Offshore Banking, Savings and Investment News
News and information for expatriate and international investors and savers.
Are you making the most of your time abroad by saving and investing your wealth appropriately for your expat status?
As soon as you move abroad and become non-resident in the UK for tax purposes a whole new world of financial opportunity is opened up for you as an expatriate. That’s the good news! The bad news is that with opportunity there comes risk – and the main risk is making the wrong decisions for the benefit of your wealth. As an expat you have to think differently about your money…
For a start you’re exposed to different issues that can affect your wealth, from currency conversion risks to the risk of choosing the wrong offshore jurisdiction for the safe investment of your money. Fortunately, if you take expat appropriate advice from qualified and regulated financial advisers, you are more likely to be as well informed as possible, and ensure every decision you make is the right one for the long term health of your wealth.
That said, if you do decide to go it alone and make your own financial decisions, there are 5 common traps that expats need to avoid if they want to prevent their wealth’s health from risk and potential erosion. In this report we will highlight the main risks, and also explain how you can get in the right international mindset for the benefit of your expat finances.
As more British expats move their money out of sterling, where is your money safest?
According to the BritishExpats.com website, British expats have been moving their savings out of sterling and into their local currencies. Since September last year there has been a significant change in the way Britons are choosing to hold their money.
Whilst the move may seem relatively small in percentage terms at first glance, it does add up to quite a loss for the UK’s pound as greater numbers of Britons abroad believe more in the strength of their new nation’s currency, compared to the UK’s pound.
In an article penned on the subject, the excellent website references research carried out by Lloyds TSB International which has identified that whilst in September 2012 26 percent of British expats had the majority of their savings in sterling, this has since dropped to just 13 percent to date. But this really begs the question, which currency is best for your expat savings?
Expat Explorer 2013: it’s time to submit your answers in the biggest expat survey.
The annual Expat Explorer Survey has been released for 2013 by HSBC, and it’s time to take part. It’s a survey open to all expatriates, and last year over 5,300 expats from over 100 countries took part. The aim of the survey is to get as good an impression of all aspects of expat life around the world, in a bid to be able to present a clear picture of what it’s like to live abroad in different nations.
Websites like ours find the results fascinating, because it allows us to inform our readership about where in the world expatriates prefer living, where they earn more, have greater disposable income, where the lifestyle is the best, and how expats make the most of their money when living, working or even retired abroad.
However, the survey is only worthwhile if enough expatriates take part, which is why we’re promoting it today for all expats everywhere! Despite being run by HSBC, the survey ensures your complete confidentiality and privacy. Expat Explorer 2013 will hopefully be the biggest and best yet, as greater numbers of expats now know about its existence. Please help us spread the word, and get involved too. The more people who respond, the greater the ultimate resource will be in the end.
HMRC’s rules relating to residency have changed and some British expats now owe tax in the UK.
Did you know that there has been an overhaul of the rules relating to residency and domicile in the UK? Are you non-resident abroad for taxation purposes? Are you sure? You might have thought you could just ensure you spend 6 months living abroad and avoid all UK taxation for the tax-year in question – but chances are you could now be wrong.
Expats are discovering that there have been changes to HMRC’s rules relating to residency for tax purposes, which came into effect on the 6th of April 2013. For most Britons living abroad the new rules have no impact upon them whatsoever. And if you’re permanently resident abroad and have no assets or liabilities in the UK you can probably forget about the new rules…
But for everyone else, you need to take a look and ensure you’re not affected by the changes - because if you are, you could now have a tax liability in the UK that you never even knew about. As always when it comes to taxation, never assume – always ensure. This is because the onus is always on the individual to pay what they owe or face the consequences.
Expats living in Spain and with overseas assets fear a tax or asset grab by the Spanish tax authorities.
No one can fail to have noticed just how heavily impacted certain nations have been by the global recession. Spain is one of the most badly affected countries: unemployment, and in particular youth unemployment, is running at a record level for example, and poverty is impacting growing numbers of citizens.
As a result of the dire state of the Spanish economy, the government of Spain is desperately looking around for ways to raise much needed tax revenue. And following hot on the heels of what happened in Cyprus earlier this year, everyone is concerned that the Spanish may launch an asset grab of their own.
These are particularly worrying times for British expats living in Spain – compounded by new declaration rules which came into effect at the beginning of this month, and which require anyone with overseas assets worth in excess of EUR 50,000 to declare them to the authorities. A great deal of confusion abounds about these new rules, so we hope to clarify them and explain how Britons can potentially protect their position in this article.
British expat pension inequality is hitting the headlines again.
The Daily Mail made much of the news that 220,000 people living abroad ‘unfairly’ claim the British state pension earlier this week, but some Shelter Offshore expat readers have warned that this latest pension inequality argument will actually backfire on Britain.
Some Britons and much of the British press love to bash expats whenever they get the chance: it’s simply a jealousy thing! But now that times are really hard in the UK and the government needs to justify every single cut, it’s great to be able to use this latest information to deflect attention well away from some of the least fair cuts affecting onshore Brits.
Apparently the 220,000 people, whom the Daily Mail believe shouldn’t have access to the British state pension, cost the UK tax-payer £410 million pounds annually. But as our readers have been quick to point out, the headline here should be about the fact that this money gets paid to those who have never contributed, whilst over 550,000 Britons who contributed long and hard to the tax system live abroad on frozen pensions.
Britain’s overseas tax havens have come under pressure to automatically exchange expat bank account information.
The big news to hit expat headlines in the last week has been about British Overseas Territories such as Bermuda and the Cayman Islands being forced to agree to new disclosure rules, mainly in a bid to keep Europe and America happy, and in an effort to clamp down on the likes of tax evasion and money laundering.
The so-called British tax havens, like the Virgin Islands for example, have come under fire from nations such as Austria, which in turn have been under scrutiny for their own less than transparent and ‘fair’ tax rules. Austria had in the past accused both the UK and the US of enjoying and utilising their own tax havens, whilst cracking down on everyone else’s.
With America targeting nations like Switzerland aggressively, and the EU demanding fair tax practice more desperately as it is swallowed beneath mounting debts, it wasn’t going to be long before the finger pointing turned to Britain’s - shall we say - more tax attractive overseas territories.
The Foreign and Commonwealth Office’s Locate system is being scrapped as Brits abroad don’t want to be found!
Britain’s Foreign and Commonwealth Office (FCO) has discovered that Britons prefer to remain anonymous abroad. The UK’s FCO introduced a service called Locate some years ago – we reviewed the pros and cons of registering with it and your embassy back in 2010. The idea behind it was that any Briton resident in a foreign nation could register with the service and be alerted by the embassy should some disaster or issue arise.
It was suggested that the service could be useful for those in volatile nations, or in countries where natural disasters were more likely for example. The selling point from the Foreign and Commonwealth Office’s point of view seemed to be that if they knew where all Brits were abroad, they would be better placed to help them out should the need arise.
However, it has been discovered that British expats prefer to hide abroad! They are not at all keen to share their details with the FCO. As a result the Locate scheme is being scrapped and instead, Brits are being encouraged to use social media to keep on top of what’s happening in their new nation. We asked a handful of our regular contributors what they thought about the abolition of Locate…
British expats could be forced to fund the next eurozone bailout if Germany gets their own way.
According to stereotypes there’s few things Germans love more than Bier and Bratwurst. However, I would like to suggest that perhaps creating and imposing new taxes is one national pastime also beloved by many a German! Having lived in Germany for almost a decade I was often struck by how many taxes there were, and how many creative ways Germans found to avoid or offset them! It’s a national pastime it seems - create a new tax: find a way to avoid paying it!
Don’t get me wrong, there are some things about the German tax system that I always thought were wonderful – for instance, the fact that your commute to work is tax deductible. Genius! Britain could learn a thing or two from such a policy if it wants to get the nation hungry for work again. However, the fact that there were so many taxes and that they were so heavily levied, always left me feeling a little less than positive when I received my much reduced pay packet each month!
Now I fear that every British expat in Europe needs to fear the German’s love of taxation…because there are those in power in Germany who are currently plotting and planning ways they can force the wealthier European residents to cough up for future bailouts.
Expats, protect your pension from currency erosion or risk losing money.
New figures from one of Britain’s largest pensions administration companies shows just how badly impacted some expat pensioners are by adverse currency fluctuations. Their figures reveal that some expatriates have lost almost 50% of their pensions’ buying power over the last ten years because of a weakening pound.
Expats living in some of the most popular destinations abroad are among the hardest hit, and the statistics show why so many Britons abroad are now struggling, financially speaking. All of those affected are Britons who have left their pensions investing in the UK instead of transferring them abroad.
Those who have taken advantage of HM Revenue and Custom’s qualifying recognised overseas pension schemes are believed to have been less badly affected, most specifically because of the options available to such expats to secure their pension in the currency of their choice/their new nation.