A lot of expat clients assume that when living in one European jurisdiction, originally from another, that they can effectively decide on which countries tax they pay on financial instruments such their pension, income and investment gains. This assumption is based on the fact that many European jurisdictions have Double tax treaty’s in place, meaning that individuals do not pay tax in two jurisdictions on the same financial instrument. Although a lot of EU member states follow a OECD format when writing their treaty this is not always the case. It is very important to assess the treaty of the country that you are considering retiring to in order to put the right financial plans in place. This will avoid paying undue tax and also help in deciding which of the many popular European destinations to spend your retirement years in.
At present, most European expats have the luxury of making the most of their non-resident tax status, which in the majority of cases allows them to invest offshore tax free until they return back to their home country. However, the global economic downturn has hit European countries particularly hard and many are changing rules and regulations to ensure they don’t miss out on tax receipts. At the moment this is focused on those resident or holding assets in individual European countries, but European expats living and working in the UAE should not take this for granted. It is best to ensure investment vehicles and plans are regularly assessed to ensure that any changes that may drag expats into the tax net in the future – even inadvertently – can be enacted with the least disruption to long term investment and retirement plans. It is now more important than ever that European expats assess their financial goals with one eye firmly on potential regulatory disruption and another on issues such as market volatility and currencies, particularly in light of the current debate on whether the Euro as a currency can survive in the long term.
Jessica Cook (Profile)
Direct Line: 00971 (0) 44 36 2713
Mob: 00971 (0) 50 46 99236
Senior International Financial Planner
United Arab Emirates
Guardian Life Management
A lot of expat clients assume that when living in one European jurisdiction, originally from another, that they can effectively decide on which countries tax they pay on financial instruments such their pension, income and investment gains. This assumption is based on the fact that many European jurisdictions have Double tax treaty’s in place, meaning that individuals do not pay tax in two jurisdictions on the same financial instrument. Although a lot of EU member states follow a OECD format when writing their treaty this is not always the case. It is very important to assess the treaty of the country that you are considering retiring to in order to put the right financial plans in place. This will avoid paying undue tax and also help in deciding which of the many popular European destinations to spend your retirement years in.
