News & Insights

As an expat financial services specialist, Blacktower is always keen to hear about Britons who are making the decision to live permanently abroad, but one recent news story has left us, like many others, feeling a little perplexed, to say the least.

Permanent expats in France will soon be able to count leading Brexiteer Nigel Lawson amongst their number as the former UK chancellor of the exchequer has applied for his carte de séjour (permanent residency card).

The former Conservative cabinet member and one-time chair of the "Vote Leave" campaign has been branded a hypocrite by many in the British media, as he seeks full resident's rights while he lives, as he has done so for many years, in his Gascony mansion in south-west France.

Your des-res might be a gorgeous sea-front apartment overlooking the med, or a rural stone cottage nestled amongst the vineyards of Burgundy, but wherever you live, once you are settled, understanding whether you are domiciled, non-domiciled or resident can be a bit confusing. However, clarity is essential: the amount of tax you pay hinges on knowing the difference and the relevance of each non-dom status versus residency status.

Firstly, don't just guess your residency or non-dom status, because if you get it wrong, you could pay too much tax or pay it in the wrong place, and failure to pay can lead to large fines and penalties. Sadly, mis-payments are not tolerated; your tax planning may be well-intentioned, but if you don't pay the correct amount of tax in the appropriate jurisdiction, you could be in hot water, so it is vital to get it right.

Generally, we recommend that you speak to a financial adviser working in your local region who will understand the jurisdictional rules applicable to your location and personal situation, but as a brief guide, read on and we will explain the fundamentals.

The Pensions Regulator (TPR) has recently acknowledged that pension scammers are being caught out and hindered by action from the government, regulators, the Work and Pensions Committee, and the wider industry, but added that vigilance is still needed.

On 22 May, speaking at the Association of Member-Directed Pension Schemes' conference, TPR's Anthony Raymond said that the plan to ban cold-calling is a welcome step-forward in protecting consumers, and that a recent High Court ruling, which saw four scammers ordered to repay £13.7million they had swindled from 245 victims, sent a clear message to fraudsters.

However, while this court action to regain funds for scam victims is brilliant news, the recommendations for pension savers are clear: stay aware of fraudulent activity and seek independent, regulated pensions advice before signing anything.

Research by the Alzheimer's Society suggests that two-thirds of people who have sought financial advice have a lasting power of attorney (LPA) in place, but this, potentially, means a significant proportion of Brits do not have the protection that LPA offers.

Unfortunately, there is a common misconception among many expats (highlighted in a survey of UK expats conducted by Old Mutual International in 2017) that a spouse, child or financial professional can automatically sign documents and manage the welfare and monetary matters of a person who loses mental capacity. This is not the case; your family members could be left vulnerable should you become unable to manage your affairs without having LPA in place.

Good expat financial advice would generally advocate local legal advice to help ascertain whether or not an existing LPA, i.e. one that was drawn up in the UK, is valid in your location of residence. Generally speaking, however, common law jurisdictions will recognise a British lasting power of attorney, but it is always worth checking.

Malta's favourable residency schemes are likely to stay in place for some time after Brexit and this has propelled the Mediterranean archipelago to the top of the list for some UK citizens who are considering their options for relocation in the near future.

And it's not just retirees who find this destination appealing. Career-movers will find a number of growth industries on the island; however, wage levels are fairly low when compared to the cost of living so you may be unlikely to make your fortune on the island if you are an unskilled worker. Financial advice in Malta is essential if you wish to make the most of your income and assets.

To help you make a start, we have compiled a list of top tips for financial planning in Malta if you have recently made the move or you are considering making it your main place of residence.

Statistics from the Office for National Statistics (ONS) have shown that a record number of savers are now members of workplace pension schemes.

The figures show that the proportion of employees who are contributing to a company pension has risen significantly in the five years since Auto-Enrolment (AE) began.

AE was introduced in 2012 and makes it compulsory for employers to automatically enrol all eligible employees into a pension scheme unless the employee actively opts out. An employee is eligible for AE if they are aged between 22 and the state pension age and have a salary of more than £10,000.

In 2012, prior to AE, 47 per cent of UK employees were enrolled on a company pension scheme. This figure has now risen to 73 per cent in 2017. In other words, there are over 9.5 million more people saving for their retirement than there were five years ago, and it's mainly thanks to AE.

Rapid developments in IT systems, financial databases and data-sharing platforms over recent years now mean that it is easier than ever for nation states to share and exchange financial information relating to the investments, income, taxes, savings accounts, properties and pensions of individuals who have assets placed in multiple locations across the world.

Inevitably, this also means it now crucial to ensure you disclose your full list of assets whenever required.

As a British native you might be a little complacent in this regard. The UK has one of the most stringently and best-regulated financial advice sectors in the world, and in many cases if your adviser fails to disclose your full spectrum of assets and interests it is he or she, rather than you, who will be liable.

Recent news about the 30% tax ruling in the Netherlands could have substantial implications for British expats and their financial planning and wealth management strategies.

The 30% tax ruling for expats in the Netherlands enables employers to offer working expats 30% of their salary tax-free as long as they meet certain requirements. The intended aim is to encourage highly skilled workers from around the globe to bring their expertise to the Netherlands. After all, relocating to the Netherlands is not cheap, and the tax advantage is there to help offset all the expense that comes with relocating. There are approximately 60,000 expats who currently claim the tax break.

As we reported last year, the tax break came under fire in a report published by the Dutch research bureau Dialogic for being far too generous and, therefore, costing the Dutch government too much money for it to be sustainable. When published in June 2017, the report suggested several reforms to the system, including shortening the number of years that expats could claim the tax-relief from eight years to five. This was because research carried out by Dialogic found that the vast majority of expats making use of the benefit (80%) claimed it for fewer than five years; less than 10% actually claimed the benefit for the full eight years.