Advice needed on pension investments for a British expat

Ginolard

Hi everyone,

I'm hoping someone can give me some simple, plain advice. I am British expat working as an IT contractor within the EU. For several years I have worked through a management company who have handled my invoicing and split payments between my country of residence and the Channel Islands. They told me today that they are no longer willing to do this because the tax authorities are starting to seriously clamp down on this and, should I continue as I am, I may be serious danger of an audit and severe penalties.

They have advised that I, instead, set up a scheme with them using a Luxembourg-based Life Assurance company and pay the "offshore" funds into an investment portfolio that would be my pension. Now, I am completely clueless when it comes to financial investment. I have no idea what the difference is between a bond, an equity, a unit trust and a share etc. They were using words like "non contractual agreement" and "no exit penalties".

Eseentially, what I want is this. I want to set something up that allows me to pay whatever I want into, whenever I want. If I am out of work I should be able to not pay into it without incurring any penalties. I would also need access to the money without paying any penalties. Ideally, I would just keep paying money into this scheme until I retire and it would then provide with a decent income during my retirement (in about 25 years).

1) Is this sort of thing even possible?
2) Does it sound like the sort of thing my management company were offering (non contractual Life Assurance blah blah)?
3) Is it even safe to go with Life Assurance companies (like Scandia, Generali) at the moment?

I would really appreciate any advice you can give as I'm a little worried about all this and just want to make sure that the funds I have available for saving at the moment can be safe and invested well for my retirement

dunstonh

The options available to you are very different to those based in the UK. You are best served seeing a local adviser aware of your current position and requirements and the laws and options of the country you are resident.

expats using offshore investments and wrappers is not uncommon at all.

3) Is it even safe to go with Life Assurance companies (like Scandia, Generali) at the moment?

You wouldnt be investing in them though. They are just the administrators.

Ginolard

Humour me, what's a wrapper?

dunstonh

Tax wrappers are containers you put investments in. We have rather a lot of them in the UK. ISAs, Pensions, Investment Bonds are three common types. You can get the same investments in all three but the taxation is different with each.

As an expat you dont have access to many of the UK tax wrappers but may have access to things that UK residents wont have.

Cook_County

It is impossible to comment without knowing which country you are in. However it sounds as if you have possibly evaded tax, which is a criminal offence in many (not all) jurisdictions.

I would seek independent legal advice in your country of residence so you are certain you avoid jail time. If my concerns are wromg & everything is indeed above board a local lawyer can recommend a local financial adviser who will give you the most pertinent advice.

Very few UK advisers would be allowed to advise following passporting rules under MiFID.