investment for retirement

EdInvestor

shiredeon wrote:

i find the trouble is having to become an expert in every aspect,i am already somewhat burnt out by having run a business for 25 years and to be quite honest i can't raise my game anymore

There's no rush you know.:) After all, you're planning to retire at the young age of 52.

What will you do with your time for the next 30 or 40 years after you move?

Do you think you might be able to set aside a bit of it for managing your money? ( after you've had a suitable rest period to get over the burnout of course.)

If so, I would just distribute the cash around a range of high interest deposit accounts and live off that money for a while, until I had done a bit of reading up about investment and such.Very easy on the internet these days.

Just make sure you set up all the relevant accounts/credit cards etc before you leave the UK as you can't after you've gone.

Then when you have the time and interest, get back to us.

shiredeon

i guess your right ed, i'm still renovating the place in france which i find theraputic, i,ve a farmhouse and 42 acres to look after so i won't be bored that's for sure, cheers

cheerfulcat

shiredeon wrote:

i find the trouble is having to become an expert in every aspect,i am already somewhat burnt out by having run a business for 25 years and to be quite honest i can't raise my game anymore, i know i'll save money by investing myself
but i'd sooner bow to someone elses greater knowledge, what i want is an expert to say," if it was my money i'd do this" (for a fee of course) and then leave thinking well i've given it my best shot.

In that case, why don't you see if you can find an IFA based in France who specialises in expat investing? If you ask on the Motley Fool board I linked to, you may find that someone can recommend a company or individual.

Edinvestor wrote:

This might be so: but I have yet to run across any expats who have really managed to operate successfully as investors in Europe using their local system: they all seem to fall into the clutches of the frightul offshore IFA brigade - and if you think our onshore lot are bad, you ain't seen nothing till you've looked at them.To be avoided at all costs.

The trouble is that with this amount of money there will be serious tax issues; wealth tax, for one. There are ways round this but they involve using local funds, from what I can see. And the currency risk is a real one, not to be overlooked.

shiredeon

am i right in thinking that i get taxed on the capital even though it's invested and not just the income,

cheerfulcat

Under the wealth tax system, yes, you are taxed on the value of all of your worldwide assets over a certain threshold ( ~730,000 Euros currently,IIRC ), including your principal residence ( though there is a small reduction available on that ). You really do need to take specialist advice.

EdInvestor

French wealth tax, some more details

.... French taxes may be lower than in the UK

Easy to find tax specialists to advise.

shiredeon

i guess i am better off not renovating the place in france too much to keep the value down and sharing the wealth with my partner(we're not married) to try and keep below the threshold,?. by the way thanks for all you much valued input.

cheerfulcat

Unfortunately the tax is based on household assets, not individual ones, so it won't make any difference who owns them. I wouldn't let the tax affect what you do to the house; it's just an example of something that a specialist tax advisor would know about and perhaps know how to circumvent.

EdInvestor

One other thought on the investment side - do you expect to be in France forever or is there a chance you might come back to the UK? I ask this partly because you're so young.

If the latter , it might be a practical idea to maintain a small foothold in the UK property market by way of a letting property which would also generate tax free income for you by using up your UK personal allowance while in France. I'm thinking of a relatively modest 1 or 2 bed flat worth around 100-120k, which would generate a net rental income of 4-5% after expenses.

Such properties can still be found in the UK ( eg on parts of the south coast) and a good letting agent makes it fairly hassle free - it's quite routine for expats to rent out their homes when they get posted abroad, for instance. (The worry is always that because it can go up very rapidly, you can get "priced out" of the UK market quite easily.)

You can receive the rental income gross and you won't pay any CGT on sale after 5 years ( not that one would expect massive capital growth in the next few years anyway, but you never know.)

It might also be convenient to have a small place you could come back and live in for a bit if you needed to. And it would diversify your investment. Because you're so young you need to invest your money in assets where you get both income (eg rent, dividends, interest) and at least some capital growth to beat inflation. At the same time you need fairly low risk assets ( equity income stocks, commercial property,and usually, bonds.)

But bonds have lately developed risky tendencies, so it might be good to have a bit of exposure to residential property instead, though the downside is that it's not liquid.

All a bit complicated, but worth spending some time to grasp the basics and get it right IMHO. After you know what you're doing, it's actually quite easy really.

shiredeon

hi ed, funnily enough i do have a flat in manchester which i am just letting, it has a small mortgage which i will pay off shortly, i don't anticipate ever returning to the uk as i've had a gutfull of the place i suppose i could just try and find some internet based deposit accounts and hope they will generate sufficient income, at least that keeps the money easy to move and accessable.