The expat journey
Client: Married couple from the UK with two children aged 10 and 13, living in UAE for the last seven years. Aged 55.
Scenario
High-income earners combined over 100K AED per month – Solution – General Investment account to allow regular contributions to investment/retirement savings.
Plan to retire in the UK at 65 and want to pay for children’s higher education – Solution – Cash forecast showing required amounts of savings and returns to achieve the plan. Also added life insurance and critical illness to ensure the plan is still achievable if one spouse passes early or gets a critical illness.
Have Private Pensions in the UK – Solution – Transferred to a SIPP and then withdrew (tax-free) and placed in a lower cost general investment account, meaning no tax paid to withdraw the entire amount (UAE is income tax-free), whereas if withdrawing in the UK only 25% would be tax-free. GIA also has lower ongoing costs than the SIPP / platform structure.
Set up a Portfolio Bond to allow the timer on time apportionment relief to begin so that before going back to the UK can transfer everything into the bond and achieve time apportionment relief on the full amount when they return to the UK and have future growth on funds.
Outcome
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- Cash forecast to establish if they could meet retirement needs and education plans for children.
- Transferred UK pensions to UAE to allow them to take it out tax-free in full and invest in a General Investment account cheaper than paying for the SIPP and platform structure. It also ensured full transfer of benefits to a spouse in the event of death.
- Took life insurance to mitigate against their inability to earn what they plan to over the next ten years to finance their retirement and education costs.
- Set up a General Investment Account to allow monthly savings to be invested rather than sat in cash being eroded by inflation.
- Set up a Portfolio bond with a minimum amount to allow them to obtain time apportionment relief on gains after they move back to the UK.
- Had missed several years of UK national insurance contributions, so also processed their back-dated UK voluntary NI contributions to ensure they had the maximum amount and gave an element of guaranteed income in retirement.
- Regularly review the plan and circumstances scheduled to ensure changes are made to the plan as and when changes to life circumstances arise.
If you relate to the above case study, contact us today so we can help you through your financial expat journey.
Disclaimer
The views and opinions expressed should not be construed as investment or financial advice. The information contained is for educational purposes only.
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