Edward Roebuck
Chartered MCSI

Wealth that moves with you

We understand that international expats regularly move between different countries and tax jurisdictions. Our Cross Border Wealth Management service can help you set up portable investment solutions, that travel as easily as you do.

✓ tax-efficient investments

✓ globally portable solutions

✓ cross border wealth management

Helping you cross borders:

Do you have a number of pensions, bank accounts, investment and insurance products, spread across multiple providers and countries?

Investments that are tax efficient in one country, may not be as favourably treated in the next.

We’ll help you ensure your wealth is in the right structure for the country you move to.

Where possible we’ll help you consolidate your different arrangements into a single easy to manage solution, that you can travel with you.

Planning an international move?

One of the biggest challenges for expats is understanding how to structure their income and wealth to support their future lifestyle and combat inflation.

Whether you’re retiring in Spain, or starting an exciting new job in Dubai, it’s essential to keep your finances on track.

When you leave your home country, many of the retirement savings that happen by default, like pensions, stop. As an expat it’s up to you to save for the future.

We can help you explore your options to manage your wealth for the long run, and stay on track for retirement.

Common Problems

Some of the most common issues we see, when expats move from one country to another.

  • Offshore Bonds
  • UK ISAs
  • UK Pensions
  • International Pension Plans
  • Offshore Investment Funds
  • Portugal’s Tax Blacklist
  • US Investors
  • Bank Accounts
  • German Exit Tax

Offshore Investment Bonds

An offshore bond is an investment wrapper provided by a life insurance company. It’s common for expats to misunderstand the tax consequences of taking these products from one country to another, confusing tax treatment in one jurisdiction with that of another.

Offshore bonds can be punitively taxed in many jurisdictions if either the bond itself, or the investments inside of it aren’t locally tax compliant.

Examples include:

United Kingdom – Offshore bonds which aren’t endorsed as compliant products will fall under Personal Portfolio Bond rules, and be taxed on an assumed gain of 15% annually. Even if no real gains have been made.

Before moving, in addition to having your bond endorsed, you need to dispose of individual stocks, structured products, futures, options and unauthorised investment trusts held inside of your bond.

Portugal – Non-compliant policies won’t function as a tax wrapper, taxes may be due on gains or income within the policy.

For policies issued in tax havens (like the Isle of Man, Mauritius, Cayman Islands, Puerto Rico, etc.) aggravated tax will be charged on income or gains at a rate up to 35%.

Locally complaint policies allow for tax-deferred growth, and can reduce taxation on withdrawals to 11.2%. No tax is payable on death benefits paid to beneficiaries.

France – Non-compliant policies won’t function as a tax wrapper and will be taxed at a rate of 30%.

By using an Assurance Vie policy instead, investors gain access to tax free growth, and can reduce taxation on withdrawals to 24.7%.

Spain – Non-compliant policies won’t function as a tax wrapper and will be taxed at a rate of 28%.

Modello 189 compliant life assurance allows for tax-deferred growth, and can reduce taxation on withdrawals to 19%.

Compliant policies pay tax on withdrawals at source. They don’t require additional tax reporting under Modello 720, or additional tax payments, simplifying your annual tax returns.

UK Individual Savings Accounts (ISAs)

ISAs are a UK tax wrapper which allows investors to contribute up to £20,000 per year, and invest in either cash or stocks & shares, free of tax.

But as UK tax wrappers, they aren’t recognised once you leave the UK.

This means once living outside of the UK, you need to report and pay tax on an ongoing basis for:

→ Any dividends or interest received, whether paid directly into your ISA or accumulated within an investment fund.
→ Any gains from switching investments within your ISA.
→ Any gains occurring if you transfer from one ISA provider to another in cash.
→ Any interest received on your cash ISA.
→ Surrender of your ISA and withdrawal of the funds.

Local tax wrappers may help you to shelter funds from ongoing taxation, or a general investment account may be more flexible if you regularly move country.

UK Workplace & Personal Pension Schemes

Limits to Contributions – Once you stop receiving UK pensionable earnings, you’re limited to contributing £2,880 per year to your pension for the first 5 years. You can’t make contributions after 5 years of living overseas.

Legacy Investments – Most UK Workplace Pensions use investment strategies which are only suitable if your pension is your only asset to fund retirement.

As soon as you’re an expat these ‘lifestyle strategies’ cease to work effectively. They default your pension into low growth assets, often many years before you need access to the funds. 

As legacy strategies they have been identified by the FCA as unsuitable for many investors – more here.

International Pension Plans

International Pension Plans are often treated as insurance based investments, rather than being recognised as a pension.

You may be forced to withdraw all the funds within a certain time period after retirement. This can lead to suffering extreme tax consequences, if surrendered in a taxable jurisdiction.

It also presents the challenge of ensuring your funds continue to grow to support your retirement, after the policy has been encashed.

Before retiring, or moving country, it’s essential to have these reviewed.

Offshore & Non-Reporting Investment Funds

Many jurisdictions punitively tax offshore investment funds which aren’t compliant with local tax policies on reporting and transparency.

Examples include:

UK Reporting Funds Regime

Non-UK Reporting Funds have gains taxed as income, at rates from 20-45%. Where as UK Reporting Funds have gains taxed as capital gains, at rates from 18-24%.

It’s wise to dispose of any Non-UK Reporting Funds before moving to the UK, and ensuring your investments are complaint.

Belgium – Reynders tax

Where funds invest more than 10% of assets in debt-claims (bonds) and do not fully distribute all income, investors are liable to Capital Gains Tax at a rate of 30% on the sale of funds. 

For multi-asset funds, this can result taxation of capital gains on equities held within the fund, which would otherwise be free of tax.

Switzerland

Swiss resident investors who hold foreign investment funds are reliant on the fund to report it’s Swiss taxable income to the Swiss Federal Tax Administration.

Where foreign funds don’t comply with this requirement, Swiss investors may be unfavourably taxed. What would be tax-free capital gains can be treated as taxable income.

Portugal’s Tax Haven Blacklist

Portuguese residents with accounts in many popular offshore investing jurisdictions like Jersey, Isle of Man, Cayman Islands, Gibraltar, Guernsey, Hong Kong, Bahrain, Qatar, UAE, Mauritius, Puerto Rico (and many more) will be adversely taxed.

Capital gains, dividends and interest from accounts in these jurisdictions are punitively taxed at a rate of 35%. 

Investors who would ordinarily be exempt under NHR or IFICI/TISRI regimes, will be subject to aggravated taxation where funds are held in a tax haven.

Portuguese compliant investments, can provide tax-deferred growth and reduce potential taxation on withdrawals/surrender to 11.2%.

US Passive Foreign Investment Companies

US Citizens & Green Card holders need to be particularly careful of non-US domiciled investment products.

Passive Foreign Investment Company (PFIC) rules mean, investment funds, ETFs, investment trusts, and life assurance, based outside of the US will be punitively taxed.

PFIC holders are required to provide annual tax returns to the IRS, taking an estimated 40 hours of additional tax preparation.

Tax on Bank Account Interest

In many jurisdictions (like the UK and many EU countries) interest paid on savings in your bank account, remains taxable even if you live overseas.

Whilst you may still have access to personal tax allowances, as soon as you build up a large amount of savings, or have other concerns like rental income, taxation starts to be come an issues.

It is often your responsibility to declare and pay tax on this income, rather than the responsibility of your bank. This means you may need to submit annual tax returns, and if you fail to do so, you may face penalties.

This can easily be mitigated by holding your savings in a well regulated tax-friendly offshore jurisdiction, meaning you only have to worry about tax in your country of residence, and not the country where your assets are held.

German Exit Tax

From 1st January 2025, Germany have updated their rules on exit tax to include investment funds.

Expats who’ve been resident in Germany for 7 of the last 12 years, on exiting the country will be liable for exit tax if they either:

1. Own a 1% holding of a (domestic or foreign) company for the last five years, either directly or indirectly.

2. Have units in an investment fund (domestic or foreign) with an acquisition cost over €500,000. Including ETFs and UCITS funds.

3. Shares in Special Investment Funds (Spezialfonds) of any value.

This effective tax rate levied is 25% of any gain (plus solidarity surcharges and church taxes), due when an individual ceases to be a German taxpayer.

The inclusion of investment funds, makes it preferable for expats living in Germany to avoid holding large positions in multi-asset funds or ETFs (such as Vanguard Lifestrategy or Dimensional World Allocation funds).

As each investment fund is tested individually, investors can build well diversified portfolios, using component parts of individual funds, to mitigate going over the €500,000 threshold.

cross border wealth management

Want to make sure your wealth travels as easily as you do?

Get in touch, and see how we can help you keep things moving.

Talk with an expert