Migration & Working Abroad
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Emigration, Immigation and working abroad
When considering a move abroad there are many factors to consider, not least of which is the lifestyle choice in choosing where to live and work.
Some countries may be very attractive from fiscal planning point of view but might not suit everybody from a lifestyle point of view and in the end moving abroad is often a business related or lifestyle decision; however if you have the choice It is essential to consider all of the options before making a decision because there are many favourable locations with special regimes that allow you to obtain significant business benefits and tax savings when used in conjunction with the appropriate structure.
In broad terms how countries tax a person or business depends on whether the country has a:
World-wide tax system (such as the UK and USA) – under which the tax payer is liable to tax on their incomes and gains derived from anywhere in the world.
Territorial Tax system (such as Hong Kong) – under which the tax payer is generally only liable to tax on the incomes and gains earned or brought into that territory (possibly with an offset for taxation relating to extra-territorial income).
Exclusionary or special concession system– this is often a concession within a worldwide tax regime for certain classes of residents for instance resident but non-domiciled individuals (UK/Ireland) or temporary residents (Portugal) or individuals resident due to a local contract arrangement (such footballers in Spain). It can also be a regime where there is the specific exclusion of certain classes of income from the base of taxation.
Some migrants with a view to “retiring to the sun” or a “change of lifestyle” may carefully plan to leave a worldwide tax jurisdiction like the UK, spending a great deal of time and money in specialist tax advice only to move their wealth to another worldwide high tax jurisdiction such as Spain where they may then have further potential tax issues but as can be seen some countries do have fiscal options that are worth considering.
Planning alternatives to consider might include the Republic of Ireland that has a similar non dom regime to the UK but without a remittance basis charge, moving to the Isle of Man (where there are no entry restrictions and a low personal tax regime couple with zero percent corporation tax), or a territorial tax jurisdiction (like Hong Kong) or special residency regimes like Malta, Andorra and Monaco. Even countries like Spain and Portugal have special concession regimes for residents who are posted there for work purposes under these regimes they are not taxed on their international investments and activities (which may be held in say an Isle of Man company) whilst they are working under contract.
When making an individual choice, depending on where you are going to, it may be possible for your international businessor assets to be established and managed at arms length in another tax neutral jurisdiction as part of your overall planning.
Another area to consider for retirees and those who plan to move abroad permanently is pension planning and we work with a number of specialist financial advisory firms that can assist with QROPS (Qualifying Recognised Overseas Pension Scheme) and QNUPS (Qualifying Non UK Pension Schemes) which can provide significant advantages. Also, apart from pension planning, we work with specialist insurance companies where an offshore bond might be an effective part of the planning “mix” together with companies and trusts.
We would be happy to talk to you about your situation and we work with a number of international tax experts, pension and insurance specialists that assist in identifying the most appropriate solution for you.