Brace for the Halloween Budget: Tax Creep Threatens Expats and Estates

UK tax

26 Oct

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ProACT Sam looks forward to a winter of tax and estate changes making it more important than ever to use a Wealth Manager with Know How.

Writing this article we are still looking forward to Halloween and a budget filled with horrors.

UK Expats with fixed income & assets and in the UK face the ever extending reach of the UK taxman. A government committed to not increasing tax on the ‘working people’ but only the ‘rich’ will surely use their PR playbook filled with cloak and daggers to mysteriously generate creative new ways to tax your mind, body and soul in life and death.

When the tax bell rings out, ask not for whom the bell tolls, it tools for thee.

Frozen allowances are a perfect politicians tool to not increase taxes today but leave inflation to eat away at your personal allowances and drag you deeper into the mire of higher taxes. Simplifying the tax system is possibly the siren’s call from the halloween budget with nothing to pay today but a future fearing ever higher taxes.

Capital may be punished and expat property and business owners hung out to dry as a new set of tax rules come in for property, investment and business sales. Many of the allowance for capital, dividends and savings have already been reduced, and could disappear, with inheritance tax allowances be eroded.

Will pension and inheritance tax rules be slashed to charge an inheritance gift tax of 40% on first death, meaning the widow and pensioners not working be further left out in the cold after the halloween budget?

The tax man has you at birth - registering your parents and grandparents on a birth certificate that defines where you are from. Then it's hard for them to loosen their grip to let you go - they can see you and know where you are when travelling and investing in property, business and investments around the world. Around every corner is a tax trap to fall into, leaving you and your family the lessor. Even when you die they haven’t finished with Inheritance taxes due from your family and business property and investments. We will see how inheritance tax allowances and rates change this fall.

An expat going to the UK could have had 15 years as a non dom with beneficial tax savings. That has already been changed to 4 years in the UK but was intended by the new government anyway. Increased taxes are on the way for expats in the UK and around the world as a chill wind blows at the start of winter.

Your domicile determines your liability to 40% inheritance tax on death. Inheritance tax is a capital gains tax so this rate may already be extended to all assets fixed in the UK for lifetime capital gains tax charges on property, business and investments too.

NON-DOM TAX REGISTRATION

UK Expats in Cyprus could still be non-dom in Cyprus for more than 15 years and pay 0% tax on dividends and savings. Dividends in the UK were taxed up to 39.35% and may be more after Halloween.

However Cyprus also has some Tax Creep with a Health Tax payable by all tax residents on worldwide income - including saving and dividends. Even £1000 income for a Cyprus tax resident could be liable to Health Tax and require a tax return each year, or at property sale or death for up to 6 taxing years previously.

We will be reacting live to the Labours budget announcement on 30 October. Set a reminder now.

You need to have your tax registration certificates to be exempt from Cyprus Dividend, Savings, Property Rental and Health Taxes.

ProACT Know How to take care of family and business property and investments tax registrations

Family Willing to Trust

Gifts to family can be Inheritance tax and Capital Gains tax free.

ProACT Wealth Management know how allows us to assist expats to make a will to protect against tax creep and avoid the cost and delay of Probate.

If the Halloween budget is to freeze gifts, allowances or fix them to the UK then expats should consider protecting their assets inside a family trust. You don't need to own the assets to enjoy the benefits.

If you have spent a lifetime earning taxed income, to then save and invest in property and business and pensions, only for tax creep to extend to the introduction of higher capital gains taxes on more of your life's work, then you should consider planning ahead.

Bill Gates does. James Dyson does. Richard Branson does.

Contact us to discuss how to protect your life's work, investment and wealth from higher taxes using a family trust, a family trust that only benefits your family, has the highest tax saving, and includes free will writing for the family.

ProACT Partnership offer professional and regulated Will, Trust, Estate and Tax planning for expats living and working abroad to avoid the menace of tax creep.

For help and guidance, contact us.

Halloween Budget Special

We'll be reacting live to the UK's Halloween Horror budget as it's announced next week.

Set a reminder now https://youtube.com/live/bWkMohrFKb0?feature=share