Relocating? Consider these tips first
20 January 2019 | Business
The report gives an overview of tax regimes across 40 jurisdictions, including the most popular locations that people choose to live and work. Compiled through the contributions of BDO's private client tax specialists worldwide, it includes insights into the trends and factors influencing global relocation.
Richard Montague, BDO's head of international private wealth in the UK and chair of BDO's global private client strategy group, says that “Unlike the corporate tax world where we're seeing greater international cooperation and convergence and countries applying a more unified, global approach to taxation, governments are still using personal tax treatments to attract wealthy individuals and investment to their countries.”
The BDO report says that despite the many different tax regimes across the globe, most countries have attractive qualities and are favourable for differing circumstances. Countries with higher tax rates such as the US and Canada, for example, may still attract investment due to economic opportunities, while those with lower tax rates, like Singapore, are perhaps more attractive from a tax perspective.
In the UK, the remittance basis for foreigners continues to attract families and wealthy entrepreneurs to relocate and reside in the country despite recent changes to the regime after 15 years of residence. The UK has also maintained, and even relaxed, rules for inward business investment.
“However, we are also having more conversations with clients who are considering whether to leave the UK. Many of these are being driven by Brexit and concerns over the direction of tax policy given current political uncertainties,” he says.
The climate, education, family and business opportunities are also big considerations for individuals looking to relocate.
“When emigrating from your home country, personal circumstances and preferences will determine your destination of choice. However, globally we have seen legislative and regulatory changes increasing the cross-border flow of foreigners and investment – in part through tax,” Montague says.
“We live in an increasingly globally-mobile world and it's important that high net worth individuals consider the tax implications to avoid unexpected and unwanted surprises. Wealthy individuals will often have a footprint in more than one country, either as dual residents or with international business or family interests, and complexities can easily arise. These individuals need to focus on ensuring long-term asset preservation while complying with their global tax obligations – and an understanding of the tax regime in the country of choice continues to be key.”