Should I stay or should I go?

Over the past decade I have been in countless meetings with expatriates living in the UK contemplating the question of where they should eventually hang up their hat. We advise that the tax leg should never wag the happiness dog however for many, the after tax income on retirement has a meaningful bearing on their quality of life.

With the non-domicile regime disappearing for many in April next year this question is again at the top of people’s minds. More often than not US expatriates and others consider this last thing before they go to sleep and first thing when they wake up. There is precious little logic applied to the decision and many people consider it a dozen times over the course of a quarter and then make a decision on a hunch.
The reason people do this is that it is frankly jolly difficult to weigh up all the options, in one’s head, by oneself, in the middle of the night or first thing in the morning.

There are some currently experiencing restless nights as April 2017 looms upon them that are in the fortunate position of being wealthy on a relative basis. Ending in 2017 is the option to pay the £90k Remittance Based Charge (RMC) and to protect one’s offshore assets from UK taxation on an annual basis. As many of us know this taxation is off-settable against US taxation but that means that one’s US taxation must be greater than $130,000 per year which in turn means that one’s US income must be greater than $300,000 per year. So an individual with a $10mm portfolio that had a yield greater than 3% would consider paying the £90k per year and as such would be one of those individuals weighing up their options as the summer rolls on.

There are also individuals suffering restless nights, who maybe on paper are less wealthy. Those who have a significant amount of non-UK income (potentially US sourced income) will also be scratching their heads about the financial impact of the change in April 2017.

No matter the situation, weighing up advantages of living in the UK – family, legacy & no state tax versus the disadvantages of higher inheritance tax bands, global taxation on all assets is a tough calculation especially last thing at night.

Risk Warnings

The above article does not take into account the specific goals or requirements of individual users. You should carefully consider the suitability of any strategies along with your financial situation prior to making any decisions on an appropriate strategy.

MASECO LLP trading as MASECO Private Wealth is authorised and regulated by the Financial Conduct Authority, the Financial Conduct Authority does not regulate tax advice. MASECO Private Wealth is not a tax specialist. We strongly recommend that every client seeks their own tax advice prior to acting on any of the strategies described in this document.

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