One of the most frequently asked questions from our expatriate clients is “Where should I retire?”. Climate, language and a low cost of living are often some of the first factors considered, but it is important to carefully think about the broader, long-term immigration and financial and tax planning implications of any retirement destination. Huw Wedlock, Director of our Singapore Office, tackles what’s on offer when the world is your oyster.
In years gone by there were a number of destinations which proved perennially popular for British expatriates retiring. These tended to fall into two camps – a return home to the UK after time overseas or the decision to move to a sunnier, warmer climate such as one of the Mediterranean hotspots, or perhaps to a Commonwealth country such as New Zealand or Canada.
Today, with global travel more accessible, and technology providing a very reliable link home, many expatriates are considering less well-known destinations. Tools such as the Henley Passport Index provide an interesting slant on global mobility – its survey of 199 passports against 227 different travel destinations, including countries, territories, and micro-states, gives a useful check on the number of destinations holders with different passports can access without a visa.
In fact it’s important to note that there may be barriers to entry for your ideal location and a range of residency and citizenship schemes to take account of, as well as the tax and financial considerations of each jurisdiction. Citizenship-by-Investment or golden visa programs can be an attractive option, and by holding a second passport or residence permit you can enjoy greater travel mobility and settlement freedom. A range of opportunities are available with over 100 countries now offering some form of investment migration programme to encourage foreigners to choose them as a home, in exchange for a significant investment.
A few of the most interesting, and up and coming, retirement destinations include:
Choosing to retire in Australia can offer a relaxed pace of life, English language, warm climate and plenty to explore. An investment of AUD 1.5 million in government bonds will secure you a four-year provisional visa that provides a path to permanent residence after the four years is up — provided that you meet the residential requirements.
Malaysia offers a true multi-ethnic, multi-cultural, and multi-lingual society and can be an attractive option for retirees. There is no age limit or residence requirement, as long as you have proof of bankable assets, offshore income, can deposit a minimum amount of MYR 300,000 (approximately USD 72,500) in the Malaysian bank account for 10 years (that amount is halved if you’re above 50 years old), undertake a medical test and purchase medical insurance.
This Mediterranean favourite provides a pleasant climate, stunning coastline and reasonably priced property, all within easy reach of the UK. The Portuguese government has launched a Golden Residence Permit Program, to encourage foreigners to the country when making a significant capital transfer or purchasing a property from as low as EUR 350,000.
The warm, tropical climate, focus on well-being with excellent medical facilities and low cost of living make Thailand an attractive option for retirees. Five, 10 or 20-year visas are available for a one-time fee of USD 16,000.
The UK connection
The tax you pay in your retirement destination may differ greatly. It is worth noting that you may also have an ongoing liability to UK tax, particularly if you retain a UK property or make frequent visits back home which impact on your non-resident status. It’s also useful to check whether your retirement destination has a friendly tax agreement with the UK.
A question of domicile
Domicile is one area which very much matters if you choose to retire abroad. Your domicile is assigned to you at your time of birth, and stays with you throughout your life, regardless of whether you are resident or not in a particular country. Those with a British domicile will be liable to UK Inheritance Tax, no matter where they live, and pass away. It is possible to change your domicile, but it is a significant undertaking. As a result, considering your estate planning as part of your decision to retire away from the UK will be important.
No matter where you choose to retire it is important to plan ahead and take advice from international experts to ensure that your tax and financial affairs are properly structured. This will then leave you free to enjoy the exciting lifestyle on offer in your chosen new home.