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How much is enough?

Including Financial Independence and Retiring Early (FIRE)
Lootman
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Re: How much is enough?

#112095

Postby Lootman » January 20th, 2018, 2:48 pm

TheRIT wrote:We're looking at 2 locations with the final decision needing to be made within a couple of months:
- Spain. Dividends and capital gains would be taxed on both ISA and Trading Account. Depending on level of wealth could also see a wealth tax.
- Cyprus. No CGT on investments listed on regular stock exchanges. Also if you're a non-domicile of Cyprus (we are) then no 'tax' (called a Special Contribution for Defence) on dividends/interest for the first 17 years of residency. No wealth tax either. Interestingly they do have CGT on immovable property situated in Cyprus (with a tax free limit) so if you want to live in a big house then this could be a consideration if Cyprus gets some house prices gains/inflation.

Two obvious low tax destinations are Dubai and Hong Kong. Neither has CGT or IHT. Other nations that don't have IHT include Australia, Austria, Canada and even tax-loving Sweden, although other taxes can be high in those places. Various central American nations offer low taxes and easy citizenship to economic migrants e.g. Costa Rica, Belize, Panama.

Or the good ole' USA. After Trump's tax reform, it has relatively low taxes especially if you choose a State with no State income tax (AL, FL, NH, SD, TN, TX, WA, WY). Capital gains and dividends are taxed at 15%, and there is no Estate Tax unless you leave more than $11 million.

In such a situation I would close any ISA or other UK account and move the money from the UK. That way a future punitive and confiscatory UK government could not touch your assets.

scrumpyjack
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Re: How much is enough?

#112120

Postby scrumpyjack » January 20th, 2018, 3:54 pm

Might be worth looking at Portugal. They have introduced a 10 year tax holiday on foreign income.

https://www.blevinsfranks.com/news/arti ... e-pensions

Apparently it has mightily annoyed the French as loads of the French are retiring to Portugal and getting their pensions tax free!

Lootman
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Re: How much is enough?

#112133

Postby Lootman » January 20th, 2018, 4:23 pm

scrumpyjack wrote:Might be worth looking at Portugal. They have introduced a 10 year tax holiday on foreign income.

https://www.blevinsfranks.com/news/arti ... e-pensions

Apparently it has mightily annoyed the French as loads of the French are retiring to Portugal and getting their pensions tax free!

Knowing how tax-happy the French government is, I would have thought they would tax those pension payouts at source, withholding whatever rate of tax they deemed should apply.

Pensions are difficult to move in the same way you can move cash and securities.

I like your Portugal idea. Hadn't thought of any EU nation as being low-tax, but that deal is attractive. I like Portugal as a nation so will look into it.

TahiPanasDua
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Re: How much is enough?

#112196

Postby TahiPanasDua » January 20th, 2018, 9:59 pm

Lootman wrote:
scrumpyjack wrote:Might be worth looking at Portugal. They have introduced a 10 year tax holiday on foreign income.

https://www.blevinsfranks.com/news/arti ... e-pensions

Apparently it has mightily annoyed the French as loads of the French are retiring to Portugal and getting their pensions tax free!

Knowing how tax-happy the French government is, I would have thought they would tax those pension payouts at source, withholding whatever rate of tax they deemed should apply.

Pensions are difficult to move in the same way you can move cash and securities.

I like your Portugal idea. Hadn't thought of any EU nation as being low-tax, but that deal is attractive. I like Portugal as a nation so will look into it.


You earlier discussed Hong Kong. It has no inheritance, capital gains or dividend taxes and income tax is a paltry 15%. If anything sounds too good to be true it usually is. It's actually a grand illusion. The Hong Kong government does not live on air. They need taxes like any other government and are able to maintain the façade of low/no taxes by manipulating property to ensure high prices. The government owns all land and, for example, sells land at enormous prices by creating and maintaining false scarcity. Ask anyone in Hong Kong how much they paid for their tiny flat or how much rent they pay. It is eye-watering. That's the real tax. Ideally then, you have investments there but live elsewhere. I know someone very very very well who does that!

My thoughts on another issue. This whole thread, "How Much Is Enough?" could be poorly titled. Even after you have saved a massive sum, have achieved a 2.5% withdrawal rate, have several years cash in the bank, are inflation proof and have a healthy amount set aside to cover care homes, for the vast majority of people even that will never be enough. I think it is human nature. If we are honest, for the vast majority of us no amount is ever enough. I think a more suitable title is "How Much Is The Minimum?" Even that title is inadequate as "enough" and "minimum" are not dissimilar in this context. Anyone got a better suggestion?

TP2.

RececaDron
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Re: How much is enough?

#112201

Postby RececaDron » January 20th, 2018, 10:28 pm

TahiPanasDua wrote:This whole thread, "How Much Is Enough?" could be poorly titled. Even after you have saved a massive sum, have achieved a 2.5% withdrawal rate, have several years cash in the bank, are inflation proof and have a healthy amount set aside to cover care homes, for the vast majority of people even that will never be enough.


Perfect.

The "vast majority" are welcome to carry on grafting. If by doing so they generate lots of tax revenues, swell corporate revenues and profits, and generally make the world go round, then all the better.

Crack on!

DiamondEcho
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Re: How much is enough?

#112667

Postby DiamondEcho » January 22nd, 2018, 10:12 pm

'How much is enough?'
I used the budgeting spreadsheet in MoneySavingExpert. And 1) input all my current outgoings. That gave me a good view of where I currently stand. Then I created a 2nd version, building up an expense line-by-line budget for what I aspire/need to have in retirement.

Might sound a horrible process, but I found it verging on 'liberating'.

umeca74
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Re: How much is enough?

#117775

Postby umeca74 » February 13th, 2018, 7:00 am

TheRIT wrote:- Cyprus. No CGT on investments listed on regular stock exchanges. Also if you're a non-domicile of Cyprus (we are) then no 'tax' (called a Special Contribution for Defence) on dividends/interest for the first 17 years of residency. No wealth tax either. Interestingly they do have CGT on immovable property situated in Cyprus (with a tax free limit) so if you want to live in a big house then this could be a consideration if Cyprus gets some house prices gains/inflation.


having made the move to Cyprus 2 years ago, I can confirm all these assertions but the "tax break" for non-domiciles is 10 years, not 17. Perhaps in 10 years they will have sorted out the Turkey problem so defense tax that eats into dividends will be abolished - but I wouldn't hold my breath for that :)

TheRIT
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Re: How much is enough?

#118252

Postby TheRIT » February 14th, 2018, 7:57 pm

umeca74 wrote:
TheRIT wrote:- Cyprus. No CGT on investments listed on regular stock exchanges. Also if you're a non-domicile of Cyprus (we are) then no 'tax' (called a Special Contribution for Defence) on dividends/interest for the first 17 years of residency. No wealth tax either. Interestingly they do have CGT on immovable property situated in Cyprus (with a tax free limit) so if you want to live in a big house then this could be a consideration if Cyprus gets some house prices gains/inflation.


having made the move to Cyprus 2 years ago, I can confirm all these assertions but the "tax break" for non-domiciles is 10 years, not 17. Perhaps in 10 years they will have sorted out the Turkey problem so defense tax that eats into dividends will be abolished - but I wouldn't hold my breath for that :)

Are you sure it's 10 years and not 17 years? Would be interested in your information source.

Deloitte, https://www2.deloitte.com/content/dam/Deloitte/cy/Documents/tax/CY_Tax_TaxFacts2017EN_Noexp.pdf, state "Individuals are subject to special defence contribution if they are both Cyprus tax resident and Cyprus domiciled. An individual is domiciled in Cyprus for the purposes of special contribution for defence if he/she has a domicile of origin in Cyprus as per the Wills and Succession Law (with certain exceptions) or if he/she has been a tax resident in Cyprus for at least 17 out of the 20 tax years immediately prior to the tax year of assessment."

Blevins Franks, https://www.blevinsfranks.com/news/article/living-in-cyprus-financial-benefits, state "Since July 2015 non-Cyprus domiciles do not have to pay defence contributions. Generally, you will be considered Cyprus-domiciled if you were born in the country or you have been resident for 17 out of the last 20 years. So most UK expatriates will escape this levy for their first 17 years of residence."

Would you be prepared to share some of your good, bad and ugly views of Cyprus? I've visited a few times and tried to do as much research as possible but until you live somewhere you of course never really know.

umeca74
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Re: How much is enough?

#118292

Postby umeca74 » February 15th, 2018, 6:37 am

as you see, "17 years" defines the eligibility, but 10 is the actual period of SDT grace period


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