Contrary to popular belief, the investment options for those who reside in their home country of the United Kingdom differ from expatriates living abroad. One good example is the ISA or the Individual Savings Account. While it may be commonplace for many UK residents, it is an option that generally isn’t available for emigrants. Due to its convenience, tax-efficiency, and safety, many ex-pats miss out on the advantages that ISA yields. However, that doesn’t necessarily mean that they don’t have any worthwhile investments that they can pursue. And in this piece, we’ll discuss some of the opportunities available for expatriates.
1. Offshore investments
One of the most common investment options for expatriates comes in the form of offshore investment bonds, and it isn’t hard to see why. After all, it isn’t subject to capital gains and income tax. What this essentially means is that the investment will grow free of tax, which in turn, could potentially lead to more substantial returns on your investment in a shorter time frame compared to bonds that are onshore. To invest, a single payment is a lump sum. However, the amount that you’ll need to pay will be determined by the chosen provider.
It is well worth noting that once the money from the selected offshore bond is brought into the United Kingdom, it will be subject to tax. As such, it is imperative to ensure that you’ll be abroad for a long period. To ensure that the encashment goes smoothly and that your profit is maximized, it makes sense to hire the services of a professional financial advisor.
2. Overseas pensions
An overseas pension, in many ways, is an investment and source of stable income for expatriates to retire. It is growing to become a preferred scheme for many because it presents people with the opportunity to either withdraw or hold on to one’s pension in the selected currency. Why does this matter? The answer is simple: it protects people from any exchange rates that could be potentially volatile. Additionally, pensions in the United Kingdom will only transfer funds to their partner when they pass away. However, with an overseas pension, you have a lot more flexibility when it comes to choosing who inherits the funds.
3. Property acquisition
Another effective way to diversify your portfolio for your investments is through property acquisition. The process starts with purchasing a piece of property in the country that you are currently based in. Once its value has risen, you can benefit from passive income through renting. Keep in mind that the task is much more challenging for expatriates than locals, especially if you normally move from country to country. Because of this, you may need to hire an agency that can manage your property and make collections when needed.
As an expatriate, understanding all of your options when it comes to prospective investment opportunities can improve your portfolio. Whether you choose to opt for offshore investments, an overseas pension, property acquisition, or all three, you’ll surely maximize your returns.
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