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Is your financial planning up to date for 2020?

As we move into further into 2020, if you haven’t already done so, take time to check your tax planning, investments, pensions and estate planning are all on track to protect your family’s long-term wealth.

Tax planning

First, make sure you know where you are resident for tax purposes, especially if you are new to Portugal or also spend time in the UK. You then want to structure your investments and wealth in the most suitable way to minimise taxation – in Portugal, the UK and wherever you have financial interests – while meeting your obligations.

Under the ‘automatic exchange of information’ regime, over 100 countries are now sharing data on residents’ overseas income and assets, so your tax office will receive financial information about you without having to ask for it. Cross-border tax planning is complex, so take specialist advice to get it right and avoid potential penalties.

Savings and investments

If you do not have a financial plan in place for Portugal, take a fresh look at your savings and investments. Have you taken advantage of suitable tax-efficient opportunities?

Successful investing is about having a strategy specifically based around your personal circumstances, time horizon, needs, aims and risk tolerance. You should ensure you have adequate diversification to avoid over-exposure to any given country (including the UK), asset type, sector or company. Explore investment structures that allow multi-currency flexibility to help minimise exchange rate risk.

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Estate planning 

It is vital to review your estate planning when living in Portugal, as both succession law and tax work very differently to the UK.

For example, Portugal’s ‘forced heirship’ rules could automatically pass a significant proportion of your worldwide estate to your direct family, whatever your intentions. You can specify in your will for the EU regulation ‘Brussels IV’ to apply relevant British law to your estate instead, but take care to understand your options and any tax implications.

If you remain UK domiciled – as many expatriates do – you continue to be liable for UK inheritance tax, so you should plan to reduce this liability for your heirs.

To bring all these complex elements together and avoid missing out on suitable opportunities, take expert, cross-border advice. Spending time on a financial health-check now can secure peace of mind that you and your family are in the best position to enjoy a prosperous 2020 and beyond.

Summarised tax information is based upon our understanding of current laws and practices which may change.  Individuals should seek personalised advice.

You can find other financial advisory articles by visiting Expats Portugal investment partner Blevin Franks website.

By Matthew Krystman, Partner, Blevins Franks

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