Offshore savings Updated:
For many future retirees, the thought of spending their golden years in the sun is hard to ignore. But, those that have heard Nick Clegg and Chancellor George Osborne's latest proposals might wonder how their home-grown property ambitions and any offshore saving requirements would be affected, as under proposed changes to the capital gains tax system they could be charged 28% should they sell their former home later on.
Currently, British homeowners have to pay capital gains tax if they make a profit from selling a property which isn't deemed their main residence, but foreign investors and expats are exempt from this rule. This could change, however, if plans are agreed upon in the next Autumn Statement which would see capital gains tax charged on all British property sold by overseas investors and expats.
This could easily affect retirees living abroad as the plans would mean that any British expats, who are classed as non-residents but still own property in the UK, would have to pay tax should they need to release capital by selling their old home. It could have significant consequences for those who perhaps still want to retain a link back home, or who even want to keep the house as part of their children's inheritance, so should the changes come in many might want to re-consider their plans to keep hold of their property.
It would also be a good opportunity to make sure their offshore savings accounts are suitable. If they need to pay an additional tax it means savings will become even more important, providing a valuable source of income and ensuring the extra payment won't lead to financial difficulties in their golden years, so comparing suitable options should be at the top of the agenda.
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