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Where Taxpayers and Advisers Meet

Confused Dinosaur - Emigrating/ Retiring to Israel

2ba4t
Posts: 1
Joined: Tue Mar 19, 2019 3:16 pm

Confused Dinosaur - Emigrating/ Retiring to Israel

Postby 2ba4t » Tue Mar 19, 2019 5:54 pm

I am very confused by all the following and would greatly appreciate any help or experience on all the competing factors:

1. we have bought outright a home in Israel and it will be ready in about a year when we shall emigrate
2. our current personal UK residence should produce a substantial sum which will be free for investment
3. our small investment ppties in UK produce about 6% net
4. my wife has an HMRC pension of 11K, we each have UK pensions together of 13K, and I have a small 2K Teachers Pension.
And I believe that
5. immigrants have a ten year Israeli tax free period only on earnings from abroad
6. during that time however the UK does tax all income from UK and from abroad so it is basically useless for that period.
7. UK taxes CGT from UK so that is also useless however if one is resident abroad and has no residence in UK then CGT is charged only on gains from 2015.
8. UK taxes all income, CGT and death duties on sources within the jurisdiction for ever.

and apparently
1 earnings from offshore investments portfolios are not taxed by UK[??] or Israel and therefore are truly tax free for 10 years
2 soon pensions will be not taxed under a new reciprocity agreement with Israel

and many other considerations of which I am unaware.

Questions
Which investments will be most tax effective and safe?
Property investments always seem safer but in Israel bring in only 3% apparently.
Is it worth my setting up a pension for myself from my UK company or will that be taxed anyway in UK.
What is a QROP and does it apply to us?

Many thanks anyone out there

D&C
Posts: 61
Joined: Thu Dec 22, 2016 10:04 pm

Re: Confused Dinosaur - Emigrating/ Retiring to Israel

Postby D&C » Tue Mar 19, 2019 10:54 pm

I'm not sure this is really appropriate for advice/suggestions from what are often anonymous posters.

Looks more like one for paid for (independent) financial advice

AnthonyR
Posts: 273
Joined: Wed Feb 08, 2017 2:33 pm

Re: Confused Dinosaur - Emigrating/ Retiring to Israel

Postby AnthonyR » Wed Mar 20, 2019 4:45 pm

As D&C says, this looks like retirement planning advice rather than tax advice (and you seem to have to tax points covered), so you should really see an IFA that covers international advice. Most of the posters here, as qualified as they may be, probably can't give any investment or retirement advice.

Quick answers to your questions:
1. Who knows ask an IFA!
2. See 1
3. UK pensions will give the company a tax deduction, but the income you draw will be taxable in the UK (unless transferred into QROPS).
4. QROPS is a Qualifying Recognised Overseas Pension Scheme. It's a non-UK pension scheme that has been sanctioned by HMRC as meeting certain criteria which allows you to transfer UK pension funds in without being treated and taxed as if you have drawn the pension. The rules became more complex last year with 25% exit charge being introduced if you and the pension aren't in the right place at the time of transfer.

Only thing I would add is that under point 6 you say UK taxes all income so the tax free period is useless. If you are not resident in the UK you will not be subject to income tax on non-UK income, only on UK income. This means that if you have investments (or a pension) based offshore the income won't be subject to UK income tax. Which obviously makes the Israeli deal more attractive.

Finally, bear in mind that unless you can confirm a change of Domicile (assuming you are UK domiciled or deemed domiciled) it's likely you'll be subject to UK IHT on your worldwide assets. In any event your UK assets will always be subject to UK IHT.
Anthony Rogers LLB CTA TEP
Fusion Partners LLP
anthony@fusionpartners.co.uk


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