Skandia International, also known as Royal Skandia, is one of the biggest names in the offshore insurance and investment markets, is shortly to change its name to Old Mutual International, to fall in line with the parent company, Old Mutual plc. This will have certain consequences and policyholders need to be aware of how these may affect them.
The UK Chancellor of the Exchequer, George Osborne, recently presented his last Autumn Statement before the General Election next year. There are a few announcements that may affect expats, so a brief overview of some of the most relevant issues is given below.
I am sure many people have heard worrying stories about proposed changes to the UK tax system that will affect expats in particular. Her Majesty’s Revenue & Customs (HMRC) has issued a consultation document with the title of ‘Statutory definition of tax residence: a consultation’. This contains proposals for changes regarding the requirements to be classed a non-resident for tax purposes and is open for comment until 9th September 2011.
Once all responses have been received, the proposals will be reviewed and it is expected that there will be several changes to the initial suggestions in the document. The final outcome is not expected to be announced until the early part of 2012, probably as part of the Finance Bill and the new rules are expected to be implemented from 6th April 2012.
The changes are likely to affect those expats who have retained strong links to the UK in terms of retaining a property for their use, whose immediate family live in the UK and spend all their holiday time there too. The changes will be designed so that there is no uncertainly regarding residency, but for many people are likely to be more restrictive as status will not be based solely on the number of days spent in the UK in a tax year.
Until we have confirmation of the final rules, there is little point is speculating or scaremongering, so I will provide details as appropriate in due course. If you have specific questions, please post here or email me at keren@holbornassets.com
UPDATE 07/12/11 The draft Finance Act 2012 was published yesterday and it has been announced that the introduction of the Statutory Residency Test will be postponed until 6th April 2013. The final legislation is expected in March 2012.
I am sure that many readers have received unsolicited calls from various financial sales companies, claiming their details were passed on by a friend who thought they would be interested in buying certain products. This kind of hard sell is both unprofessional and unwanted.
Banks and other institutions regulated by the UAE Central Bank have been banned from cold calling customers to market loans and investment products. The unexpected ban, which took effect on 20th March, has surprised quite a few financial companies who work in this way, but does not apply to financial advisory firms that are licensed by the UAE’s Insurance Authority. The circular does not mention fines or any other punishments for those who flout the ban, but it is to be hoped that action will be taken by the Central Bank.
It is generally believed that the Central Bank was responding to numerous complaints from UAE residents about the number and manner of cold calling practised by banks keen to sell products and services, although there are probably as almost as many complaints about broker firms. I hope that in time the Insurance Authority will issue a similar directive.
It is my opinion that professional advisers do not, and should not, cold call to obtain clients. It is against company policy at Holborn Assets to do this and all my clients are referred to me or find via this site, my newspaper column or radio broadcasts.
Here’s a piece from the March edition of Good Taste magazine.
Advice for Life - Good Taste magazine March 2011
Copies of this great free magazine available in branches of Choitram in Dubai.
On 7th February I appeared in my usual guest slot on the Nightline show on Dubai Eye 103.8FM.
This month we talked about the most popular topics in the letters and emails I receive from readers of my newspaper column, as well as medical insurance in the UAE and what you need to know.
Use the link below to listen or download the podcast of the show (40 minutes)
http://nightline.podomatic.com/player/web/2011-02-08T01_09_25-08_00
It is a lighthearted show, but contains useful information and facts presented in an easy listening way.
Please contact me if you have any queries related to these topics or any other issues.
Many people make New Year resolution, but how many of those are about your finances?
It makes sense to get your finances in order and deal with the priorities so you can get on with enjoying your life. On 3rd January I guested on the Nightline show on Dubai Eye 103.8FM and as well as doing a round up of 2010 we spoke about what you should do to get yourself organised financially.
A link to the podcast can be found below so have a listen. It’s a serious topic but presented in a light-hearted way. I hope you find it useful.
Your financial priorities and goals change as you age and during different phases of your life. This was the topic for a radio show broadcast on Dubai Eye 103.8FM on Sunday 28th November.
The podcast of the show can be found here. Nightline podcast 28.11.10 It’s informative, somewhat irreverant and easy listening.
Do have a listen and let me know if you have any questions.
Of course you do! No one wants to spend more than they have to and we all like to make a saving.
With the fall in value of many currencies this is an ideal time to move your UAE Dirhams or US Dollars to Sterling or Euros. Want to make your money go even further? Want the best rates without any fees?
If you are planning on a currency transfer of a minimum of AED 20,000, or equivalent in any currency, you can take advantage of wholesale/commercial exchange rates that are significantly more competitive than those offered by your own bank and save up to 3% on the cost of transferring.
The company I use is based in the UK, fully authorised by the UK Financial Services Authority and uses a major international bank for transfers. Transfers are available to and from any currency. The system is quick, hassle-free and is suitable for both personal use and for companies.
A worked example is shown below
| AED 1,000,000 from your bank would get you… | AED 1,000,000 from the exchange company would get you… | |
| Exchange Rate | AED 1,000,000 @ 4.8802
= €204,909.63 |
AED 1,000,000 @ 4.7416
= €210,889.27 |
| Telegraphic Transfer Fee | = AED 70 | = 0 |
A saving of over AED 28,000 or €5,979.64!
Even for much smaller sums significant savings can be made, so why use your bank and lose out? If you make several transfers then the savings can really build up over time and as the saying goes ‘every little helps’.
Contact me on keren@holbornassets.com for details of how you can save on your next currency transfers.
Even if you have a good handle on your finances, have some investments and understand the stock market, chances are that you can still benefit from professional financial advice. The world of personal financial planning is increasingly complex, especially when you are an expat, and an objective and unemotional analysis from an experienced advisor will invariably find a few areas that will require some attention.
Our role is to assist you in achieving your goals, whether they are protecting your family, planning for your future, moving money between currencies, prioritising debts or simply helping you to work out what is most important right now. A good advisor does exactly that – advise – not sell. There is a massive difference between a salesman and an advisor. Advisors are not product led and they should be finding appropriate solutions for your problems, not simply looking to sell a high commission paying policy. We provided added value to your investments as you get to benefit from our years of experience and knowledge.
Always ensure that whoever you speak to has proper professional qualifications (and preferably more than just a basic certificate), a number of years experience and is willing to take the time to talk about what you want, not what they want you to have. An initial meeting is a ‘getting to know you’ exercise where the advisor gathers information and finds out what you want and need. It is not a time to sell. If someone want you to sign up for a 25 year savings plan then walk away.
Independent advisors, the only kind who can offer truly impartial advice, have access to products from right across the market and so are able to find the best products in your particular circumstances at the best price, assuming this is what you need. We also advice on matters such as arranging wills, the impact of Sharia law, offshore bank accounts, inheritance and school fees planning and taxation. We will know about schemes and companies who do not market to the general public and have a wide range of professional tools at our disposal.
Money is an emotional topic for many people, couples especially, and bringing in an impartial professional can help greatly. Major life events are times when advice is needed more than ever, birth, marriage, divorce, job changes, death, moving country. Taking impartial advice from an objective professional can make transitions easier.
The relationship with your advisor should be long-term and ongoing. (I still advise people that I first met some 15 years ago.) Your situation will change and certainly the economic situation changes regularly so just about everyone requires an annual review, even if only for a quick chat about progress and a look at their investment portfolio.
Come and have a chat over a cup of coffee sometime…