Last Updated on 31st December 2024
Expatriates around the world rely on professional tax management guidance to deal with the complexities of cross-border assets and incomes, variations in their tax residency position, and to ensure they make informed decisions, taking advantage of exemptions, allowances and beneficial tax treatments in their chosen destinations.
One of the areas clients often request help with is selecting the best-suited tax adviser or financial planner to optimise their portfolios and wealth management.
In short, the ideal adviser should be both suitably qualified and accredited and have up-to-date knowledge of tax regimes and frameworks in all relevant jurisdictions.
Some of the more involved areas we assist with, such as restructuring large investment portfolios, establishing tax residency when this is unclear, contesting incorrect tax charges or transferring high-value pensions, undoubtedly require specialist advice from expat tax experts.
The Contrasts Between Hiring a Certified Financial Planner and an Expat Tax Adviser
Certified Financial Planners or CFPs hold a professional certification awarded by the CFP Board, which covers various aspects of financial management, such as insurance, taxation and investments. CFPs can also study for the certification to be able to pursue specific careers, such as offering financial guidance for estate planning.
While a CFP is a skilled professional and might work in varied roles and positions, the big caveat for expats is that a UK designation or accreditation only authorises the holder to offer clients advice about their financial affairs within the UK.
Under previous regulations, some financial businesses and advisory firms based in the UK used passporting rules to transfer their services into other jurisdictions, but this has been prohibited since early 2021. This means any adviser you hire in any country should have an equivalent certification or accreditation within that location.
Consulting an experienced adviser in the UK ahead of an international relocation can potentially be beneficial if, for example, you need to quantify your ongoing UK tax obligations or manage the sale or transfer of assets. However, you must be aware of the limited scope of the advice available.
What Are the Advantages of Consulting an Expat Tax Specialist?
Tax specialists might hold numerous qualifications but focus their expertise on taxation. They often work alongside wealth managers and financial advisers with separate and equally relevant areas of knowledge.
In many cases, the intricacies of evaluating your existing tax position and obligations, understanding how they will change following a cross-border move, assessing your long-term options to optimise tax efficiencies, and making clear decisions about how to restructure assets or income streams fall outside the guidance a general financial adviser can offer—and more so if they have experience solely within the UK.
Managing your tax affairs is crucial since even inadvertent non-compliance, a lack of understanding about the taxes levied in your intended place of residence, or misconceptions about the ongoing tax liabilities you will be subject to could significantly impact your plans.
Tax consultants or advisers understand the specifics of tax systems in different countries and the legalities when changing your tax residency from one place to the other – ensuring you make decisions that are firmly in your best interests. They can:
- Put together bespoke tax management strategies based on the laws and regulations in your home country and place of residence.
- Advise on the tax ramifications linked with larger-scale transactions.
- Help with estate and succession planning, including where expat clients may have assets in multiple countries.
Rather than simply working on tax filings and calculations, taxation advisers specialising in expat financial management can identify all of the potential deductions, foreign tax credits, allowances and exemptions that apply and recommend the best ways to access and maximise those beneficial aspects to avoid paying unnecessarily high tax – in the UK or elsewhere.
When Is an Experienced Expat Wealth Manager or Tax Adviser Essential?
Every relocation from one country to another is considerably more streamlined when you have the right input from the right professionals who understand your plans, financial goals and objectives and who have full oversight of your affairs to enable them to provide relevant, timely and accurate guidance.
We summarised earlier some of the key circumstances in which knowledgeable tax assistance is pivotal, but this may apply in other scenarios, such as:
- Handling pension transfers worth £30,000 or more. The Financial Conduct Authority (FCA) in the UK enforces a rule that states anybody transferring retirement benefits of this value or above must have evidence of independent financial advice before they can proceed.
- Making decisions about investment products, trusts, funds and equity assets, where the ways these are taxed can depend on the location of your portfolio assets.
- Planning for retirement as an expat, with considerations around the stability of your retirement income, how currency fluctuations could affect your pension benefits, and how cross-border transfer rules and taxation obligations could impact your lifestyle expectations.
- Education fee planning, where most families relocating abroad need absolute confidence that they have properly planned for education fees, property acquisitions, and other outgoings.
Chase Buchanan’s wealth management teams throughout Europe and North America work alongside our in-house tax specialists, ensuring our clients can tap into any relevant areas of expertise and receive comprehensive financial planning services before, during, and after a cross-border move.
We can step in from the early planning stages, advising on areas such as the savings and investment products you may wish to consider, how your risk profile might impact your decisions, and ensuring you have complete knowledge about how your tax position may vary once you become an overseas resident.
Our advice would be to seek support from a multi-skilled financial advisory team with ample experience working with expatriate clients – rather than focusing on one specific set of skills, qualifications or accreditations which may be irrelevant to your requirements or limit the reliability of the advice on offer.
For more information about expatriate tax management and planning for your move, you are welcome to contact any of the Chase Buchanan Wealth Management regional offices at your convenience to schedule a good time to talk.
*Information correct as at December 2024