The last 12 months have been unsettled on many levels, with major political elections, sweeping reforms to taxation and foreign policy, and no shortage of market volatility, interest rate fluctuations and shifts in investment appetite – all of which the wealth management specialists at Chase Buchanan have helped their clients navigate.
Reflecting on the most consequential changes in 2024, the global team of financial advisers, taxation experts, and private wealth managers has summarised the biggest and most impactful reforms for expatriates—current and prospective—while highlighting potential positives for those still planning an overseas relocation.
Recapping the Largest and Most Significant Changes in 2024 for Expatriates
Among the headline announcements, the following news has all been generally perceived as negative for the international expatriate community amid a global wave of tighter restrictions and heavier tax burdens:
- Closures or reforms to multiple popular golden visa programs, with pressure to remove citizenship by investment options throughout Europe and close opportunities to qualify for residency or citizenship via real estate investment, following widespread housing crises and shortages of affordable accommodation.
- Amendments to the UK Overseas Transfer Tax mean that pension transfers to Recognised Overseas Pension Schemes (ROPS) no longer benefit from an exemption against the 25% tax levy. This has prompted a swift rise in urgent transfers or demand for alternatives such as Self-Invested Personal Pensions to avoid unnecessary dents in retirement savings.
- Labour's announcement that pension wealth will now be incorporated into Inheritance Tax (IHT) calculations further creates an impetus for affluent taxpayers either with an overseas residence or considering a move, ahead of the impacts on the tax liabilities likely to be borne by their beneficiaries.
The change in government continues to have ramifications, some of which are yet to be seen, but other issues include the proposed introduction of a new exit taxation scheme in the UK and the forthcoming end of the non-dom tax regime.
Predictions from the Office for Budget Responsibility (OBR) show that the volume of wealthy non-domiciles leaving the UK will increase by 2% for individuals and 5% for those with trusts.
Most of these individuals are expected to be high-net-worth residents who decide to relocate to avoid trusts being subject to IHT and because of the ongoing exposure, which continues for ten years from their date of departure.
The Implications of Major Tax Reforms in 2024 and Longer-Term Effects on Expatriate Relocations
Lee Eldridge, Group CEO and Head of Investment Advisory at Chase Buchanan, says, ‘It’s no secret that 2024 was a period of rapid and, at times, unprecedented change, from closures of high-demand golden visa schemes to announcements about the UK tax system, reforms around pension transfers and capital gains taxation.
While summarising what these changes all mean is worthwhile, it also reflects the incredible importance of tailored, regulated, and reliable financial advice.
Expatriates very often come unstuck due to misunderstandings about their tax exposure, long-term reporting obligations, or the meaningful effects a change in tax residency may have on their finances.
Even during periods of calm and little reform, understanding the variations in tax legislation, complying with reporting requirements, and making informed, strategic decisions make a world of difference to financial security and future wealth while taking full advantage of tax efficiencies and exemptions and nurturing a balanced, well-performing investment and asset portfolio.’
Guidance for Expatriates Concerned About the Feasibility of Their Relocation Plans Following Tax Reforms
Eldridge goes on to say, 'Amid much negative news, there are positives, including a substantial rise in interest in alternatives to golden visa schemes, many of which provide beneficial tax treatments for wealthy residents who can demonstrate they have the means to support themselves and their dependents and who opt out of any eligibility for social security.
We've also seen new clarity about long-term exposure to IHT in the UK. The new residence-based system means that worldwide exposure to IHT in wealth and assets exists for up to ten years, depending on the duration of UK residency. This, in turn, has created a backdrop for asset shedding for those keen to establish themselves as non-residents for tax purposes.
The key is always to consult with an accomplished professional who is up to date on current schemes, initiatives, reforms, and proposals and to plan ahead with the right assistance based on your specific circumstances, aspirations, and expectations.’
Chase Buchanan Wealth Management is a full-service provider of financial planning, wealth advisory, investment management, and pension planning assistance. It has offices throughout Europe and North America and is supported by a UK Administration Centre.
Read more about Chase Buchanan - Chase Buchanan Wealth Management Advises Expats Moving to Spain to Review Plans Amid Golden Visa Scheme Reforms
About Chase Buchanan Private Wealth Management
Chase Buchanan is a highly regulated wealth management company that specialises in providing global finance solutions for those with a global lifestyle. We are global financial advisers, supporting expatriates around the world from our regulated European headquarters, and local offices across Belgium, Canada, Canary Islands, Cyprus, France, Malta, Portugal, Spain, UK and the USA.
Chase Buchanan Ltd is authorised and regulated by the Cyprus Securities and Exchange Commission with CIF Licence 287/15.
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