Investment options for expats
Expat investments can be very different to the options available to UK residents, so it’s a good idea to become familiar with the different investment options available. It’s possible for investment options to be either onshore or offshore, and tax benefits do make offshore investment options more favourable in many circumstances. Some UK investment options, like ISAs, are unavailable to non-residents, however. It can be a good idea to obtain independent advice from a qualified financial adviser if you are unsure about the best investment decisions to make and many expats opt for a mix of investment products which are often managed by financial advisers or wealth managers. Some investment options for expats to consider include:
Offshore bonds are typically based in Guernsey or the Isle of Man and provide a wrapper for a variety of investment funds. They are a tax-efficient option as the bond is not subject to capital gains tax and income tax is deferred. This makes it possible for the investment to grow substantially over time.
In circumstances where you need to return to the UK, the offshore bonds will usually continue to grow with any requirement to pay tax.
Where investors take income from offshore bonds, income tax will be payable according to tax rules in the residence country.
Pensions and QROPS
Your pension scheme should play an integral part in your investment portfolio. Pensions may be managed by employers or by the investor and expats with large UK pensions have the option of a Qualifying Recognised Overseas Pension Scheme (QROPS) which enables expats to transfer UK pensions out of the UK.
Investing in property is often a common feature of expat investment portfolios and this can include the primary residence and any UK or overseas properties used to generate rental income. Selling your UK properties will result in a capital gains tax liability, however, so this needs to be thought through.
Likewise, if you do go ahead and invest in the UK property market, you will need to consider that the rental income accrued will be liable to UK income tax and you will need to complete a regular tax return.
Investment options for expats – where to find out more
BGA provide financial planning and wealth management advice to expats. We are happy to discuss your situation in further detail at any time so please get in touch if you would like us to help.
Read about our investment management services here.