Britain is broken. Forgive us for using a tabloid term but there’s no escaping the facts: VAT is rising, unemployment levels run rampant throughout the country, and worst of all, our national football team was cast out of the World Cup.
Then there’s also the topic of the 50 percent tax bracket. People often scoff at the high-earners of this country, people who are not fortunate enough to command a high salary believe that the rich should be taxed as much as possible, but 50 percent is a colossal amount of tax to pay, no matter how rich you are.
So as it stands no one is safe. Our government and the banks have left the country in a state of monetary disarray, the debt is immense, and the government fears that the only way to gain enough money to pay back the deficit is by increasing taxes and introducing uncompromising austerity measures, they make the mistakes, society pays the price- isn’t that how things always seem to work out?
What we’re saying is that Britain is currently in the grip of an unfair regime, taxes are too high, but of course that isn’t the case throughout the world. Now, we’re not trying to incite a mass exodus away from English shores, but we would like to highlight the benefits of moving, working or retiring abroad.
There are many reasons for people to embark on a foreign adventure, there are money reasons- favourable taxes, and there are personal reasons- the excitement of a new challenge in a new place. Everybody knows that staying in one place for your whole life is, for want of a better a better word, a bit of a waste. There’s so much to learn from being in another country, in fact a recent study showed that people who spend time working abroad often garner a much greater skill-set than people who opt to stay in one country, they become more resourceful and creative.
And yes, tax can also play a big part in choosing to move abroad, indeed some of Britain’s most celebrated people have chosen to expatriate themselves from their beloved country, names including rock star Sir Mick Jagger, retail kingpin Sir Phillip Green and also younger celebrities like F1 whizzers Lewis Hamilton and Jenson Button.
If you are planning to work abroad then your first step should be to find out about your tax status, and who you’ll end up being responsible to. Depending on the nature of your departure you may find that you are still liable to pay tax in the UK even if you are working abroad. For example, somebody who was going abroad to work on a short term contract may still be classed as a resident in the UK, in a worst case scenario you could also be taxed in your new country . Most countries have systems in place that stop people from being taxed twice, known as double tax treaties, but it’s a good idea to find this all out before you venture to work.
If you’re not off for a short term journey, and are going for an extended period then you will likely become a UK non-resident. To determine your status in the eyes of HMRC fill out their P85 form, then do the necessary measure in your new country. There are various factors that come into play when determining your residency status, which you can read about specifically here: Tax and Residency.
There are a number of countries that like to entice foreign workers with the promise of low rates of income tax. The United Arab Emirates is famed for its low taxes, oil-rich places like Dubai and Saudi Arabia actually have no income tax at all, giving you the chance to make a lot of money. Other nil-tax havens include the Bahamas, Monaco and Andorra.
If those countries aren’t on your preferred destination hotlist then there are many other places that, while not nil-tax entirely, still offer very favourable tax options, considerably more favourable than 50 percent that’s for sure.
Places like Lithuania, Estonia and Bulgaria are all known to offer a flat rate of tax, whilst some people may argue that a flat rate of tax is unfair, others can argue that people have the right to enjoy high salaries without the threat of heavy tax, as they have undoubtedly worked hard to earn so well.
There are many other countries that offer low taxes and job good opportunities, for a detailed look at the most popular expat destinations, take a look at our city guides.
If your working days are behind you and your reasons for expatriating are of the sun and relaxation kind, then you will be pleased to know that many idyllic locations have favourable rules for foreign pensioners. Taking a pension abroad comes with its own set of benefits, special offshore pension transfers known as QROPS, are very different to standard government pensions and give the holder a lot more flexibility with their pension pot. Learn more about QROPS, and other aspects of retiring abroad by clicking the relevant link.
So as you can see there is much to gain from venturing abroad, be it to work or retire, for years, or maybe just for a little while. To further get a grasp on moving abroad and foreign money options, speak to a recognised Independent Financial Adviser, who will be able to assist you in taking your life to the next stage.