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Tax Planning
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How It Might Affect You – Some Examples

Investments domiciled in one country may be tax efficient in that country but tax punitive when you relocate to another country. Many International Expatriates are either paying too much tax or may face punitive taxes when relocating. UK Expatriates are still subject to UK Inheritance Tax unless they take extensive steps to remove their UK domicile.

Some Simple Examples

UK Inheritance Tax:

Many UK Expatriates assume that because they are not resident in The UK that they are not subject to Inheritance or death tax as is it commonly known. This is most definitely not the case. All individuals, irrespective of their domicile status, benefit from an IHT nil-rate band, currently £325,000. Transfers of assets between spouses and between civil partners, whether gifts made during a person's lifetime or transfers of assets occasioned by the death of one of the couple, are generally exempt from IHT.

Where the spouse or civil partner to whom the assets are transferred does not have a UK domicile there is a lifetime limit (cap) on the value of the assets that can be transferred free of IHT. The cap is currently £55,000 - section 18(2) Inheritance Tax Act 1984.

Non-Harmonized Investments for Italian Residents:

Europe has now moved to full exchange of information. Investments held in countries that do not apply exchange of information with Italy are taxed punitively, typically at 43%. It is possible to grow your income in Italy using a bancassurance structure where the only annual tax while your investment is growing is 0.15% withholding.

UK Investment Bond:

If you took out a UK domiciled Investment Bond whilst resident in the UK these carry a withholding tax of 20%. This may be useful whilst you are resident in The UK as it simplifies your tax obligation. If you are an Expatriate this is usually entirely unnecessary.

Tax for International Expatriates is a complex subject. The examples above are merely to highlight some common issues.

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Unity Financial Partners Srl is registered with IVASS Italy and The FCA (Financial Conduct Association) UK. IVASS Reg No: B00035674, FCA Reg No:578179. Unity Financial Partners is able to passport services throughout the European Union. Unity Financial Partners also facilitates services via a network of affiliated professional partners who are separately registered and regulated in their own right both within The European Union and worldwide. Registered Office: Viale Shakespeare 47, Rome, 00144. Administration Centre: Via Del Vespro 75, Messina 98122. Partita Iva/VAT Number 11038671001.