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  • FIRST POST
    • chiang mai
    • By chiang mai 11th Sep 17, 2:20 AM
    • 31Posts
    • 4Thanks
    chiang mai
    Expat Investments
    • #1
    • 11th Sep 17, 2:20 AM
    Expat Investments 11th Sep 17 at 2:20 AM
    I live overseas and am no longer UK resident for tax purposes, that means I can't get onshore IFA advice so after a long period of learning I now do my own investing, But I do have an active long-standing UK bank account and an investment portfolio on City based platform, both parties know I am an expat and are OK with my status.

    I'm now getting ready to build a portfolio which I'm going to post below in order to get comment and critique. Because I'm resident overseas my investment focus is perhaps different from many UK residents in that I'm happy to spread my investment risk far and wide with only 20% invested in the UK, my risk tolerance is balanced/medium and I'm near retirement age. The intended portfolio is 60/40 and valued at 50k in total and looks like this:

    Bonds/Gilts
    iShares £ (index-linked) Gilts UCITS ETF GBP
    Fidelity Institutional (Index Linked) Bond Inc
    Twenty Four AM Dynamic Bond Fund
    Fidelity Money Builder (fixed interest)
    Royal London Extra Yield (fixed interest)

    Equities:
    Baillie Gifford International
    Fundsmith Equity T
    Lindsell Train Global Equities.
    Baillie Gifford Japanese
    Baillie Gifford Managed B
    Jupiter European
    Lindsell Train UK Equities
    Schroder Small Cap Discovery
    Stewart Asia Pacific Leaders
    Henderson China Opportunities

    ....and the geographic spread like this:

    UK 22%
    US 14%
    EU 19%
    Asia 10%
    Japan 10%
    India 2%
    Taiwan 2%
    China 9%
    Aus/NZ 1%
    Emerg. 6%
    Other 3%

    If you have any comments I'll be pleased to hear them.
Page 2
    • grey gym sock
    • By grey gym sock 12th Sep 17, 3:44 AM
    • 4,098 Posts
    • 3,573 Thanks
    grey gym sock
    If the UK does emove the personal tax allowance from people such as myself, one answer may be to buy only accumulation units since as a non-resident I am not liable to capital gains.
    Originally posted by chiang mai
    that doesn't get you out of UK income tax. the income on accumulation units is taxable even though it isn't paid out (and the basis cost for capital gains tax is increased by the amount of the income, so it isn't also taxed as a capital gain).

    so, assuming that any income from income units is subject to UK tax in your situation (which i don't know, but you seem to imply), then switching to accumulation units won't change that.
    • chiang mai
    • By chiang mai 12th Sep 17, 7:58 AM
    • 31 Posts
    • 4 Thanks
    chiang mai
    I have not been UK resident (nor domiciled) for the past 15 years and am unlikely to be so ever again. What I wrote about ACC units was one way to avoid the potential for any taxable income being remitted to Thailand, sorry if that wasn't clear.
    • TCA
    • By TCA 12th Sep 17, 11:57 AM
    • 1,298 Posts
    • 734 Thanks
    TCA
    A second concern is finding funds that hold a good percentage of investments in China but also have decent alternate country holdings, it seems it's all or very little with the China related funds.
    Originally posted by chiang mai
    Are you committed to funds only or are investment trusts an option?

    You could consider Henderson Far East Income, which is 27% China and the remainder from the Asia Pacific ex Japan sector:

    http://tools.morningstar.co.uk/uk/cefreport/default.aspx?SecurityToken=E0GBR00QXD]2]0]FCGBR$$ALL

    JP Morgan Asian Investment Trust has 35% China:

    http://tools.morningstar.co.uk/uk/cefreport/default.aspx?SecurityToken=E0GBR00Y7H]2]0]FCGBR$$ALL

    Pacific Horizon Investment Trust has 39% China:

    http://tools.morningstar.co.uk/uk/cefreport/default.aspx?SecurityToken=E0GBR00QB2]2]0]FCGBR$$ALL

    Just ideas, not recommendations. Several more of a similar ilk on http://www.theaic.co.uk/
    Last edited by TCA; 12-09-2017 at 12:04 PM.
    • slinga
    • By slinga 12th Sep 17, 1:30 PM
    • 1,071 Posts
    • 219 Thanks
    slinga
    I'm guessing that as you are non resident in UK for tax purposes you can't buy ISAs????

    If you held ISAs before becoming non res would you have to sell them???

    I hold 6 ISA funds.
    My favourite is Old Mutual UK Mid Cap

    Schroder UK Dynamic Smaller cos would give you a better return the Schroder Smaller cos you hold.
    It's your money. Except if it's the governments.
    • Glen Clark
    • By Glen Clark 12th Sep 17, 7:29 PM
    • 3,831 Posts
    • 2,796 Thanks
    Glen Clark
    If your 22% UK is FTSE100 for example Iwouldn't consider that to be 22% UK because over 70% of its income is earned outside the UK.
    (FTSE100 is not very well diversified but thats another matter)
    “It is difficult to get a man to understand something, when his salary depends on his not understanding it.” --Upton Sinclair
    • chiang mai
    • By chiang mai 12th Sep 17, 8:51 PM
    • 31 Posts
    • 4 Thanks
    chiang mai
    "Are you committed to funds only or are investment trusts an option?"

    IT's are not my first choice for a number of reasons, liquidity can be an issue as can the unpredictability of discounts to NAV. I currently hold WITAN and Henderson Diversified Income in my pension and their performance is not as robust and flexible as say other UT's/OIEC's I hold. Having said that, I have friends who are almost exclusively invested in IT's and who swear by them.

    Thanks for taking the time to list a couple of China options, I may need to revisit that search and look more closely. One of the problems I have currently is retro fitting the portfolio with a China allocation that takes into account the other regiional holdings I've already decided on, it's like looking for a perfectly shaped wedge to fit a specific size hole! I'm probably also suffering somewhat from fund search overload so taking a few ays away from it might be helpful.
    • chiang mai
    • By chiang mai 12th Sep 17, 8:55 PM
    • 31 Posts
    • 4 Thanks
    chiang mai
    "If your 22% UK is FTSE100 for example Iwouldn't consider that to be 22% UK because over 70% of its income is earned outside the UK".

    Yes I agree, which is why I'm not concerned at my ratio of UK vs US holdings for that very reason, many UK stocks are based on US earnings.
    • chiang mai
    • By chiang mai 12th Sep 17, 8:58 PM
    • 31 Posts
    • 4 Thanks
    chiang mai
    That's correct, I can't buy and hold ISA's, sadly, they are a great opportunity that I think everyone who can do so ought to try and uutilise. And yes, I believe I would have had to sell any ISA's before becomming non-res. although I suspect most people don't andm any still use an accomodation address in the UK for this purpose.
    • TCA
    • By TCA 12th Sep 17, 9:50 PM
    • 1,298 Posts
    • 734 Thanks
    TCA
    And yes, I believe I would have had to sell any ISA's before becoming non-res.
    Originally posted by chiang mai
    The rules allow you to keep any ISAs you have at the time of departure from the UK. You just can't contribute any more to them or open new ones. You would however be subject to the tax rules of your new country of residence as ISAs would have no tax-free status outside the UK. As far as I'm aware.

    Regarding liquidity of investment trusts, I don't see any issues. They are shares and readily tradable on the LSE. Unless you're referring to what they hold and are talking about those invested in private equity and property.
    • chiang mai
    • By chiang mai 12th Sep 17, 10:17 PM
    • 31 Posts
    • 4 Thanks
    chiang mai
    Thanks for the correction regarding ISA's, I never did get involved with them hence I have no first hand experience.

    As said a lot of people are attracted to IT's, I read that statistically, they have the edge over the alternatives. My concern (and it's not a huge one) is the discount/premium to NAV aspect in different market conditions, UT's and OEIC's are far simpler for me since there's only one pricing aspect to consider rather than price, discount/premium and volume. When you're trying to sell in a downturn and the volume is high because everyone else is selling also, the discount to NAV drops which is inconvenient if you bought at a premium hence there's a timing and a potential liquidity issue since fewer peopl want to buy when everyone else is selling..
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