29.01.2010 - In some countries this can remove some of the most tax effective solutions that would have been available to them if they’d planned in advance.  The old adage is always true – it’s never too early to start planning. 

Many British expatriates do return to the UK at some point, for a variety of rea­sons. 

Many foreign nationals living in the UK can enjoy a far more beneficial tax regime compared to British nationals living there.  By planning prior to returning to the UK, British expatriates can benefit from tax advantages once they have returned that would not otherwise be ordinarily achievable by UK residents.

By taking advice before you leave Spain, it is possible to arrange your investable assets in a manner where you can enjoy tax free growth and income as a UK resident, irrespective of how much money you invest.  Other than National Savings Cer­tificates, Premium Bonds and annual ISA allowances, there is no other mainstream UK investment available to UK residents that could come close to the tax benefits returning expatriates can enjoy provided they plan early enough before their return.

Advantages can also be created for returning ex­patriates with deferred UK pensions, pension plans in drawdown and those cur­rently in a QROPS, should they look to return to the UK at some point. 

The key to making this planning most effective is to start as early as pos­sible, even if you aren’t sure whether you’ll return to the UK or not.  If you don’t return but have improved your Spanish tax position, that’s a bonus.

Even if you never return to the UK, you still need to think about the UK tax impli­cations for your money.  Most British nationals retain their UK domicile even though they’ve lived overseas for many years.  If HM Revenue & Customs can find any evi­dence to create and support a view that you had an inten­tion of returning to the UK - even though you didn’t - they will assess your worldwide estate for UK inheritance tax.  Effective planning can be put in place to help avoid this issue.

Aside from inheritance tax, your money may even­tually find its way back to the UK if your heirs are UK resident.  Again, this is something that you can plan for during your lifetime while you are an expatriate, to ensure that after your death your assets are held in a very tax effective manner for your family. 

If you’re thinking about returning to the UK, plan ahead before you go to es­tablish how to protect your wealth from the various taxes you will face - otherwise some of the valuable tax planning opportunities may be lost.  Waiting until you are back in the UK often results in you paying more tax than you need to.

For advantageous tax planning relating to the UK it is essential that you consult a firm which is authorised and regulated both here in Spain and the UK, such as Blevins Franks Financial Management.

Even if you never return to the UK, you still need to think about the UK tax implications for your money

To keep in touch with the latest developments in the offshore world, check out the latest news on our website www.blevinsfranks.com
By David Franks,
Chief Executive,
Blevins Franks



This article appears in the print edition 608 of Island Connections

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