Tax Planning News & Insights

Many ex-pats are still suffering from the cuts in income that have taken place due to the very low interest rates they continue to endure on their savings.

Well brace yourselves for more!  Any of you who rely on dividends from shareholdings to supplement your income are about to see a whole new look to the tax regime associated with them.

Dividends are annual cash payments made to holders of certain shares, they provide a vital source of income to many pensioners who rely on savings in retirement. The way dividends are to be taxed is to change from April 2016 and will see basic-rate taxpayers subject to a new levy of up to 7.5 per cent.

One of the most important parts of financial planning is the use of tax allowances. I would say at least equal to, potentially more than sound investment advice.  There are several ways to consider your tax bills both annually and in retirement…. Pay today, pay in the future, transfer to other people or reduce future tax bills today, using legal financial advice.

A common misconception is that people reduce their tax bills by using complicated, unethical tax schemes using multi jurisdictional allowances, without looking into the use of completely legitimate and simple planning. In the UK that is available for everyone.

Have you restructured your international investments?

On the 1st of January 2015, the Portuguese Tax Authorities brought about sweeping changes to its Personal Income Tax Legislation, specifically aimed at but not limited to, previously sheltered international investment structures. Six months into the 2015 fiscal tax year, there seems to be a wait and see attitude to the impending punitive tax burden that will be levied on investments held by both Portuguese nationals and Expat Tax Residents in Portugal. 

One thing I do know and that is many international and national people still live in the past, thinking Portugal is a laissez-faire country unable to, with efficacy, diligently collect its taxes. 

The offices of the taxman are not usually credited with efficiency and success. But there is one aspect of HM Revenue & Customs which is terrifyingly efficient, and that is its powerful computer program which is accessing and trawling databases of personal financial information on an unprecedented scale. 

Hands up if you still own a property in the UK, but have residential status in Tenerife, or indeed anywhere else in the world?  

If you’re one of the many thousands of expats, who decided to keep a foothold in the UK property market, ´just in case´, then potentially, you may well be out of pocket when you decide it´s time to sell.   This is yet another one of the latest steps in a series of significant changes affecting the taxation of UK residential property in recent years.   Up until the 6th of April 2015, non-UK residents have always enjoyed being exempt from Capital Gains Tax (CGT) on private residences, and also had the right to claim Private Resident Relief... regrettably for many, this is no longer an option - the rules have now changed!  Capital Gains Tax (CGT) has been extended to non-UK residents with effect from the 6th of April this year.