Financial Planning and UK Expatriates
The true value of financial planning is to place a strategic framework around all your financial activities and decisions. However, expats will typically have a much more complicated set of circumstances than domestic clients and will benefit from specialist advice. We routinely, on day to day basis, deal with an extremely wide range of issues - with the Chart below providing an introduction to some of the more common matters arising.
Effective Tax Planning in the UK and Overseas
Expats will typically have relationships with at least two tax regimes and two currencies, often more - which significantly increases the complexity of their affairs. The fact that you are tax non-resident also does not necessarily preclude you from liability for capital gains tax, or for submitting an annual UK tax return in relation to an income producing property. However, your current host country may also seek to tax your income on a worldwide basis, and the two tax regimes have to be managed efficiently if you are to avoid unnecessary taxation. This is further complicated if the tax years of each country do not coincide - which is usually the case.
Your time as an expatriate may represent your best opportunity to generate real wealth by virtue of both a higher income and a reduced tax base. Sensible financial planning can ensure that you both enjoy your time as an expatriate and take full financial advantage of your time overseas. Care also needs to be taken in relation to some investments to ensure they are both tax and cost effective, and consistent with your medium or long term planning.
Additional Expatriation Costs
Almost inevitably, new expatriates experience some "dislocation" at the start of any overseas assignment. This will often extend to finances and can mean that they do not make the best use of income flows. Conversely, there are also some areas where there can be substantial, long term increases in costs, such as with education and health, which may need to be reflected in other financial arrangements, including life insurance and savings plans.
While overseas you will often be faced with decisions about what investments you should make and whether they should be held offshore or in the UK, with the "optimal" answer very much dependent on a range of personal issues, such as your age, the time until you intend to become UK resident again, if ever, and whether you wish to retire offshore and your current host country tax environment. One of the "side effects" of an expat lifestyle is often a great degree of uncertainty over the question of, "where do I want to live in retirement" and the difficulties of optimising your financial position while maintaining flexibility.
There are quite a few issues which can arise on return to the UK which are significant from a financial viewpoint and deserve to be treated professionally; these include the potential repatriation of any foreign pension funds and the (tax) treatment of any funds or investments which have been amassed offshore. These issues need to be considered well in advance of any return to the UK or retirement overseas.
Making an Inquiry
Most UK financial planners remain focussed on the UK domestic market and we have taken time to establish a network of planners who have both a continuing interest in the expatriate market and cover specific areas of expatriate concern - integrating well with other specialists such as expatriate tax advisors and pension transfer specialists to provide broad advice.
All planners welcome inquiries from expatriates and are happy to have an initial discussion with expatriates on a no-commitment basis, whether over the phone or in person, to discuss their individual situation and see whether they can provide assistance in their area of concern.