How to Use Your UK Passport for Greater Financial Freedom!

Do you know what the best thing is about being British?  It’s having a British passport that you can use to vacate the nation!  Okay, so that’s a little harsh – I am proud of my heritage but I am also incredibly grateful for the freedom that I am allowed because of the rights I am afforded because I live in a democratic nation and have such a flexible friend in the form of my little dark red passport.

And vacating the nation means that I can expatriate and go and live in different countries around the world and expose myself to different opportunities – and so can you!  In this report I’m going to show you how to use your UK passport for greater financial freedom – because trust me, once you move away from the net of the British taxman, there is a wealth of financially exciting opportunity potentially available to you.

You have to be non-resident for tax purposes in the UK to potentially have access to many of the following financially freeing opportunities – which is where your passport comes in.  So, if you’re thinking about living abroad and want some incentives to make your dreams a more concrete reality, or if you’re already living and working overseas and you want to know how the fact that you’re not a British resident for tax purposes can open all sorts of doors to you, read on.

How Does a Passport Help?

Yesterday we published an article all about whether the UK is likely to follow in the footsteps of America in terms of eating up any freedom that its citizens have left – fortunately the conclusion of that article was that basically, as a Briton, the best thing you can do if you want privacy and freedom assured is leave the UK.  Unlike poor Americans who are charted and plotted and followed everywhere they go, we Britons are basically left alone enough by Big Brother if we get out of Britain.  So, assuming you would like to have legitimate access to financially freeing savings and investment opportunities that offer more than an ISA or an onshore pension (yawn) – move abroad and read on again!

The Expatriate Advantage

When you leave the UK to live permanently abroad and you fulfil the following HMRC criteria you will acquire the expatriate advantage: -

“Normally if you leave the UK to work abroad full-time, you will become not resident and not ordinarily resident in the UK if your absence and employment from the UK covers a complete tax year (i.e. 6 April to 
5 April), and you spend less than 183 days in the UK during the tax year, and your visits to the UK do not average 91 days or more a tax year over a maximum of 4 years.  (For visits to the UK, days of arrival and departure are not normally counted as days spent in the UK.)”

The expatriate advantage is that you no longer have to pay British income tax on any income you earn outside the UK!  This naturally means you potentially have much more money to play with – and when I say ‘play with’ I of course mean save and invest wisely!  At this point before I get lynched by people telling me I’m giving misleading advice I need to say that I am not actually giving any advice, if you want to know whether you have any liability to UK taxation you need to speak to an accountant; ignorance is no excuse and you should never assume anything when it comes to your tax status, get it checked out.  Moving forward, when you’re in a position where you are earning an income on which no British tax is due, you may be in a position to legitimately avoid all forms of tax on that income depending on the nation you’re residing in.

Whether you can or cannot avoid income tax, (if you’re permanently resident in Dubai for example you might be able to as there is effectively no such thing as income tax in the emirate – or if you have residency under the criteria of various schemes that are available in nations such as Belize and Malaysia you can legitimately earn your income free of tax), what you can do as an expatriate is take full advantage of the tax friendly, exciting offshore and international savings and investment options that are not appropriate for your onshore peers.

This is what’s known at Shelter Offshore as the expatriate advantage.

What You Can Do with the Expatriate Advantage

Just imagine earning your income free of tax – how happy would that make you?  As stated, depending on where you live, work and earn your income, you may well be in such a position.  Naturally as a direct result you will have more money in your bank account at the end of the month to use to your long-term financial advantage.

Even if you do have a tax liability there are also ways that you can work your money so that you defer any tax liability that will also give you an advantage as it will give you more money to work with from the outset, and the bigger the investments you can make the more potential interest you can earn.

Yes, I am simplifying things here because as a bottom line – the expatriate advantage is a very simple one!  As a non-UK resident you have every right to access the wonderful world of offshore and international savings and investment solutions, and these can allow you to potentially defer tax, earn better rates of interest, have greater privacy, have more flexibility and choice, face lower charges and structure entirely appropriately your entire portfolio for your plans and goals today, tomorrow and well into the future.

Examples Please!

Onshore in the UK you can save into a pension – you can get limited tax relief on your contributions but you cannot have access to any of the money until you’re at least in your fifties and at that point you will have to buy an annuity with all or a large part of your pension pot.  You will be taxed on your pension income.  When you die your pension dies with you – nothing from the annuity can be passed on to your loved ones.

Offshore outside of the UK you have a million better options!

For example, you can efficiently transfer your UK pension pot overseas with you into a British government backed scheme called QROPS.  These schemes are offshore pensions basically – and with such a scheme you can save and invest in many different ways with multiple underlying options of where and how your cash is invested.  Depending on where you live when you retire you can potentially take the entire pension tax-free.  You have no obligation to buy an annuity with your QROPS meaning that you can do what you like with it and ultimately, when you pop your clogs any of your unspent capital and income can be passed on to your estate.

Onshore in the UK your best method of saving is arguably an ISA – you are limited to how much you can squirrel away into such a tax-friendly scheme though and the government wants to know about every ISA move you make – oh, and if you take an income from your ISA it’s taxed.

Offshore you can plan what you want to do with your money for the short, medium and long-term, you can work with an adviser who will assess your entire situation holistically.  They will take into account where you’re domiciled, where you’re tax resident, where you plan to be in 1, 5, 10 or even 40 years time, what you want to do in retirement and how you should be protecting yourself, your status and your family.  A plan will be devised and developed with you in the driving seat, all of the savings and investment paths appropriate to meet your short, medium and long-term goals can even be placed within a secure portfolio structure that makes them cheaper to run, easier to alter, simple to assess and tax and privacy secure.

Need to Know More?

If you are not resident in your original nation of domicile and you are not a US citizen you can have your very own professionally designed portfolio created for you. 

All you have to do is use our offshore savings form to access a team of independent expert offshore advisors who will answer all of your offshore questions.  This service is free and without any obligation upon you whatsoever to take any of the services, products or general advice that may be discussed. 

Alternatively, find an independent expatriate financial adviser with whom you’re comfortable working and get on with the job of making the most of your financial freedom that ultimately your British passport has afforded you!