Thousands of people are leaving the shores of the UK every year in search of a better life. Whether that means more sunshine, more affordable costs of living or less stress, the United Arab Emirates is quickly becoming one of the world’s most popular destinations for expats of all nationalities. Indeed, according to official 2010 statistics only 16.5% of residents in the UAE were born in the country. The influx of foreign investment and workers has led to the stunning developments that have made Abu Dhabi, Sharjah and Dubai some of the most modern metropolises on earth. But what can British expats expect from a move to this burgeoning country?
A High Standard of Living
The UAE has quickly become a modern and developed society, and its excellent healthcare system and range of services means moving to the country is much less of a culture shock to Brits that it once was. While Abu Dhabi in particular is a relatively expensive place to live, it still compares favourably to life in Britain; in fact, home-buyers will get far more for their money when purchasing property. With large areas of land, swimming pools and multiple bathrooms included in purchase prices, money simply goes further in the UAE
New Pension Arrangements
A recent development in the UAE means expats have the option of saving for their retirement via the Wealth Builder Plan from the National Bank of Abu Dhabi. Offered through employers, it is the first scheme in the country that allows both workers and employers to contribute to a number of investment funds designed to provide for retirement. And while the UAE remains one of the few emerging economies to offer a state-sponsored pension, this new product is likely to be followed by several more – giving expats options when it comes to investing for their future.
The UAE does not impose income tax, capital gains tax or inheritance tax on individuals, so where British expats can secure a QROPS transfer for their UK-based pension funds, a tax-free retirement could be a very real possibility. Offshore tax planning experts can advise people on which schemes – recognised by the HMRC – will best serve UAE residents. Once residents have lived in the UAE for five years, their responsibilities towards HMRC lapse – but only if they have a qualifying expatriate pension.
Another massive benefit for expats involves providing for loved ones after death. Expats who pass away will be able to bequeath the remaining funds in their QROPS pension without the imposition of inheritance tax by the UK government. Fund-holders should, however, have a legally-binding Will in place, as Sharia law applies to personal wealth in the UAE.
Whilst there are currently no QROPS schemes based in the UAE, a financial advisor will recommend a suitable scheme in a jurisdiction such as Jersey, the Isle of Man or Malta. As well as the obvious tax benefits, a QROPS scheme will allow expats in the UAE to manage their funds in the local currency – the dirham. Fund-holders will also be able to invest their funds almost anywhere in the world; something that is not usually possible with British-based pensions.
The UAE is a truly stunning country that has risen from the harsh desert wastelands of the Middle-East in little over a decade. With some careful financial planning and the right investments, retiring or working in this awe-inspiring country could mean a standard of living far greater than that possible in the UK.
Which Offshore is an online consumer resource for those seeking information and advice pertaining to matters related to expatriate life and offshore finance. For more information, please visit – http://www.whichoffshore.com/