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Category: FINANCIAL COMMENTARY

COVID 19 and why you should make sure your Financial Planning is in order Immediately

My name is Noel Ranson, a Senior Consultant with Business Class Asia, and I am sure you are more than well aware that Covid- 19 is with us and not going away for the foreseeable future. The numbers just keep on rising and the new normal, cycle of freedoms, limited and unlimited and Lockdowns is upon us. With waves of Covid the plague that will not go away, a rinse and repeat cycle across the globe, with no sign of total vaccination any time in the next year, except maybe the UK and USA.

This brings me to the point I want to share. Earlier this year my Father at the age of 76 died due to Covid with him in the UK and me in Thailand. My sister his only other immediate family in hospital with Covid in a coma fighting for her life. This left me with the task of arranging details for his funeral and putting his finances in order. Plus making sure that once my sister came out of hospital she had a roof over her head to recover (yes she did survive after 5 weeks in a coma).

I have been a financial advisor since 1999 in one role or another, yet me and my father had only ever had limited conversations about Wills and life assurance and what he wanted done on his death. His death was sudden and unexpected and raised a number of problems and stressful situations, which even though this is my job I still was not in control of the situation.

Let’s start with the basic first thing that everyone should do, the Will. My father had a Will which was discovered 3 weeks after his death by his ex-wife of over 20 years divorced. She had to be included in the process as I was unable to get out and back to Thailand to physically be in the UK. So this solved several questions. He wanted to be cremated which I did not know, he wanted to leave his assets to me and my sister on an equal basis and his books (he was a prolific reader of 4 or 5 books a week) left to charity and the library. At his funeral he wanted at least 1 Queen Song played, his favourite band. This Will as basic as it was allowed us as a family to carry out his final wishes and made it easy to decide what we could do to honour his wishes.

The reason I share this personal information is that this is a situation which happens in Covid and non Covid times. Yet we don’t tend to talk about it or plan accordingly.

Other problems being in Thailand and not living in the UK for 11 years. Trying to get my father’s bank account with no credit profile in the UK. Then arranging the Death certificate and the brilliant lady who emailed me the death certificate even though they are only allowed to post it, and I have no UK address. The brilliant UK government website which will allow them to tell the various departments to cancel the driving licence, pensions and anything government related.

A side note on UK rental law, my father rented the house that him and my sister lived in and had lived there 20 years. My sister was not on the tenancy agreement. This means that she had limited rights to continue to live in the property and as she was in hospital the landlord could have entered the property and evicted her after serving legal notice. Please make sure that family members over 18 are named on any tenancy agreements which is a simple process and would negate this unnecessary stress. The Landlord after me talking to him and explaining all these facts was kind enough to give my sister over a month to move out when she was out of hospital.

What you should consider as an expat. How can I protect myself and my loved ones?

  • Health Insurance – In the event you get sick how much is your health and life worth. Would you rather be in whatever local country health system is available overstretched, under staffed and under resourced. Or the best available hospital that will immediately admit you and do everything they can to help you.
  • Life Assurance – Not for the living, but if you love your family, why would you not have the minimum amount to bury you or send your body home and bury you? Plus how are your family going to live when you are dead, what lifestyle are they going to have then? If you love your family make sure they are financially secure if something does happen to you.
  • A Will – This is an absolute must for anyone. Firstly it is a legal document informing people what should happen with your assets. Secondly it also tells everyone if you have specific wishes i.e. cremation, special funeral arrangements, charitable donations, specific items you want people to have. Importantly make sure that every country you have assets in you also have a separate Will in that Country, and compliant with the Country concerned, and if need be in the language of the country.
  • Trust planning – A discretionary Trust is easy and cheap set up. It means that there is no probate required as it’s outside your estate. It also means that the laws of Intestacy don’t apply as it does not form part of your estate. It will make sure that your assets get to your loved ones quickly or slowly if required. A Trust has Trustees and in conjunction with a Will forms a great legal structure to make sure that instructions are followed for how your assets and monies, wishes are carried out. This also provides a structure to make sure that if there are several beneficiaries in multiple jurisdictions then this can all be decided already in how much and who inherits what. Money changes people no matter how well all previous children and partners and second families get on whilst you are alive, this can change when you die. This also allows for young children to be provided for at a future date, for University or weddings or specific dates like 18th or 21st birthdays before they inherit money. This makes sure that the money goes to provide a lifestyle for the correct people involved. It also stops family members getting involved, and maybe taking and using the money before your children require the money.

Thank you for reading and if this has prompted one person in to action or helped one person then I am happy to have assisted you.

If you want any help with individual advice regarding any of the above information please feel free to contact me.

Noel Ranson, Senior Consultant

noelranson@businessclassasia.com

Business Class Asia

By bca52FINANCIAL COMMENTARY No comments yet

Tax Residency, Beneficial Owners & Why It Matters To You…

Since the uncovering of the Panama (2016) and Paradise (2017) Papers, the search for the Ultimate Beneficial Owners (UBO’s) of financial accounts, companies and trusts has been relentless by tax authorities all over the world. Many Governments since that time have set up HNW Tax Departments with the sole aim of tracking and claiming taxes on the hidden assets. These teams can be like ‘dogs with bones’, and with the ongoing pandemic governments are having to bolster economies for a longer period than expected, and the direct and indirect taxes they take can only increase.

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“Beneficial ownership is a term in domestic and international commercial law which refers to the natural person or persons “who ultimately own or control a legal entity or arrangement, such as a company, a trust, or a foundation”. The legal owner (i.e. the owner on the record) may be described as the “registered owner”, and if they are not the beneficial owner they may be described as a “nominee”.”

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With the rollout of global financial reporting legislation under Common Reporting Standards (CRS) by OECD member countries, and prior to that the U.S. Legislation around Foreign Account Tax Compliance Act (FATCA), the onboarding process for both personal and company accounts has increased the amount of information that is required to open these accounts, structures and companies. Previous proof of identity and proof of address documents are now accompanied by Tax Identification Numbers, Country of Tax Residency and also source of funds details, all this data is more than likely followed by online background checks, which can uncover additional information that will need further clarification. Something previously as simple as opening a personal bank account, can now be a drawn out affair with the chance that the application may not be accepted.

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The international basis of taxation varies widely depending on the jurisdiction where you are tax resident, this can be as simple as no personal taxation in countries such as Monaco and the UAE. In Countries such as Singapore and Hong Kong you are taxed on a territorial basis, whereby you are only charged on profits and income which arise in or are derived from within the country, this being a reason why Hong Kong is favoured for the formation of companies. In the UK and many European countries you are taxed on a residency basis, with most on a worldwide basis, but can also be based on the remitted profits and income brought back into the country. For Eritrea and the USA there is no getting away from any taxation on any global income or profits as these countries are taxed on a citizenship basis, unless you don’t file, which is becoming harder to do because of the exchanges of information slowly coming into play.

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With the global move towards International Tax Transparency Standards, the exchange of information is now primarily automated through the likes of CRS & FATCA, and that information needs to include controlling persons of financial accounts. There is also the possibility outside of these frameworks that exchange of information is also made by request, again with beneficial ownership having to be available and accessible. The days of privacy, not meaning secrecy, is becoming less of a possibility in our financial affairs in this age, and complying to the modern regulatory global framework is becoming cumbersome to say the least.

Tax evasion is primarily why the net has been tightened, both on a corporate and personal level, but as mentioned previously current deficits in many developed countries can only lead to a further tightening. Tax avoidance is less likely within the current economic climate making efficient tax planning even harder to do within the regulations, which becomes complicated when you are involved in a number of different jurisdictions around the world. Detailed planning is essential and needs to take into consideration Double Taxation Agreements and the tax treatment of different types of structures by the numerous tax authorities around the world.

Selection of the type of structure you work within, and where you work from to efficiently control the level of taxation is hugely important, and could mean the difference to paying a legitimate lower tax to paying away a higher amount on Capital Gains, Dividends or even Income. Some countries have no recognition of Trusts, and are literally looked straight through, with no consideration given to the individuals involved in the legal agreement except for the settlor or grantor of the trust, who is seen essentially as the beneficial owner. Other jurisdictions recognise the legal arrangement of trusts and have legislation in place for the legitimate use of trusts in estate planing and asset protection. Again with other structures, special purpose vehicles, foundations etc, both can be treated differently by different jurisdictions.

Making sure you are using the right structure will come down to your residence, nationality, purpose, time scale, access and liquidity etc. it would never be a case of one size fits all. The exchange of information is driving the way we are taxed and having the correct structures in place that attract the least amount of tax is smart planning, not tax evasion. Smart planning and checking the details is essential. Working within global legislation allows you to plan effectively and protect longer term what you have been working towards, whether that’s building a business or a legacy to leave to your family.

By bca52FINANCIAL COMMENTARY No comments yet

Financial Planning in the Covid19 World

Tuesday 29th September, 18:30

In these challenging times it is good to make sure that we are all getting as much correct information as possible. With this in mind we would like to invite you to a networking and presentation evening to cover some areas that shouldn’t be overlooked with regard to covid-19 financial planning. 

The event will be held in the prestigious Pacific City Club, Two Pacific Place in the Emperor Room on the 28th Floor and networking afterwards in the Bar on the 29th Floor.

The idea of the event is that we are well informed, and as well prepared as possible in this time of Covid19. The topics that will be covered will include Importance of planning, Wills, Trusts, Country laws, Health and Life insurance, Government requirements due to Covid19, short/medium/long term plans.

The speakers will be Noel Ranson an international adviser of 21 years experience both in the UK and Internationally, plus a guest speaker talking about Health Insurance.

The event will open at 18.30 and the talk will be begin at 19.00 and the aim is to be finished by 19.45 including Q & A which we will hold after the presentations. We are then able to network in the Bar until 21.00 when the Club closes.

Please also be aware there is a dress code which is smart casual or business attire.

For reservations please email enquiries at businessclassasia.com or leave a comment below


Update: Thank you all for attending. Our covid-19 financial planning event was a great success. We had a wonderful time answering questions about planning during unprecedented crises. If you are just seeing this now, stay tuned for our next events coming in November 2020 and January 2021 or contact us  to schedule a personal appointment. 

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UK Property Tax Overview

With the onset of Covid 19, many people are looking more closely as to where they invest their money. Traditionally the stock Markets have been the first port of call for most people, but with a downturn in the Global economy due to lockdowns, causing uncertainty, many people are looking at physical assets such as Property for longer term investment, and in my opinion there is no better place to look for property investment than London.

Pent up demand has built up over several years due to the uncertainty around Brexit, and once this issue looked like it was settled, interest and activity in the property market boomed. Covid 19 slowed things down again, but interest in the property market never stopped, and post lockdown the opportunities available in the market look very attractive. On top of this for overseas buyers, we have a period until April next year before the overseas Stamp duty increase comes into force, the reduction in current Stamp duty, and an extremely attractive exchange rate to Sterling, especially so for Thai Based investors holding Baht and/ or USD.

Tax on UK Assets.

Before the Overseas stamp duty rate of 2% commences in April 2021, Overseas buyers are treated exactly the same as local buyers, in that they will pay the same duties and taxes and can own the property outright with all the benefits that entails. The downside of this is that the property is subject to the same taxes locals will pay, including Inheritance Tax ( death duty) at a rate of 40% on all UK based assets in addition to the zero rated band of GBP 325,000, Capital Gains Tax which depending on value taxes any investment gain on the sale of the asset at a rate of 18% or 28%. In addition to this, there is the cost of Stamp Duty Land tax on Purchase, which is mostly tiered, depending on the purchase price. However, the Buy to let/second property rate of 3%, and the overseas buyer duty, will be calculated on the full property value. If the property is rented out, then income tax may be payable on rental income.

Even with the above taxes, the UK market, and especially London, is an extremely attractive place to invest, with an excellent track record over many decades of growth, a buoyant secondary and rental market, and one of the best legal systems in the world, ensuring you know exactly what you are buying and what will be included. Buying through one of the main developers will reduce construction risk to a minimum if buying off plan. High rates of Capital growth can be acheived over the medium to longer term, and many people will plan to utilize the property for their own use, giving a UK base for them and their families. However, there are many steps that can be taken, to ensure that the Capital growth, and the full value of the of Property can remain in the hands of yourself and eventually your family in the event of a sale of the property, or the death of the owner. Further to this, depending on circumstances, we can ensure that the correct SDLT has been paid, and if not a significant sum could be refunded from Stamp Duty Land Tax paid within the last 3 years or a reduction in current Stamp Duty that is due to be paid. Experts will ensure all allowances have been utilized to reduce this amount if possible and will only charge if they are convinced a refund can be obtained.

Tax Efficient Investing in the UK Property Market

If you are planning to hold the funds to be invested in the UK market for a long period of time and potentially to pass the assets down to your children,  or you currently own property in the UK and wish to pass this to your beneficiaries in a tax efficient manner, whilst utilizing the property , for income in the meantime, then there are some extremely beneficial ways for you to achieve this. UK based assets invested through, or assigned to these HMRC regulated schemes, have the benefit of being removed from your Inheritance tax liability. For a property worth GBP 2 million, this will save the estate around GBP 670,000 OR 26,000,000 Baht. In addition to this, as long as the funds remain in the scheme, even if it is used to purchase additional or upgraded assets, the sale of the asset will not be subject to any Capital Gains tax, allowing the total amount of gain to be used to purchase the new asset.

QNUPs

Qualifying Non-UK pensions Legislation was established by Her Majesties Revenue department in 2006, and in 2010, the Legislation was reformed to make any assets invested in the scheme by the pension holder free from both Inheritance and Capital Gains Tax. So long as the scheme meets the Pension rules in the UK, and the scheme is set up to provide an achievable income in the future, for the pension holder, any value of asset and many different kinds of asset classes can be held including Property. This will work best when the property is mortgage free, but in some schemes borrowing can be arranged if needed. Assets can be purchased directly by the scheme, or existing assets can be assigned to the scheme, although this can incur a Stamp duty fee in some cases.

This is a highly effective and tax efficient way to invest in the UK, if you are happy for the funds to remain in the scheme, and plan to invest over the longer term. It does allow asset exchange and will provide an income which can be taken from age 55 onwards. It will, by following the Pension rules allow assets to be passed on to beneficiaries and for these to be sold and reinvested without the Inland revenue taxing a large portion of this asset.

This will not meet the requirements of every investor looking at the UK Property Market, but for high value properties it can be a very effective way to secure the asset in the right circumstances.

 

Lee Stevens, Area Manager

By bca52FINANCIAL COMMENTARY, Property Blog No comments yet

Key-Person Insurance for Your Business

We spend so much time and effort covering the basics of insurance, health, car, home & contents, that a majority of the time we totally miss areas that are the most important. One of these being Key-Person Insurance or Shareholder Protection.

Key-Person Insurance

So you’ve built the business, operating profits are strong, but you’re worried that most of that profit is generated by a small number of employees/directors, you may be in a position that you or a colleague are the main breadwinners of the firm, even to the point that the knowledge and experience that generates profit is also with a select few.

How could you cope with this within the firm if one of these individuals had a sudden death or even extended or permanent incapacitation? How do you cover the cost of this missing person? This could be specialist recruitment costs to find a replacement. How do you cover the revenue loses while adjustments within the firm are made? Losing this individual could also have a major effect on terms within any debt liabilities, are you in a position to cover any early recall of this debt?

There are so many uncertainties that need to be covered and, using Keyman/Shareholder Protection you can make sure that the firm can continue as a going concern through these issues or wind the company down in a calm and orderly fashion if this is what the remaining partners and beneficiaries wish.

Losses To Cover

  • Costs for temporary replacements when Key Person can no longer work, this could also cover costs of longer term recruitment and training of replacements staff/directors.
  • Cover to protect profits/revenue. Lost sales income, losses from delayed or canceled business projects. Loss of skills or intellectual property.
  • Cover business loans or any debt liabilities that the Key-person/Director is a Guarantor of.
  • Also consider cover to protect shareholders – partnership interests.

Who To Cover

It’s essential to cover anyone within the business who has a major impact on the direction of the company and is directly connected to the financial success of the company. This could be those who have direct responsibility for intellectual property, specific skills, experience and leadership roles within the firm. This could also be your lead sales person if that individual is generating considerably more revenue than the rest of the sales team.

Who would have a serious impact on the firm if you lost them. Company directors, IT specialists, Managing Directors and Head of Product Development. Assess the individuals and what could be the potential loss or disruption to the company if suddenly they were missing.

Calculate A Value to the Key-Person

Here we need to think about loss of revenue/profits, how much to replace with temporary or permanent staff, also costs to cover any debt or debt restructuring. below are tow simple ways to calculate basic coverage.

Multiple of Salary Method

The multiple of salary method is very simple – it is usually based on a calculation of either five or ten times the key person’s salary. Although simple to work out, it does have drawbacks, including: the salary may not reflect the person’s value to the company, salary is not usually the total earnings of a key person – total remuneration is often made up of other benefits, such as pension contributions.

Proportion of Profit Formula

The second method is the proportion of profit formula. Again, this uses the key person’s salary but also takes into account profits and the time it might take to recruit a replacement. The formula is: (Salary x last year’s profit x number of years to replace)/Total salary bill

Policy Ownership

The key-person insurance policy can be owned by the Company, the individual covered or by a third party, most commonly known for the company to hold the policy. In some jurisdictions the tax issues need to be considered on the most tax effective way to hold the policy.

Advantages

  • Lump sum paid to cope with loses.
  • Able to buy deceased partner/directors shareholding.
  • Premium paid can be a business expense in some jurisdictions.
  • Term plan, premiums remain at set amount.
  • Safeguards beneficiaries/family from business shocks or cycles.

Disadvantages

  • Some countries have no exemptions from income Tax on a claim amount or maturity.
  • Policy surrendered amount endorsed could be taxed in hands of key-person as profit in lieu of salary.

The above is a basic overview of what to consider when you are running a business within the SME world. There is so much more to consider when looking at the level of cover, how to hold the policies, whether a trust would be suitable, how to cover a number of partners within a company and how to structure those policies.

For more information or to discuss in more details please contact enquiries@businessclassasia.com and visit our page for businesses.

By bca52FINANCIAL COMMENTARY No comments yet
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An Evening With Business Class Asia, 1st August 2019

An Evening with Business Class Asia. 1st August 2019

Protecting You, Your Family and Your Future.

Many thanks to all who attended, we hope you found the evening informative and helpful. Also thanks to Lee Stevensfor the presentation covering how to plan effectively while living and retiring offshore. Topics covered the essentials on having an up to date Will, Protecting your Assets and Estate through Trusts and Tax Efficient Retirement Planning, the evening also covered briefly health and life protection for the unexpected emergencies in life.

Thanks also to Pacific City Clubfor the fantastic venue and refreshments, also your help with organizing the event. For future events please follow us and if you need information on the subjects covered please drop an email to

wills estateplanning retirementplanning iht pensionplanning retirementincome successionplanning BCA thailand

By bca52FINANCIAL COMMENTARY No comments yet

Protecting you, your family and your future

Many think wealth management is simply a question of saving as much as you can, managing those assets to provide a comfortable retirement and being heavily insured to protect the family, think again. With the introduction of the Common Reporting Standards slowly being accepted and adopted by more countries, Estate Planning is becoming much more crucial to Families long term financial planning in all jurisdictions.

Producing a long-term financial plan to meet your future costs of both the expected and the unexpected is a core part of financial planning. There are also just as equally more important considerations in planning for the long-term financial security of a client, more so clients with families.

Estate planning:

Estate planning is essential to ensure that death taxes are minimized and also that the estate is smoothly passed to intended heirs. As a wealth manager, I meet and work with people whose circumstances are hugely different. Many clients have multiple bank accounts and investments, which can be spread across different countries and continents for many different reasons. It is often necessary to restructure and simplify these arrangements to ensure a smooth transition to intended beneficiaries.

Investment vehicles offered by Financial Institutions can be very flexible and will sometimes incorporate all of a client’s financial planning needs, including long-term tax planning, but with CRS this now makes some of these vehicles less estate friendly. However the personal circumstances and long term plans of individuals can use additional financial planning tools to ensure maximum asset protection.

Tax planning:

With the start of Common Reporting Standards (CRS) coming in to effect this year long term tax planning should be a core consideration in any form of financial restructuring. CRS allows Governments to collect information on Tax residents who hold financial accounts in other jurisdictions who have signed the agreement. The reporting covers individuals, companies, including those utilizing trust or company structures. A person living outside of their home country may be currently free of the burdens of taxation & to some extent reporting, but future changes in personal circumstances may mean that tax could once again become an larger issue. This applies not just to those who are planning to return home but also, in some cases, to those who do not plan to return to their home countries.

Inheritance Tax:

A very dividing subject, of all the forms of taxation Inheritance Tax is probably the most uniformly despised. It is a tax on the assets of a deceased person, assets accumulated from income and gains that have usually already been taxed and so in a very real sense this represents double taxation. For those countries that continue to levy this form of tax, it is politically challenging, to say the least, to abolish a tax that many perceive as a tax on the ‘rich’ and so it is probably here to stay. Unfortunately the rules regarding Inheritance Tax are not uniform amongst those countries that still collect it.

The main goal of Inheritance Tax planning is to legitimately reduce the value of the residual estate of the client. As taxable thresholds, tax rates and gift tax provisions vary considerably between countries, the planning strategies will be highly personalized.

Probate:

The legal procedure for obtaining the release of an estate and distributing it to the beneficiaries, this can be a time consuming and frustrating process at a distressing time. It is important to understand that for some countries, until Inheritance Tax is paid and in full, the estate cannot pass to the rightful heirs. The use of insurance as a tool can help bridge the gap, while assets are tied up through probate. Probate to some extent can be avoided by using an appropriately structured trust or foundation as part of your estate planning.

Forced Heirship:

Some countries, especially in Europe, have laws that prevent disinheritance of children and spouses. The effect of this is that a will can be challenged and overturned if it does not meet the minimum statutory legacy requirements. Such laws can only be applied to the legal assets of the deceased. Assets that have been legitimately transferred to a legal trust or foundation are no longer the property of the deceased and so can be placed beyond the reach of such laws. The assets placed into a trust or foundation can then be applied in accordance with the wishes of the Settlor, for the benefit of those selected by the deceased and not those nominated by the Government in their country of origin or death.

Recording Your Wishes:

There are no excuses not to have a will. It eliminates misunderstandings, ensures that your wishes are carried out but more importantly it avoids family strife. In many countries, Western or otherwise, if you have made a will and subsequently get married, that existing will becomes legally invalid and so you need to draft a new one. Any major change in your personal circumstances should bring about a major review of your existing will.

Governments will continually look to increase tax revenues from residents and also non resident citizens, planning within these rules is crucial to make sure your not paying more than your share, but also to make sure you can protect your assets for the coming generations.

Business Class Asia is a leading financial planning and trust solution office which serves international clientele in Southeast Asia. Visit our page on personal wealth protection or contact us to schedule an appointment.

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Beginning Retirement Planning

Approximately half of pension savers don’t know how much they have accumulated under their retirement scheme, and of those who are saving 4 out of 10 aren’t saving enough.

The main stumbling point when it comes to providing funds for retirement, is how much? Do we save for the amount we expect we will need in retirement? or do we set aside what we can afford now? There are so many variables to consider when planning for retirement and there is no wrong or right way to achieve a secure retirement. Below are a few areas to consider to make sure we’re moving in the right direction.

Start Somewhere.

It makes sense to start with our current salary and work forward from there. There is no ideal amount to save, but 12 to 15% of current salary would be adequate when saving into a defined contribution pension scheme. At retirement we have the option to purchase an annuity which will provide an income for life, or drawdown the income and capital from the invested pension funds. As earnings increase during our careers, increasing our pensions savings in line with this would be prudent and therefore avoid the burden of excessive increases as we near retirement age.

Monitor Regularly.

Calculating and monitoring the projected pension fund value is crucial, and should be done on a regular basis to make sure we are keeping on track. Review the performance of the underlying investment, especially during volatile markets, make adjustments when needed. There are many online calculators, but these are based on a number of varied assumptions, they give at best rough estimates of the future value of the retirement fund. Closer to retirement with fewer variables online calculators can give a more accurate projection of retirement income and the future value of the pension fund.

Define an Action Plan.

How will income be taken once in retirement? Will a lump sum be taken from the pension pot before drawing down pension income? Is there a requirement for the pension to be passed on to a spouse or beneficiaries at death? Will income be taken from an annuity or will the pension remain invested and the income be taken from capital growth and income produced, via the investments within the pension. Careful consideration has to be given to these factors, for example currently an annuity in the UK for £100,000 will buy £4,741 of annual income. This income can vary of course depending on the type of annuity purchased, for example if the annuity rate is fixed or if for a joint life annuity we could find the annual income provided is lower.

Closer to Retirement.

As we get closer to retirement age we need to start to consider after work life, how much income is needed to support our lifestyle required in retirement. A useful guideline can be 2/3 of pre-retirement income, we will find hopefully that many major outgoings have been reduced closer to retirement, work related expenses and mortgages, supporting/educating children etc. Consider reducing risk exposure across the pension portfolio as retirement draws closer, major fluctuations are not welcome at this stage and large shortfalls in value are difficult to make up. During this period if income projections are not quite inline with expectations a significant increase in contributions can be made. This is also a period to consider additional assets that are held, such as rental property, other investments & savings and also entitlement to state pension schemes.

Tax Implications.

When reaching retirement consider which assets income will come from initially, depending on the structure of additional assets outside of our pensions it could be more tax efficient to delay drawdown from our pension schemes. Where we retire and where our pensions are domiciled is also a major factor on what taxes could be due on any income payable. What is the tax treatment on the income we drawdown, is pensions income taxed? How does the jurisdiction where our pension funds are held, if not in the same country as we live, tax the income drawdown? Do they tax at source or are we required to complete a tax return? Does the pension jurisdiction have a double taxation treaty with the country we will retire in? Are there more tax friendly jurisdictions where our pension funds can be held?

Have a plan in place,

Consider a realistic retirement income target and make sure the plan is flexible, our careers and objectives can change numerous times over a lifetime. Make sure as well as flexible, the plan is cost effective, you need to generate a return on the capital invested and not have the returns swallowed by excessive fees. Keep the investment portfolio nimble, diversified and most importantly liquid, daily traded with the ability to move to cash sharpish if needed. Most importantly start.

Business Class Asia is proud to help individuals across Southeast Asia plan for retirement and ensure that they live comfortably. Our office is located in Bangkok, Thailand. Visit our page to find ways in which we can grow your wealth and make and appointment.

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