Golden Visa Opportunities: The Top 10 Interesting Programs

What a fantastic thread. I already know about the low corporation tax rate in Ireland for IT companies and have spent much of the last few months wondering what the chancellor is going to do to make the UK an attractive place to run an IT company once the UK finally leaves the EU. With so much of our business now happening online and particularly since the impact of Covid-19 moved much of our work on to Zoom, Teams, Skype and elsewhere there is the potential for much of our work to go abroad. I could do a large portion of my work sitting in a villa in Portugal, or a ski chalet in Austria for example.

With respect to the rest of it I was aware of some of the countries but not all. I have had former colleagues who have moved their pensions out to retire in Portugal or elsewhere although some have chosen to move them via Cyprus. Anyone know why this is?

Also, in the UK we are not allowed to hold residential property in a pension. Is this also the case in all these other countries? Or can you hold residential property in your pension outside the UK?

Great read.
As I understand it, there is another good thing about Bulgaria. If you sell a property owned by you for 3 years or more you can sell one of those a year free of capital gains tax. If you owned it 5 years or more you can sell 3 a year free of capital gains tax.

Reply to the comment left by Beaver at 27/10/2020 - 13:13I’m not a professional international tax accountant but I’ve done some research.
If your a landlord with UK rental properties then you have two major taxes to pay, income tax on the rents and Capital Gains Tax if/when you sell up.
If UK resident then you will always pay both of these taxes, unless Resident but Non Domiciled I believe.
If you become UK non resident then depending on which country you move to you may or may not pay those taxes in your new country. Certainly the UK requires you to file a tax return on your UK rents wherever you are living in the world but your new country if it has a DTA with the UK shouldn’t be charging income tax also. Regarding CGT some countries cover that also with a DTA and won’t charge it if the UK doesn’t also. If you’ve already been UK non resident for several years, as have I, then the UK only charges CGT on gains made after April 2015.
The reason Portugal and Cyprus are good places to have residency are because they also won’t charge CGT on the sale of your UK properties.
Other places to investigate a move to escape UK CGT are Andorra, Gibraltar, IOM, Monaco, Malta, Belize, Hong Kong, Jamaica, Sri Lanka, Thailand.
Other countries with I believe CGT rates below UK are Bulgaria, Croatia, Czech Republic, Romania, Russia, Ecuador, Malaysia, Costa Rica, New Zealand, Singapore.
None of this information is guaranteed as it was done a couple of years ago, you must do your own research and obtain your own professional advice.
Brexit will also create uncertainty, which is why I hate it, nothing to gain but lots to lose.
There was a previous posting on this subject from 2018 which is very interesting.
https://www.property118.com/uk-landlords-flocking-portugal/comment-page-6/#comments

Reply to the comment left by Bristol Landlord at 28/10/2020 - 15:23
Thanks, that's interesting. Like Brexit or not (and I think that everybody is entitled to their own view without criticism or the awful widespread allegations of bigotry around the time of the vote) it's just a fact that the UK voted out. And you've got to say to yourself, if the benefits of being in were so self-evident, why did the UK vote out?

What's interesting about this thread is just how different the tax laws are, even around the EU. I'm still unsure why my former colleague moved his *Pension* out via Cyprus.

All these fiscal policies evolved before we knew that the UK would be leaving the EU. Countries were competing for capital even then (except maybe France :-)).

It seems to me that with the widespread impact of Covid-19 and the way in which it has accelerated the move to doing business online, Brexit is now almost irrelevant. Yes if the government isn't careful countries like Ireland will take advantage of the situation; but they were doing it anyway. The move to online business is just going to accelerate changes that were already happening.

Reply to the comment left by Beaver at 28/10/2020 - 17:38
I think you’re being very misleading, I said I hated Brexit, I never said I hated the people who voted for Brexit, completely different things.
Millions of voters voted out of the EU because they were deliberately misled by the Brexit campaign and didn’t understand the true issues.
Many believed the lie that there would be millions more in the kitty for the NHS despite the fact of the EU having absolutely nothing to do with how the UK Govt decides to spend the UK tax payers money. There would be way more money available for the NHS if it wasn’t wasted on things like the Trident nuclear missile program or by allowing multinationals like Amazon to pay next to nothing in taxes.
Brexit is a gigantic con affecting the lives of millions of people and all for the benefit of a few well connected multi millionaires.
Here’s some articles;

https://www.theguardian.com/politics/2020/feb/01/brexit-pointless-masochistic-ambition-history-done

http://www.brexitshambles.com/a-thought-provoking-expose-shining-a-light-on-how-in-allowing-brexits-cheats-and-liars-to-avoid-punitive-justice-our-democracy-has-been-left-in-jeopardy/

http://www.brexitshambles.com/why-is-the-uk-government-so-keen-on-no-deal-the-astonishing-truth-behind-the-illusion-of-democracy/

Reply to the comment left by Bristol Landlord at 28/10/2020 - 20:48
I apologise: In my post I didn't mean to imply that *you* hated the people who voted out. But there was a general swell of people hating each other on the internet, and a lot of people calling those who voted out racists...I didn't mean you.

The reason for my interest here is this. I'm not just a landlord, I also run an internet business. And I use Stripe. I got this update from Stripe this morning.

"Hello,

At Stripe, we want to help you grow your business by making payments as simple, borderless, and programmable as the rest of the internet. With the Brexit deadline approaching, we'd like to reassure you that our services in Europe will continue to run without disruption, and your Stripe experience will be unaffected.

From 4 November 2020, the Stripe entity responsible for processing payments for Stripe accounts in Europe (excluding the UK and Switzerland) will change to our Irish regulated entity, Stripe Technology Europe Limited, instead of our UK regulated entity, Stripe Payments UK Limited (SPUKL). Stripe accounts based in the UK or Switzerland will continue to receive payment services from SPUKL. There’s no action needed from you, but if you’d like to learn more, you can read about Stripe’s preparation for Brexit here. ..."

So my point is not so much about Brexit per se, but about the fact that the *acceleration* of changes that are happening anyway caused by Covid-19 will damage the UK economy *if* the chancellor does not wake up to the fact that there is an increasing risk of businesses, capital and employment moving offshore.

He needs to make the UK an attractive place to run a business (especially an internet business), employ people, or spend your pension.

If not it will be a disaster.

While easy to change your tax residency, domicile is a much more complicated matter. People will still be paying UK income tax on the rental income, and as mentioned above will also pay CGT on gains accruing from 6 April 2015. The requirements to report the gain and pay the tax within 30 days will still exist. Simply going abroad for a few years in order to benefit from the non-resident rules, and then returning to the UK having disposed of the properties, may see you falling foul of the temporary non-residence rules for CGT, and all of the gain coming into the UK CGT remit.

Reply to the comment left by Olls63 at 31/10/2020 - 09:12
Presumably though you could just transfer the properties into a limited company before you went. Or perhaps own the property partly in your own name and partly in the name of a limited company. Whether that should be as joint tenants or tenants in common I wouldn't know. Or perhaps if it was a small portfolio and you were married, own the properties jointly with your wife with one of you domiciled in the UK and one abroad.

BUT do people do this:
"Simply going abroad for a few years in order to benefit from the non-resident rules, and then returning to the UK having disposed of the properties, may see you falling foul of the temporary non-residence rules for CGT, and all of the gain coming into the UK CGT remit."
Is there a true benefit to doing so and if so where do they go?
TBH, I'd sell tomorrow but for the CGT noose hanging over me - if emigration was the genuine solution it's an option I'd happily take!!

Reply to the comment left by at 02/11/2020 - 12:48
My business is a small IT business. I'm UK-based and I've never worried much about going abroad because up until recently entrepreneur's relief was set at 10% for up to 10 million pounds per individual. You could also mitigate against excessive tax charges by paying into your pension. But you have to avoid the lifetime allowance and avoid paying more into your pension than your annual allowance, otherwise you are penalised.

As soon as IT businesses get to any significant size they end up competing with business from Ireland and elsewhere who pay a tiny fraction of the Corporation Tax we pay in the UK; so they go to Ireland, or perhaps Spain. So yes, I know people who have done this and were doing it a decade ago.

With respect to BTL property, it might be possible to avoid CGT by incorporating, and it might be possible to avoid paying excessive tax by paying from your company into your pension. Whether you could would depend on your age and circumstances. I've worked in other countries in Europe, I've worked in UK and New Zealand. I could move my pension, if not my property; but my property is managed by an agent so I could still manage to work offshore.

The big difference now is what just happened: Before Covid 19 I could have largely run my business from my desk. But customers and suppliers would still want to see us face to face so we would drive over and see them. *NOW* customers still want to do business but are *refusing* face to face meetings when previously they used to *ask* for them. The IT suppliers we used always were happy to do business online.

I actually had this discussion with my business partner last week; we discussed the fact that we could now run our business from somewhere in the sun, or near the snow. Now it would not be a problem because Covid-19 has brought a cultural shift in the way we do business.

Since Covid-19 more people are buying from Amazon and elsewhere than ever before. Businesses like Amazon always did use countries like Ireland or Luxembourg to pay less tax. Since Covid-19 though the service economy has started to move online. Lawyers consult on line. Accountants do. We do our accounts through Xero. Our accountants do not need to be in the UK. We use Stripe. We can take payment anywhere.

Sean Connery who just died was a famous SNP supporter. He was also famously one of those rockstars and film stars who like the Rolling Stones decided to take their assets and income offshore in the 1970s to escape the then Labour government's punitive tax regime. The difference now is that it is not just film stars that can do this. Minor TV celebrities have been doing it for years. The IT industry has been doing it for years but now, since Covid-19, we all accept and use systems that would allow many small businesses to take their businesses to the sun.

We always used to be able to rely on Labour governments to stimulate the flight of capital. Now the lines seem to be being blurred. The chancellor needs to wake up. This is the best time ever to leave the European Union. This is because all the prophets of doom who said that the economy would tank, and were wrong, will not be able to say that the decline in our economy (there will be some downward pressure but it will be minor) was due to Brexit. Brexit is an irrelevance compared to Covid. But the big thing is the cultural shift to doing business online.

The solution to your CGT problem is probably already now somebody who is operating offshore.