Is your financial planning up-to-date for 2024? Take a little time now to check your tax planning, investments, pensions and estate planning are all on track to protect your family’s long-term wealth.
A key reason to review your wealth management is to ensure it’s up to date. Establish whether any tax rules or financial regulations have changed and consider if developments in your circumstances mean you should adjust previous arrangements. This article aims to provide a few tips on having your financial planning on target to meet your needs and provide financial security for as long as you need it.
Why regular reviews are important
Regular reviews help keep your financial affairs up-to-date and compliant.
It is important to keep ahead of any developments that may affect you, for better or worse. Tax rules or financial regulations can change at any time, which may affect the tax efficiency and security of your existing arrangements. There may also be new opportunities that you could find beneficial… but only if you know about them. You don’t know what you don’t know, which is why conducting your review with the help of a professional financial planner can prove so valuable.
You also need to consider if any changes in your personal and family circumstances mean you should adjust your arrangements. Did you welcome any new family members or are there any upcoming major life events – such as retirement, relocation, or divorce – that may warrant a rethink of your plans?
For a truly effective review, and to ensure it is suitable for your life abroad, consider how your tax planning, investments, pensions, and estate planning work together.
Tax planning for 2024
You should first make sure you know where you are resident for tax purposes, especially if you’re new to living overseas, or spend time in more than one country.
You then want to structure your investments and wealth in the most suitable way to minimise taxation – in your country of residence, the UK, and wherever you have financial interests – while still meeting your tax reporting obligations. Research the local tax regime to establish what opportunities it may provide residents if you structure your assets correctly.
With all the ‘automatic exchange of information’ that goes on these days, you need to ensure that you get it right. Your local tax office receives financial information about your offshore assets without having to ask for it.
Cross-border tax planning is complex, so take specialist advice to achieve peace of mind and potentially secure significant tax savings.
Savings and investments
If you do not already have a financial plan in place for your country of residence, you need to take a fresh look at your savings and investments. Are they actually better suited to a UK resident? Do they meet your risk/reward appetite? Are you taking advantage of suitable tax-efficient opportunities available in your new country of residence?
Successful investing is about having a strategy specifically based on your personal circumstances, time horizon, needs, aims, and risk tolerance. You should ensure you have adequate diversification to avoid over-exposure to any given country (including the UK), asset type, sector, or company. Explore investment structures that allow multi-currency flexibility to help minimise exchange rate risk.
Pensions
For most people, their pension is key to their financial security through retirement, so deciding what to do with yours could be one of the most important financial decisions you make.
Take the time to ensure you are up-to-date on the latest pension regulations and to explore all available options. Weigh up all the pros and cons and consider the tax implications and potential benefits in your country of residence.
Make sure you take regulated professional advice to protect your retirement benefits from pension scams and do what is right for your circumstances and aims.
Estate planning
It is vital to review your estate planning when living abroad. To offer a few examples: in Spain and France, both succession law and tax work very differently to the UK. Portugal’s equivalent of inheritance tax is much more beneficial than the UK’s, but you need to familiarise yourself with Portuguese succession law and how it will affect your family and heirs. There is no inheritance tax in Cyprus – one of the benefits of living in Cyprus. Again, you would need to familiarise yourself with Cyprus succession law and how it will affect your family and heirs.
Are you aware, for example, that some countries have ‘forced heirship’ rules that could automatically pass a significant proportion of your worldwide estate to your direct family, whatever your intentions? You can specify in your will for the EU regulation ‘Brussels IV’ to apply relevant British law to your estate instead, but take care to understand your options and any tax implications.
Your estate plan should be set up to achieve your wishes in the most tax-efficient way possible. If you remain UK domiciled – as many expatriates do in most countries (France is an exception) – you continue to be liable for UK inheritance tax, so you should plan to reduce this liability for your heirs.
Get help with your financial planning for 2024
To bring all these complex elements together and ensure you have not missed out on any suitable opportunities, take expert, cross-border advice from Blevins Franks. Spending time on a financial health check with us now can secure peace of mind that your financial affairs are in order, for 2024 and beyond.
Contact us today.
