UK taxman using digital specialists to protect expat investors

by Ray Clancy on March 20, 2014

HMRC, the UK’s tax gathering body, is using digital specialists to help protect expat investors by monitoring products and services.

The decision comes after a high profile case where a British expat living in Spain saw his pension fall from £89,000 to just £20,000 due to inappropriate financial advice.

us expat taxes

HMRC have recruited more digital specialists to help monitor and minimise the risks associated with wealth accumulation

The retiree, who has not been named, invested in a Strategic Growth fund which proved to be substandard and was eventually suspended after a long period of poor performance.

He first noticed the problem when his quarterly pension payment failed to arrive. He was furious as he had asked for a medium risk investment fund when in fact his money had been out in a high risk fund.

In this case the expat investor got his money back, but HMRC is warning that there are a lot of unapproved products and services that are specifically marketed at expats and they need to make sure they are getting the best advice.

According to Pryce Warner International Group, which has 40 years of experience in providing comprehensive financial advice to the global expat community, expat retirees looking to optimise retirement funds can never be too careful when it comes to choosing the right financial product or provider.

‘This case perfectly illustrates the importance of identifying a reputable company whose experienced advisors can protect your best interests. We believe that a policy of only using funds with proven track records in client portfolios is essential when ensuring the protection and growth of a client’s investments and assets,’ said David Retikin, director of operations at Pryce Warner International.

HMRC is responsible for safeguarding unsuspecting victims from substandard financial products and services and although the above case was related to a perfectly viable product, there are many more aspects such as the advice given, which can fail to satisfy the conditions of their scrutiny.

This is why HMRC have now recruited more digital specialists to help monitor and minimise the risks associated with wealth accumulation. Financial planning of any kind contains an inherent element of risk that comes with each investment option presented and although investors can usually specify the degree of risk involved in their pension and retirement planning, there are no guarantees that the performance of any given fund will live up to expectations amidst future marketplace activity. But there is more security and stability in products that are approved by HMRC.

‘Internationally, the limitations of state pension systems have opened people’s eyes to the need for private pension planning. Unfortunately, few investors stop to consider the potential impact of acting upon poor advice,’ Retikin explained.

He pointed out that there are many financial products sold to savers, investors and retirees which do not have proven track records. There is an array of pension products and retirement plans such as the tax friendly QNUPS (Qualified Non-UK Pension Scheme,) which can provide future expats with an appropriate balance in risk and return.

‘Professional management and investment diversification along with regular review of your savings and investments is a must. This is one of the most effective forms of asset protection,’ added Retikin.

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