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What’s the most tax efficient way for an expat to save for retirement?

Financial discussion for any financial queries for Expats
dspp
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Re: What’s the most tax efficient way for an expat to save for retirement?

#149820

Postby dspp » July 3rd, 2018, 9:44 pm

DiamondEcho wrote:Thanks DSPP, but alas companies like this need such thorough ID checks these days (like embassy certified copies of passports etc) before they'll interact with you, that there will not be enough time for hurdles like that. So right now I'm thinking I'll just unwind the position and then/likely buy it back 30/+ days later. It might be better to face a present gross trade cost of a couple of £k, than a future CGT cost of many multiples of that.

... shame the UK tax code is so impenetrable...


You may be surprised. They are at the personal end of the spectrum. However I would sell and rinse if I were you, perhaps by staging within something similar but not exactly the same.

regards, dspp

DiamondEcho
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Re: What’s the most tax efficient way for an expat to save for retirement?

#149871

Postby DiamondEcho » July 4th, 2018, 8:10 am

dspp wrote:You may be surprised. They are at the personal end of the spectrum. However I would sell and rinse if I were you, perhaps by staging within something similar but not exactly the same. regards, dspp


Thanks. I was in contact with three advisors recently, with a view to sorting out the best account/tax structure for the future, before I relo back into the UK, but the 'pre' ID requirements, even before getting some suggestions floated, led me to give up. Once I'm back though, I am going to get tax-efficiency [etc] sorted out for good, so will be coming back to this topic in future.

I've considered selling and re-investing in the same sector, I'll look into this today, AZN is the obvious parallel to GSK in the pharma sector, but I'll approach it with a blank sheet and see what comes up. Another option is re-investing via top-ups across existing holdings, well, ones that currently appear robust. I'll see how it looks. ...Or an outright new 'chip' in a new sector, but it'd have to screaming at me pretty clearly for that I think.

I wonder if the 30-day sale>repurchase rule even applies if you're non-resident. Ah well, I suppose the IR are achieving what they perhaps intended, not understanding their rules, so we gold-plate what we fear they might be.

p.s. re: 'similar but not the same' - there's a thought, wonder if there is any mileage in switching into the ADR's - or if that would open up it's own IRS/tax issue. I'll see...

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Re: What’s the most tax efficient way for an expat to save for retirement?

#150164

Postby SeagoonN » July 5th, 2018, 12:34 pm

Here's a thought on the 30-day issue:

If you are non-resident and you sell UK shares and then buy them back, even on the same day, what interest would HMRC have in those transactions? Presumably none whatsoever as you are just a "foreign" investor and any tax/CGT implications in your country of residence are your lookout.

Obviously, HMRC cannot enforce the 30-day rule on a non-resident as that is outside their jurisdiction so the only question that remains is can they enforce it on someone who subsequently becomes resident within 30 days? I would have thought not as the original sale/buy-back occurred while being non-resident. I also doubt that your broker sends a report to HMRC each year detailing all the transactions relating to "Mr DE of Bangkok". After all, why would they? Even if they did why would HMRC be in the slightest bit interested?

However, this whole 30-day thing may not be an issue if you are deemed to be non-resident during the tax year in which you return to the UK. There is a long HMRC document about residency at:

https://assets.publishing.service.gov.u ... 078500.pdf

Basically, if you meet one any of the automatic overseas tests for a tax year, you are automatically non-resident for that year, even if you have arrived part-way through that year. Have a look and see if that makes things any easier.

Regards,
Neddy

jaizan
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Re: What’s the most tax efficient way for an expat to save for retirement?

#176651

Postby jaizan » October 27th, 2018, 9:25 pm

If you are working in Thailand, why not look at investing it in Singapore ?

They don't tax your dividends AND I believe if you are not resident there, you don't pay capital gains tax either. Although you certainly want to check the capital gains point.
I have also read that Thailand doesn't tax you on overseas income. You want to check that by an independent source too.

So potentially quite a good tax situation.

Obviously if you return to the UK, then it's not as good as having an ISA, but you can only contribute to an ISA if resident in the UK.
On the other hand, if Corbyn got elected, then Singapore is about the right distance away & there would not be much incentive to come home.

I opened a bank account and a broking account in Singapore as a back up plan, just in case they screw our economy up to the extent where capital controls are reintroduced. Obviously this is all subject to UK taxes whilst I am living here.

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Re: What’s the most tax efficient way for an expat to save for retirement?

#211143

Postby Fletchsmile » March 28th, 2019, 7:21 pm

Old-ish thread but the most tax efficient way to save/invest as an expat will depend on the country you are in, where you are tax resident, where you're from etc.

As OP specifically asked about Thailand, suggest looking up:

Long Term Equity Funds (LTFs). You can obtain tax relief at your marginal rate of Thai tax. No capital gains tax. Select non-dividend paying versions as dividends can be elected to be taxed at a flat 10% WHT or your marginal rate of tax. Minimum holding period now 7 calendar years, in practice can be just over 5 years in total: eg Buy Dec Year 1, redeem Jan Year 7. Invests at least 70% in Thai equities
Max investment is 15% of your income or THB 500k whichever is lower

Retirement Mutual Funds (RMFs): also obtains tax relief at your marginal rate of tax. No CGT or income tax (div paying versions not usually available). Wider range of investment funds, but you must hold at least 5 years and until you're 55. Wider range of funds than LTFs. can include global equities, thai equities, bonds, gold funds, property funds etc. Once started you need to invest a small amount each year to avoid penalties - ball park THB 5,000 a year. Bit more complicated but that's the basics
Max investment is 15% of your income or THB 500k whichever is lower. But also need to taken into accout any other pension fund contributions eg employers schemes

They're basically funds/ mutual funds/ unit trusts that have their own individual tax wrappers

Thailand is generally very friendly for investments form an income tax and CGT perspective. Even basic mutual funds/ unit trusts tend to have no CGT and select accummulation units you avoid any income taxes

TahiPanasDua
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Re: What’s the most tax efficient way for an expat to save for retirement?

#212026

Postby TahiPanasDua » April 2nd, 2019, 11:53 am

DiamondEcho wrote:
TahiPanasDua wrote:1. As stated above, expats with non-resident status are not subject to CGT except for residential property. I sold and immediately rebought all my shares that were in profit in the tax year before returning.


Hi TP2, I'm reading this thread with interest as we're due to return to the UK in a month.
I was interested to see your comment about washing out a capital gain via 'sale and immediate repurchase'. I understand that there is a 30-day bed and breakfast delay in the UK these days. Ie you have to be out of the position that long to wash any CGT. Does this B+B period/rule not apply if done while non-resident? Ie as a Brit after 10 years away could I wash a position within say a day and be clear of UK CGT?


Hi DE!

I am so embarrassed. It has taken me months to reply as I didn't see your post. Also, by now you are back in the UK and my comment is now totally useless.

Here goes anyway! You don't need to wait 30 days to buy back shares you sold as long as you do it in the previous tax year while still abroad. Those capital gains don't exist as far as HMRC are concerned as they are not taxable. As a result you don't really need to buy back something different but similar.

Small caveat, I am no tax expert but am pretty certain I am correct.

Sorry again,

TP2.


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