| |
Clients
 Expatriates
The term "expatriate" can cover a multitude of different situations both
personal and fiscal. Many people come to another country, imagining that
their stay will only be for a few years, and that they will repatriate
afterwards. In many cases this does not happen and they end up settling
permanently. If their children form partnerships with others who are locally
based then the die is cast especially if grandchildren come along. To us,
an expatriate is any one who has a passport different from the country in
which he is living and that means that we have something to offer regardless
of whether you plan to repatriate or not. Specific categories of
expatriate deserve special mention:
- EU civil Servants.
Under the EU protocol an EU Civil Servant remains resident of his country
of origin, if that was where he was recruited, for income tax purposes,
but is not so resident for Capital Gains Tax purposes. The net result of
this anomaly for a UK citizen can be that on return to the UK he can be
presented with a huge demand for arrears of tax in respect of interest on
bank deposits etc which were not declared while in Belgium as they should
have been.
Unlike Belgium, the UK has no statute of limitations that he can rely on
to protect him effectively from failure to report taxable income.
Do not imagine that the UK tax authorities are unaware of this or act on
the assumption that they will never find you out.
We can draw up an investment plan to
legitimately avoid these liabilities
- British citizens planning to return to the UK
British citizens planning to return to the UK at some time in the near
future are often persuaded to transfer their share portfolios into an
offshore life insurance product as part of their tax planning. The
supposed advantages advanced by salesmen include tax free growth, a 5% tax
free withdrawal for 20 years, exemption of gains made while abroad through
time apportionment between the period spent abroad and after return, and
various others.
These advantages are mostly illusory. The 5% allowance is nothing more
than exemption of the tax on the capital and ALL the gains or withdrawals
in excess of 5% are taxable. Add to this the extra cost of the structure
itself and you are paying a high price for little or no benefit.
Contrast this with the situation where you invest directly in the same
shares or funds. Properly structured, you can get relief from tax on
inflation gains, realized losses are carried forward against future gains,
there is also no tax on invested capital and there is a TOTAL annual CGT
exemption on realized gains (not encashments) under £9,200. Thus, only a
part, if any, of your gain is taxed compared with an insurance policy
where every penny of gain is taxed eventually.
Do not enrich an insurance salesman for a non-existent
benefit
Note! that the foregoing comments apply to equity portfolios and do not
necessarily apply to those invested in certain managed funds, bonds and
structured products. Nor do they apply to investors planning to remain in
Belgium long-term where tax treatment is different.
If you have particular concerns and interests in these fields, then
please contact us. |
|
