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Financial considerations of becoming self-employed

Many people, at one point or another, think about leaving the ranks of conventional employment to start their own business. Sometimes the proposed business venture will be within the same industry and sometimes it will be a complete departure from their career to date. Taking the plunge into the world of self-employment can be scary but also incredibly rewarding. After all, being your own boss allows you to build something meaningful and should provide you with some flexibility that is often difficult to find when working for someone else. Giving credence to some of the important financial considerations can help you properly prepare for the transition.

Value Investing – an update

In June this year, Warren Buffett made a deal to provide financing to Canada’s Home Capital Group (HCG) and also purchased a stake in the company. While other investors were selling out of Home Capital because of a run on deposits in Canada’s number one lender of residential mortgages to borrowers with poor credit ratings, Buffett was buying in. He secured generous terms on his loan and purchased his stake at a steep discount of 33% on the stock’s previous closing share price. Time will tell if Buffett’s investment will be successful, for now, this appears to be a good example of Buffett buying cheaply or in other words, a good “value” investment.

EIS investment for the US person in the UK

Historically UK pensions have been a good way to achieve UK tax relief and it is also an opportunity for US persons living in the UK to efficiently use their excess foreign tax credits on their US tax returns.  However, with the introduction of the tapered allowance for new pension contributions from tax year 2016/17, high earners are now restricted in their ability to make sizeable contributions and have fewer opportunities to seek tax relief.

When is a trust classified as a US Trust versus a Non-US trust?

There are many different considerations that come into play regarding trusts, depending on the type of trust you own and the tax status of the individuals who settle the trust and retain an ongoing benefit from the trust. As such, it is often important to review some of the basic rules associated with what makes a trust a US trust as opposed to a non-US ‘foreign’ trust.

Total eclipse of the sun

A little over two weeks ago the coast of Oregon paid host to a total eclipse of the sun.  It began at 9:06am local time, when the sun’s glaring disc started to develop a small but growing dimple.  By 10.19am the sun’s indomitable force was reduced to a bizarre glow, a doughnut of light in the sky punched through the middle with cosmic blackness, as a curious dusk temporarily descended on the millions that had gathered to witness the event.  Total eclipses of the moon are rare, and worth celebrating, and those that have witnessed them profess to never forgetting them.  We now understand the science behind them, but ancient cultures saw dragons of the sky devouring their sun, and tried to frighten them away with whatever weapons were to hand.  Or they represented great omens of the future, tools for fortune tellers and soothsayers alike to work their magic.

Insurance Planning

Make protection a priority
Every day in the news, we are bombarded with stories of loss and tragedy. I often find myself thinking of the family members who are left behind when someone suddenly dies. The emotional impact of the death or disability of a loved one is traumatic in itself. However, amidst their grief, families affected by tragedy must continue to pay their bills, care for children and attend to mundane financial considerations. If the primary earner of a family dies prematurely or is seriously disabled, this can have a catastrophic effect on a family’s financial stability.

You have moved to the UK – Now what?

As an American living in the UK, almost nothing related to your financial affairs is easy. The consequences of seemingly simple decisions – such as how to pay for a new home or purchase a mutual fund – may create unnecessary tax charges and complexities. There are a number of key milestones that occur, from the time you arrive in the UK to the time you approach retirement. Many of these changes will impact the appropriate wealth management strategies for American expats. Understanding how rules will change for you over time will allow you to plan ahead and make prudent financial decisions. We begin these series of articles with some initial considerations for your first three years in the UK.

The role of QDOTs for bi-national estate planning

There can be some great planning advantages in the case of a bi-national couple where one spouse is American. Opportunities often abound, for example, in choosing to own certain assets in either spouse’s name to optimise the tax implications for either US or UK purposes. For instance, the non-US spouse could take advantage of some of the UK tax-advantaged accounts and asset ownership structures in the UK that are generally not beneficial for a US person, whilst the US spouse could focus on utilising US tax-efficient vehicles.