Offshore Banking, Savings and Investment News
News and information for expatriate and international investors and savers.
How to take your pension out of the UK, retire to a beautiful European nation and pay absolutely no tax!
In theory from April the 6th a UK pension can be taken out in its entirety. There will no longer be a requirement for someone with saved pension wealth to buy an annuity. For a resident in the UK it will mean 25% of their pension can be taken tax-free and the rest will be taxed at the individual’s marginal rate. However, if you move abroad you may be able to take the whole pension out 100% tax-free.
There are plenty of caveats and warnings to this fact however, and we detail these below! But if you want to move to a country like Cyprus or Portugal you can theoretically take your entire pension free of taxation…and if you move to a country like France or Malta you can enjoy a real tax reduction compared to what you’d pay if you remained in Blighty.
If all this sounds like it’s too good to be true it’s not – but be warned there are plenty of hurdles to jump through and issues to be aware of. Expats may be able to take their entire UK pension tax-free, but they may not want to…here’s why and how it works: -
An expat’s view of the Nordic people: an hilarious and fascinating, detailed observation of Sweden, Denmark, Norway, Finland and Iceland.
The first ever United Nation’s World Happiness Report produced in 2012 rated Denmark the happiest country in the world, home to the happiest people. Other Scandinavian nations such as Sweden and Norway weren’t far behind…so does the happiness rub off on expats?
Well, in his book about the Nordic people, expat observer Michael Booth takes a funny and frank look at the Scandinavian nations and their people. Booth’s book, entitled ‘The Almost Nearly Perfect People: Behind the Myth of the Scandinavian Utopia,’ is so appealing and amusing you don’t need to be an expat in any of the nations surveyed to want to read it!
Filled with both fascinating and funny observations backed up by clever research, Mr. Booth educates and amuses his readers with comments such as Nordic women: “manage to project an image of being pious, sanctimonious Lutherans. It is a neat trick to be thought of as being both deeply hot and off-puttingly frigid.” And “Five percent of Danish men have had sex with an animal…” Intrigued? Read on…
Spain has made changes to its tax system that will affect many expats.
Expats who own property or who run a business in Spain are likely to be affected by the changes to Spanish tax that were brought in for 2015 budget. Whilst most changes have been implemented in an attempt to boost the economy, it’s clear that some have simply been adjusted to bring in revenue.
It’s obvious that Spain is still struggling financially, and it’s seemingly torn between raising tax revenues on the one hand, and enabling foreign direct investment and business on the other. For expats caught on the wrong side of the changes it could be expensive! However, the majority of the tax changes are being seen as positive for the overall positive development of a slowly recovering economy.
The main piece of good news is that capital gains tax in Spain is falling, as is the highest rate of income tax. The bad news is wealth tax has been extended and rent control on commercial premises is being abolished, meaning that market forces can now push rental rates ever higher.
Are expats really going to be able to take their UK pension in cash from April?
In April new pension rules come in to play in the UK, and according to recent analysis of the pension and annuity market by The Scotsman newspaper, many would-be retirees have put their pension plans on hold over the last year in anticipation of the massive changes they are hoping to benefit from in April. Among those who have postponed accessing their pensions are thousands of expats.
Instead of buying an annuity and pegging their future retirement to a fixed investment path, soon-to-retire pension account holders are putting off making any decisions until after April’s new changes come in to effect. However, will the reality of the new rules match the anticipated benefits? Not for expats…
Any expat with a defined contribution pension scheme in the UK could be in for a nasty shock if they believe their pension will suddenly become a flexible investment vehicle. That’s according to expert opinion. There are many pitfalls to the new rules that expats need to be aware of.
How an expat went from earning a schoolteacher’s salary to investing his way to millions.
Would you accept personal style tips from the scruffiest person you know? Would you accept sobriety tips from the heaviest drinker you know? So why would you accept investment tips from anyone other than a self-made millionaire? And as an expat, why would you take tips from someone who has no idea about your lifestyle – and the opportunities and challenges it brings?
The good news for expats is that a fellow expat, who started his professional life as a modest teacher in an international school, and who invested his teacher’s salary so carefully he turned it into millions, has written a book explaining how anyone can follow in his fortunate footsteps.
If you’re an expat and you have ambitions of becoming wealthy, Andrew Hallam’s book ‘The Global Expatriate’s Guide to Investing: From Millionaire Teacher to Millionaire Expat’ will make essential reading. It’s a humorously written informative guide, complete with case studies. And it contains some exceptionally brilliant tips!
Many expats can’t afford the retirement of their dreams because they just can’t save enough.
Since 2005 HSBC has been producing an annual report entitled The Future of Retirement, in which it publishes findings of research conducted amongst international citizens relating to their plans for retirement. According to HSBC the report: “provides authoritative insights into the key issues associated with ageing populations and increasing life expectancy around the world.”
The 2015 report has recently been published, and it has been given the subtitle ‘a balancing act’ because seemingly far too many of us are finding it increasingly difficult to balance the cost of living abroad versus saving for our retirement. The findings are quite striking, if largely unsurprising.
For example, the cost of living abroad eats far too much into any income we earn, making our dreams for retirement an unlikely ambition at best - according to large swathes of the 16,000 expats surveyed by HSBC in 15 different countries. This won’t come as a major surprise to many expats, particularly those living in hotspots like Dubai where the cost of living and the general lifestyle can wipe out any high-salary and tax advantages for example.
Where can you find work in the banking and financial sectors in 2015?
If you’re working in the City and looking to move abroad and take your career with you, or you’re already an expat and you want to move on or move up, where are the banking and financial service sector jobs in 2015? According to research by eFinancialCareers there is money to be made and jobs to be found in the Asia Pacific region.
But be warned, whilst you might be swapping grey skies for blue, and you might be upsizing your career, you could be downsizing your salary. To learn where there are expat jobs in finance and banking in some of the most beautiful Asia Pacific countries, read on.
Whilst Singapore and Hong Kong already offer salaries to match even the biggest lifestyle ambitions for senior bankers and finance professionals, the likes of Kuala Lumpur in Malaysia and Jakarta in Indonesia, where eFinancialCareers claim there are plenty of job opportunities in 2015, can’t necessarily match the remuneration packages of their wealthy regional neighbours…
Ecuador is apparently the best country in the world for expats to retire to.
No one can beat International Living (IL) when it comes to compiling excellent indices on the cheapest places to live abroad. But at this time of the year they often present us with good food for thought in the form of a retirement abroad index for the coming year. So if you’re approaching retirement, or you just want to plan ahead and start thinking about where you can put your feet up in perpetual sunshine and luxury, IL is here to help.
Whilst the publication is North American facing, it can open the eyes of us Brits by making us consider countries way outside our usual perspective as a good place to live abroad when we retire. For example, in this year’s Best Places to Retire Index the top three nations are Ecuador, Panama and Mexico. Certainly not hot on the majority of Brits’ agendas when looking for somewhere to retire abroad to…
Taking our inspiration from International Living’s findings therefore, here is why Ecuador is the best place to retire abroad – and why it actually deserves at least a second, much closer look as potential retirement abroad destination by more Britons.
Rules relating to the payment of CGT by non-resident UK property owners will change in April and expats will be affected.
Significantly sneaky draft legislation was published last week that will affect the way capital gains tax (CGT) is charged on the sale of UK property assets owed by expats. It is due to come into effect from April 6th 2015, and it is expected that the vast majority of expat property owners could be affected. The worst-case scenario is that expat property owners will lose up to 28% of their property profits.
From April 2015 capital gains tax will be payable by all expats and non-UK residents on any gains made from sales of British residential property. Obviously buy-to-let property and holiday homes, which are rented out, will fall within this new CGT regime. It will also affect British expats who hold an empty British property that they were hoping to sell at some point to perhaps fund an overseas home purchase.
If you sell before April the 6th 2015 the old rules still apply. What’s worth mentioning is the fact that Principal Private Residence (PPR) relief could still be available or partially available for some. Under Principal Private Residence relief UK residents living in the property in question who then sold it would be exempt from paying any CGT, as it is not payable on one’s main home. (Unless you’re Boris Johnson and have duel UK/US citizenship…) So affected expats could choose to return to the UK, reside in the home and then sell it. However, it’s not quite that simple.
The expat personal tax allowance in the UK has been protected and extended, and other Autumn Statement tax changes could see expat Brits even better off.
Earlier this year we reported that the Chancellor was considering scrapping the personal tax allowance for expats and that this potentially signalled the start of a tax attack on non-resident Britons. The good news is that following the consultation period the Chancellor has announced that things will stay as they are for Brits abroad…for now.
The Autumn Statement last week actually extended the personal tax allowance to £10,600 – this will come into effect from April 6th 2015. Many who commented on the consultation and the proposals advised that far from bringing Britain’s tax regime in line with those of other nations such as the US, Canada and some countries in Europe, scrapping the personal allowance for anyone who didn’t have “strong economic ties with Britain” would actually make the entire tax system in the UK unworkable.
It seems that the government has accepted this argument for the time being, and also agreed that the current system is internationally-competitive for non-residents. There was further good news for some expats in the Autumn Statement too…