as well. 
We had a great time and managed to include a few extra family members on the tour.  Our trip included the usual topics of horror; fuel prices, the cost of eating out and food quality comparisons (you know that I mean….’our oranges are much better than these’ etc, etc).  Imagine the shock when we arrived back in Valencia only to see that the price of diesel had gone up by six cents.
Now I shouldn’t have been surprised really because the price of crude oil has been increasing steadily over the past few months. If you tack on the falling dollar rate and the strengthening in the value of the euro, then it is obvious the prices at the pumps are going to soar.
This unfortunately also means that not just fuel but prices in general will continue to rise into the first quarter of the New Year.   In November I mentioned the euro was getting stronger, at that time it was around 1.41€ to the pound.  At time of writing it has strengthened even more to 1.38€.  Those who rely on regular payment direct into their Spanish bank have seen the value drop by ten cents per pound since the summer.  This means if you have say £500 monthly transfer you will be at least 50€ a month worse off (more if you are not receiving spot rate transfers).  If you then take account of the Spanish price increases then you could have a real headache if you don’t step back and look at your expenditure before a problem arises.
If you have in place a facility for fixed regular payment transfers (my article October 2006) via a foreign exchange company then these fluctuations will not affect you.  If you don’t then you should make some enquiries and think about it for the future.
On the up side; again if you had taken my February 2007 article to heart and bought a loved one a gold ingot or sovereign then you would be able to sit back and smile; and, if you were really brave you could perhaps not bother with a Christmas present as the increase in value of the gold ingot would more than compensate.  Back then gold was running at around $600 an ounce and now it is around $800 per ounce.   To put it in perspective (remembering also the falling dollar rate) if you had spent £1000 on a gold ingot to ‘wow’ that someone special in the summer it would now be worth over £1200.  Not bad for anyone who wants to give pleasure whilst gaining a bit of profit at the same time.
I don’t want to be a Christmas Scrooge so I won’t go on about the slowing housing market and the fact that even the bursting Chinese market is being pulled back by the government.  The Chinese government have asked banks to increase the reserves they set aside.  This is in an attempt to cool Chinese economic surge.  In Europe the stock market is also moving forward though not as yet surging.  This forward pace is at a time when credit facilities have become more strict.  In the short to mid term it will be for the better as those at the bottom end will not be able to get into debt so easily.  In the short term though, it means house prices and sales will slow. 
In the long term it will benefit all of us, those who are selling may well have to wait longer but once the market does move there will be more buyers around. Thus the market will move forward and upward.
Before I wish you all a very Happy Christmas I must again remind you of the deadline for UK tax returns.  You need to send your return to HMRC in time to reach them by the 31 January.  If you have not started yet then come the 2nd of January 2008 get your head down or you will be liable to a fine and interest on any overdue tax.  Alternately seek professional help to ensure you cover all areas of liability.  Too often I receive requests from clients who have received a demand ‘from out of the blue’ for outstanding tax they did not think they owed and for returns they did not think they had to make.
This is also the last time until January of the nest year to make a return.  The next return for the year 2007 to 2008 must be with the tax office by the 30 November 2008 at the latest.
Happy Christmas.
For assistance with UK and Spanish tax, mortgages, currency transfers and financial information support contact Ann on 661003324, email This email address is being protected from spambots. You need JavaScript enabled to view it. or This email address is being protected from spambots. You need JavaScript enabled to view it..

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