New research from Old Mutual International and Quilter Cheviot found that 64% of expats working in the UAE plan to return back to their home country when they retire. This highlights the need for expats to choose savings and investment solutions which are suitable and portable back to their home country.
A breakdown of the data shows that 75% of North American expats plan to return back to America when they retire, 62% of European (excluding UK) expats plan to return to Europe when they retire, and 52% of UK expats plan to return to the UK when they retire.
9% of expats plan to remain in the UAE when they retire. This contradicts the belief that all expats leave the UAE once they hit retirement. There are strict rules in place for expats regarding their ability to retire in the region, with some property and business owners perhaps looking to receive residency status.
16% of expats plan to retire somewhere other than their home country or the UAE, with 11% not sure yet where they will retire.
With so many UK expats stating their intention to return to the UK, there is a very clear need for a portable investment solution to enable them to take their savings home in a tax efficient way.
There are many investment options open to UK expats to invest in whilst overseas, but in order for the products to be tax efficient and avoid a UK deemed gain tax charge when they return to the UK, they impose limitations on the assets which can be held.
Old Mutual International’s new innovative Wealth Portfolio is different, and can offer UK expats working in the region an investment solution that invests in a wide range of assets but avoids the UK deemed gain tax charge.
The new solution sees Old Mutual International appoint Quilter Cheviot, a discretionary fund manager, to manage the investment portfolio linked to the bond. As it removes any client influence over the investment choice or asset selection, the bond is not regarded as a ‘highly personalised portfolio bond’ and therefore the UK deemed gain tax charge of 15% will not be applied upon the expats return to the UK.
This means that the bond is able to invest in a broader range of assets, such as direct equities, than is usually permitted within a generic international portfolio bond in the UK.
Paul Evans, Head of Region, Middle East & Africa, Old Mutual International, comments:
“The research shows just how many expats plan to retire back to their home country and highlights the importance of having a portable investment solution available for them. For UK expats, our new Wealth Portfolio is a great example of how we have created an innovative investment solution. It will enable UK expats to save for their future while working in the UAE, but is portable back to the UK without fear of incurring a deemed gain tax charge by HMRC when they return.
“Working with Quilter Cheviot, part of Old Mutual Wealth, our parent company, to deliver the solution is real coup for us. Quilter Cheviot is a London headquartered, award winning discretionary fund manager with a representative office in the Dubai International Financial Centre. Discretionary investment management is growing in popularity in the region as people see real tangible benefits in delegating portfolio management to investment experts.”
*Old Mutual International and Quilter Cheviot investment and retirement research, August 2017. A targeted piece of research, aimed specifically at investors living in the UAE (mainly Dubai and Abu Dhabi) who use the services of a professional to invest in the stock market. Investors needed to have a minimum of US$50,000 invested. 130 responses were received in total and were a representative cross section of those living in the UAE (expats, NRIs and GCC Nationals).
Notes to Editors:
Old Mutual International
Old Mutual International is a leading cross-border provider of financial solutions for local and expatriate investors. The business is based on Isle of Man and provides operational support to Old Mutual International clients in the UK, Europe, Singapore, Hong Kong, Dubai, Latin America and South Africa.
Old Mutual International is part of Old Mutual Wealth
Old Mutual Wealth is a leading wealth management business in the UK and internationally, helping to create prosperity for the generations of today and tomorrow.
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Old Mutual Wealth oversees £127.3 billion in customer investments (as at 30 June 2017).
Old Mutual Wealth is part of Old Mutual plc, a FTSE 100 group that provides life assurance, asset management, banking and general insurance. Old Mutual is trusted by more than 19.4 million (as at 31 December 2016) customers across the world and has a total of £212.3 billion of assets under management (as at 30 June 2017).
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