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workhou

Expat Financal Advice Needed

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Need some advice from anyone who has lived abroad long-term.

I left the UK in 2012 because of the terrible economy to work in China. I have made a great life for myself over here and finally I'm making enough money to start investing. I recently found out though that I no longer have UK residence status despite having accommodation and family ties so I can't get an ISA or invest in the market. Foreigners don't have many options to invest in China, Chinese people only invest in property as their isn't much else. Investing in a business here is really risky. 

I need to start saving for a private pension and the long-term, but I think I screwed myself leaving the UK as I am a non-resident now. I still hold a UK bank a/cc and I have premium bonds and I am starting to look at bitcoin but early everything I know/understand though is subject to capital gains tax.  How can someone get a pension/invest from abroad? It must be possible.

Any ideas?

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12 minutes ago, workhou said:

Need some advice from anyone who has lived abroad long-term.

I left the UK in 2012 because of the terrible economy to work in China. I have made a great life for myself over here and finally I'm making enough money to start investing. I recently found out though that I no longer have UK residence status despite having accommodation and family ties so I can't get an ISA or invest in the market. Foreigners don't have many options to invest in China, Chinese people only invest in property as their isn't much else. Investing in a business here is really risky. 

I need to start saving for a private pension and the long-term, but I think I screwed myself leaving the UK as I am a non-resident now. I still hold a UK bank a/cc and I have premium bonds and I am starting to look at bitcoin but early everything I know/understand though is subject to capital gains tax.  How can someone get a pension/invest from abroad? It must be possible.

Any ideas?

I worked outside the UK on several occasions, but have been back for c.6 years.

Provided you are in employment abroad, for more than 1 tax year (6 April-5 April), you will be classed as non resident for UK tax purposes. You can return to the UK for 90 days per tax year. Unless you have genuinely severed all UK ties, you will still be regarded as domiciled in the UK, which has certain longer term tax implications. You mention having accommodation available in the UK - be careful, this is a grey area (IMHO) which could make HMRC deem you to be still UK resident. Do you really have vacant accommodation available to you in the UK?

Where do you get paid, and do you pay tax anywhere, or is it a 'tax free' deal? If the latter, it is best to open an offshore account (UK big name bank in Channel Islands is good). In the circumstances described, there is no advantage to contributing to a UK pension (no tax relief), and you will not be allowed ISAs. What you need to do is acquire assets suitable to your risk profile and long term goals. These may be shares, funds, whatever. Deal with very reputable organizations, the expat world is full of sharks trying to sell bad or even fraudulent products. Bitcoin is a disaster waiting to happen IMHO. UK based investments will not be tax free, but IMHO the charges are likely to be lower than funds based in offshore tax havens.

Don't close any UK accounts, as they are almost impossible to re-open if you are non resident. UK banks won't deal with you.

Re CGT, the law may have changed a bit on this. It used to be that if you were non resident for 5 years (maybe 7) you were no longer liable to CGT. If you are non-domiciled you also no longer pay CGT while abroad. Plan your return to the UK carefully in terms of before or after the end of a tax year, and it would be best to crystallize all investment gains, close deposit accounts etc just before you return.

Hope my comments help.

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27 minutes ago, workhou said:

Need some advice from anyone who has lived abroad long-term.

I left the UK in 2012 because of the terrible economy to work in China. I have made a great life for myself over here and finally I'm making enough money to start investing. I recently found out though that I no longer have UK residence status despite having accommodation and family ties so I can't get an ISA or invest in the market. Foreigners don't have many options to invest in China, Chinese people only invest in property as their isn't much else. Investing in a business here is really risky. 

I need to start saving for a private pension and the long-term, but I think I screwed myself leaving the UK as I am a non-resident now. I still hold a UK bank a/cc and I have premium bonds and I am starting to look at bitcoin but early everything I know/understand though is subject to capital gains tax.  How can someone get a pension/invest from abroad? It must be possible.

Any ideas?

Forgot to add about National Insurance. You can preserve your UK state pension rights and contribute Class 2 contributions which were very cheap, but I think this has changed a bit with introduction of the new pension rules. Do your own research, but the UK state pension is a good deal, if you think it will be honoured in years to come.

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That's great advice thanks for posting. By accommodation it would be staying with my parents I don't have property. I still have a UK account. Paying the NI something I overlooked, thanks. I earn my money here tax free so I don't want to get taxed by the UK!

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5 hours ago, workhou said:

That's great advice thanks for posting. By accommodation it would be staying with my parents I don't have property. I still have a UK account. Paying the NI something I overlooked, thanks. I earn my money here tax free so I don't want to get taxed by the UK!

I don't think you will have problems with HMRC re non residence. HMRC keep changing their views. It used to be that full time work abroad for a full tax year was all that was required, but 6-7 years ago they seemed to have brought back the issue of whether you still had an available home in the UK. It affected people (like me) whose wives had returned early to the family home. The rules are grey and rarely worth challenging.

I would re-iterate the warning about investing through reputable companies etc. In my experience, places where many expats work are the happy hunting ground of investment brokers looking to sell high commission unsuitable products. They may be very friendly, personable and well known in expat communities, but are only selling investments that give themselves good returns.

A final comment - keep good records of your travels, passports are not often stamped any more. Keep a file of boarding passes, cash transactions, residency permits, everything. You never know when/if you might need to refer to them or use as evidence.

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I'd seeiously consider returning to the UK for a year and go self employed in anything you can. This way you can then open up all sorts of accounts, investments etc. 

Go back to China and pick up where you left off if possible. Keep.all accounts open. Submit an annual self assessment for any profits on UK savings and investments. This is assuming you are not going to make 100,000s of £.

Pay your NI stamp too of course. 

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22 hours ago, ExiledMatty said:

I'd seeiously consider returning to the UK for a year and go self employed in anything you can. This way you can then open up all sorts of accounts, investments etc. 

Go back to China and pick up where you left off if possible. Keep.all accounts open. Submit an annual self assessment for any profits on UK savings and investments. This is assuming you are not going to make 100,000s of £.

Pay your NI stamp too of course. 

I see no advantage to returning briefly to the UK. I would suggest dealing with the Channel Islands branches of big name banks or investment houses. I used to use Generali.

As a non tax resident, you are not covered by the NHS during your trips back to the UK, except for emergency treatment. Of course doctors and NHS dentists may not know you are non-resident. You may continue to accrue years towards the 35 required for a state pension (https://www.gov.uk/national-insurance-if-you-go-abroad)

However, you may think you will return to the UK and work for a considerable time before retirement, in which case you will get some or all of those 35 years by compulsory NI deductions, so voluntary contributions while an expat may be pointless.

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On 1/14/2017 at 0:46 PM, onlooker said:

I worked outside the UK on several occasions, but have been back for c.6 years.

Provided you are in employment abroad, for more than 1 tax year (6 April-5 April), you will be classed as non resident for UK tax purposes. You can return to the UK for 90 days per tax year. Unless you have genuinely severed all UK ties, you will still be regarded as domiciled in the UK, which has certain longer term tax implications. You mention having accommodation available in the UK - be careful, this is a grey area (IMHO) which could make HMRC deem you to be still UK resident. Do you really have vacant accommodation available to you in the UK?

Where do you get paid, and do you pay tax anywhere, or is it a 'tax free' deal? If the latter, it is best to open an offshore account (UK big name bank in Channel Islands is good). In the circumstances described, there is no advantage to contributing to a UK pension (no tax relief), and you will not be allowed ISAs. What you need to do is acquire assets suitable to your risk profile and long term goals. These may be shares, funds, whatever. Deal with very reputable organizations, the expat world is full of sharks trying to sell bad or even fraudulent products. Bitcoin is a disaster waiting to happen IMHO. UK based investments will not be tax free, but IMHO the charges are likely to be lower than funds based in offshore tax havens.

Don't close any UK accounts, as they are almost impossible to re-open if you are non resident. UK banks won't deal with you.

Re CGT, the law may have changed a bit on this. It used to be that if you were non resident for 5 years (maybe 7) you were no longer liable to CGT. If you are non-domiciled you also no longer pay CGT while abroad. Plan your return to the UK carefully in terms of before or after the end of a tax year, and it would be best to crystallize all investment gains, close deposit accounts etc just before you return.

Hope my comments help.

This man knows what he is talking about. The rules do change with time, so you need to check for yourself.

Any free news letters from financial companies just throw it in the bin. If I can't see it listed on the back of the Financial Times, I would not buy it. 

I have met the sharks trying to sell me stuff and I wasn't even in big expat communities, and I wasn't looking for advice. And I am not made of money and I don't look like I am either, yet I still attracted some sharks? 

Don't let the UK account get to inactive or they will close it, I had a tough time reopening account in UK. Its getting much more difficult now. I also had the same thing in Singapore stupidly I closed a good account with Standard Chartered. Wouldn't touch me now. HSBC in Singapore was possible but with US$50,000 but I didn't have the cash to do it at the time. I might try again. It is one of the countries least likely to suddenly change the rules (especially for Asia). Also they used to have different foreign currencies USD, pounds, swiss francs etc.

Diversify where you hold cash accounts and which currency. I would go with British banks in Singapore and Channel Islands but that is my choice.

Don't put all your eggs in one basket.

 

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