Offshoring assets will become more attractive.
Rachel Reeves announced tax increases in her recent budget.
Perhaps not surprisingly when she wrote a book titled The women who created the modern economyin which she praised Joan Robinson.
Joan Robinson praised the brutal communist leader Mao Zedong and the even more brutal North Korean regime in her book “Korean Miracle.”
Anyway, I digress.
Most of the announced tax changes will affect residents of Britain, including cuts to the ‘salary sacrifices’ people can put into their pensions.
However, some measures will also impact British expats, a cohort I have been mentoring for over a decade at adamfayed.com and beyond.
The most important ones are
- British expats will no longer be able to pay voluntary class 2 national insurance contributions. Paying the state pension now costs five times as much.
- If you own UK assets, including property, you pay 2% more on dividends and savings on UK assets
- A ‘mansion tax’ on houses over £2 million. For properties worth over £2 million this will work out to £2,500 per year, rising to £7,500 for properties worth over £5 million.
What impact will this have?
There will likely be an added incentive for British expats living abroad to buy offshore assets as this comes after the changes to inheritance tax that I mentioned in the video below.
These changes benefited British expats who have been abroad for more than ten years and have non-UK assets at the time of their death.
They are less beneficial for people with UK assets above the inheritance tax threshold.
What does this all mean? In blunt terms, this means that if you continue to leave assets in Britain, you will be taxed more during your lifetime and when you die.
By comparison, if you stay outside Britain for more than ten years and place your assets offshore, you will pay less tax even when you are away.
Tormented by financial indecision?
Adam is an internationally recognized financial author with over 830 million answer views on Quora, a best-selling book on Amazon, and a contributor to Forbes.
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