Brit in Dubai. Best tax-sheltered option? AED to GBP then Hargreaves or AED to an offshore broker?

[TINMAN29]

Hello everyone,

I am a Brit, living and working in Dubai, retiring in the UK. I am trying to find the best tax-sheltered option re investing.

I currently send AED to GBP then invest using HL (Hargreaves Lansdown).
ETF's have a zero % platform fee and cost £11.95 per buy/sell (8 a year).

I am toying with the idea of whiching to IB (Interactive Brokers).
I'd transfer AED to GBP or USD (it is a pegged rate) and IB have low fees.

Are there any pros and cons to either of the above that I might be missing?

Being an expat, ISAs are out of the question however would I still get the £11,850 personal allowance?

Interest, capital gains, dividends, income – will IB help avoid these from being taxed?

I am hoping someone has insight or experience re this.

*i would like to get the tax and platform sorted, then reallocate my portfolio into VWRL (equity) and VGOV (bonds)

Many thanks!
TM29

[DiamondEcho]

I am a Brit, living and working in Dubai, retiring in the UK. I am trying to find the best tax-sheltered option re investing.
I am toying with the idea of whiching to IB (Interactive Brokers). I'd transfer AED to GBP or USD (it is a pegged rate) and IB have low fees.
Are there any pros and cons to either of the above that I might be missing?

If you live in Dubai and remain there AFAIUI you wouldn't be liable to Dubai/UAE income/CGT taxes. But Interactive Brokers offer no tax-advantaged status for when you return to the UK, or other countries where you would be liable for local taxation. That's from the viewpoint of having been an expat customer for about 10 years now. If you happen to have found IntB offer UK tax incentivised wrappers I'd be interested myself, so pls let me know![/quote]

IntB are very good, and offer a huuuge product range and low fees. That said their reporting and trading system is huge, so you might find it a learning curve to get going with an a/c, unless you work in finance perhaps!
I found IB VERY competitive on FX rates/fees/share-px spreads the lot. But to confirm this yourself, choose it and a couple of competitors and see what the FX rate spread and fees on each would be for a typical FX transfer you have in mind.

Being an expat, ISAs are out of the question however would I still get the £11,850 personal allowance?

You're right, AFAIUI, and I'm just home from my last 10 years abroad, so did look into this. You can't access UK tax advantaged accounts whilst resident abroad.
I'm not an accountant, but yes I've always been entitled to the personal allowance whilst filing returns from abroad.

Interest, capital gains, dividends, income – will IB help avoid these from being taxed? I am hoping someone has insight or experience re this. *i would like to get the tax and platform sorted, then reallocate my portfolio into VWRL (equity) and VGOV (bonds)
TM29

In the UAE yes, but only because you're not liable in the first place. In the UK they certainly won't (x-ref my point^ about UK tax-wrappers). In fact IME the moment they know you've changed country they'll send a bunch of forms and apply witholding tax to income if is then applicable.

[TINMAN29]

Not exactly answering your questions, but for sending GBP home, look at using XE.com. I have been in Korea, Oman and now Australia. So sending GBP home regularly is important to me. I understand XE.com is a white label version of HiFX.

I will give them a try. I actually have a comparison spreadsheet of brokers. HiFX, TORfx, Exchange4free and my favourite, CurrencyFair.

[TINMAN29]

Not exactly answering your questions, but for sending GBP home, look at using XE.com. I have been in Korea, Oman and now Australia. So sending GBP home regularly is important to me. I understand XE.com is a white label version of HiFX.

I will give them a try. I actually have a comparison spreadsheet of brokers. HiFX, TORfx, Exchange4free and my favourite, CurrencyFair.

I think you'll find XE compares favourably. No transaction fee, about 0.5% below the XE.com "official" rate.

I tried but they don't offer UAE as a 'Country of residence' unfortunately.