In Focus News & Insights

The Cayman Islands or “Cayman” consists of three islands; Grand Cayman, Little Cayman and Cayman Brac.  They remained mostly uninhabited until the 17th century.  The earliest settlors consisted of pirates, refugees, “lost at sea” sailors and migrants from other neighboring islands.  In 1670, England gained control of the islands which remains a British Overseas Territory to this day.

Europe is heading towards a “cataclysmic event” that could lead to the collapse of the euro and the end of the European project as we know it, according to Nobel prize-winning economist Joseph Stiglitz. In the run-up to the UK’s vote to leave the European Union, Italy’s litany of problems had gone largely unnoticed. However, Italy  – the Eurozone’s third largest economy – not only faces political turmoil but enormous economic strife too, and a banking industry on the verge of collapse.

There has never been a better time than now for British nationals living in the EU to consolidate their retirement plans by properly investigating their expat pensions options.

Post-Brexit, sterling has fallen dramatically against the euro and for many the uncertainty surrounding expat pensions is causing understandable anxiety.

Currently, British expats living in the EU receive an annual rise in the state pension; however, this could change in the post-Brexit environment, meaning that many face the prospect of frozen pensions and as a result are giving serious consideration to the idea of returning to the UK.

While these uncertainties are not to be dismissed lightly it is worth remembering that exit negotiations are yet to begin and freedom of movement and state and expat pensions are all likely to be issues for discussion once talks do start.

A move from the UK to the Cayman Islands is, by very definition, a bold one. However, for the majority of expats who undertake such a life change, it is not one that they will regret. This is because, if you get your financial advice and wealth management in order, chances are that you will be able to enjoy all the benefits that go with living in one of the world’s true natural paradises.

Dealing with HMRC

Before any would-be Cayman Island resident leaves the UK, he or she should fill out HMRC’s form P85. This ensures that you have the opportunity to get your tax and residency status right and is particularly important if you will continue to have UK tax to pay – for example, if you have a UK-based business, a rental income, or are the director of a company.

Considerations include being listed as a non-resident landlord so that rent can be paid without UK income tax, splitting the tax year into resident and non-resident periods, and addressing the issues around capital gains tax.

The Bank of England has dealt a blow to savers, but there is good news for borrowers. The base rate has been slashed to 0.25% as part of a raft of measures introduced to stave off the threat of recession after the Brexit vote. This is the first cut in seven years. 

A recent report has revealed that the number of people still working after the age of 65 has doubled in the last 15 years.  It appears that more than 1 million people above that age are working still, representing more than 1 in 10 people.  In 2001, the number was 436,000.

Global markets have now risen steadily across the board as the volatility spike following Britain’s surprise decision to leave the EU died down and investors realised that, although unexpected, the uncertainty of the terms of Britain’s future relationship with the EU need not undermine equity markets. As for the FTSE 100, it is now 5% above where it closed on 22nd June, though 6% down in terms of dollar value (£ is 12% lower against the dollar) and the FTSE 250 is only 3% below where it was on the same day. The FTSE 250 is a far better barometer of UK economic activity than FTSE 100 and many of the stocks that were hit hardest such as the house builders Persimmon, Taylor Wimpey and Barratt made substantial gains as the new May government started to restore some stability.