The UK Budget: How Will It Affect You As A UK Expat?
Updated: Mar 10
By James Hartland, Expat Coach And Co-Founder of The Astra Group.
Let's start with 9 key points you need to know about the UK Budget:
Covid and Brexit have decimated the UK economy and the Chancellor needs to prioritize growing the economy.
He has launched short term incentives for mostly the manufacturing sector which could offer a short term boost and is also offering support payments to business’s that have suffered due to Covid.
In the longer term corporation tax will increase making the UK less attractive from an investment perspective. This was not what was envisaged when Brexit was proposed and will mean the UK will not attract the investment it had hoped for.
The extra tax burden is likely to fall in the future on medium sized business’s which may make them less attractive as an investment proposition and encourage some of these businesses, too relocate.
The government will freeze the personal tax allowances for the foreseeable future meaning more people including expats will be paying more tax.
The government will launch various ‘green bonds’ through the NS&I but the returns will be very low making them unattractive for expat investors.
The stamp duty exemption will be continued until the end of June 2021 which will mean house prices are likely to continue to increase until then but after that the outlook will not be clear.
The government will allow first time UK buyers [Not expats] to purchase property with only a 5% deposit and this may help to sustain the lower end of the market but this will depend on the rates banks charge.
The government will also freeze the tax breaks for people paying into UK pensions making them significantly less attractive and available to people with a high or moderate income.
So, what does this mean for expats and how will it affect you?
If you are a UK expat, it is always worth considering diversifying your investments outside of the UK as there will be equally good and potentially better investment opportunities elsewhere.
The tax allowances which expats are also entitled to will be frozen for the foreseeable future which will increase the tax burden for expats with UK investments and those who retire abroad. This includes dividends, property income and pension income.
If you are looking to buy property in the UK for the long term now maybe a good entry point as you will save the stamp duty for property under £500,000 although the current value maybe higher than you would expect to pay.
If you own a property in the UK and will likely not go back to live in it or retire or work back in the UK this could be a very good time to sell.
Working abroad will help you to build up alternative savings and pensions outside of the UK which will help you to avoid the significant taxes you might otherwise pay if you build up a UK pension.
For those of you who have been living and working outside of the UK for a significant time this budget will not stop the steady decline in living standards in the UK compared with many other places.
Ultimately, the UK has no choice but to increase taxes for the foreseeable future making it a less attractive place to invest. The fall out from Brexit is also now becoming apparent which will again restrict the ability of the UK to be a significant part of the global economy.
As with all things in life and in particular with expats, it is important to always seek advice before making any decisions as everyone’s situation is different and this is especially true for expats.
if you are a UK expat, get in touch with me today to help set you up for your next best move.
I am a global nomad and businessman, lived outside of the UK for nearly 4 decades working and running businesses in different continents.
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