Moving abroad opens up a number of exciting opportunities as well as some daunting financial challenges. One of these is how best to manage and grow your savings and investments. So what considerations do you need to make before you invest while living abroad?

Tax implications

You might have a tax efficient account in your home country, but it’s unlikely your new country will treat it in the same way. For example, UK residents have access to an ISA which gives them tax free growth. There is no tax to pay on any gains, income or withdrawals. However, if you move abroad, you are no longer allowed to contribute to the ISA. You probably also have to pay tax on income and gains within the ISA, depending on where you live.

Currency

Exchange rates can impact your investments and returns. You might hold investments in a different currency to that of your country of residence. The issue you face here is that the exchange rate between the two currencies will often change. Therefore the value of your investment in your country of residence changes, even if the value in the other currency remains the same. This can add extra volatility and risk.

What options do you have to invest while living abroad?

Local banks – Often an expensive option with a limited choice of investments. They might be able to offer a relatively appealing interest rate on savings in the short term, but this is unlikely to last. There is a consensus among experts that interest rates are likely to fall from current levels. This means it’s important to invest in assets other than cash so you can generate higher returns. Then your savings are less likely to be eroded by inflation.

Locally compliant insurance bonds – A tax efficient solution designed with expats in mind. An example of this would be an ‘assurance vie’ policy for French resident expats. These offer tax benefits such as reduced capital gains tax and the ability to pass on your capital to your chosen beneficiaries in a tax efficient manner. Companies like Utmost, OneLife and Prudential offer these but be careful: Although the products are usually very good, many financial advisers charge high commission rates to set them up. This can lead to a lock in period during which you can’t access the entire capital, as well as diminished returns. At Harrison Brook we work on a fee basis with complete transparency. Our approach allows us to offer these products to our clients at the lowest cost possible.

Global Investment Account (GIA)– An FCA regulated option for international clients, offering access to a wide range of investments in several currencies. It is available to international clients globally, and our qualified financial advisers can guide you along the way. Harrison Brook can recommend investment strategies tailored to your specific circumstances and attitude to risk. Whether you’re cautious or adventurous, we’ll help you find a suitable portfolio in which to invest while living abroad.

How do I get started?

At Harrison Brook we are here to help devise a bespoke savings and investment strategy for you. Our multi-jurisdictional licensing means we can help clients across the world, and continue to work with them even if they move to another country. If you’d like to find out more about how you can invest while living abroad please click here.