UK expatriates, or British expats, generally have three main options when it comes to investing:
- Investing in their country of residence
- Investing back in the UK
- Using international (offshore) platforms
The right strategy depends heavily on your tax residency, long-term plans, and overall financial goals. While it is impossible to cover every situation in over 180 countries where British expats reside, this guide will offer general, experience-based insights based on patterns I have experienced as a Brit living and working overseas.
This article is a guest post by author and expat financial wealth manager Adam Fayed from www.adamfayed.com, offering the best investment options for UK expats.
How Should UK Expats Approach Investing?
Start by understanding two key things:
- Where are you a tax resident?
- Do you plan to return to the UK?
The answers to these two questions will not only affect what you may invest in but also how your investments will be taxed now and in the future. Some expats prefer simplicity and access, opting for investment platforms in their country of residence. Others retain ties to the UK via pensions or property. A growing number of individuals are opting for offshore or international platforms due to their portability and tax efficiency.
For most expats, the best solution often involves blending multiple strategies, tailored to their location, goals, risk tolerance, and mobility.
1. Investing in Your Country of Residence
Wherever you are living, whether that is Dubai, Spain, Singapore, or South Africa, you will have access to local investment opportunities, including:
- Local stock markets
- Property or Local Real Estate
- Bank deposits
Each type of investment comes with unique advantages and risks.
- Local Stock Markets
If you live in a country with a strong, mature stock market, such as the US, investing locally makes sense, especially for tax purposes. For instance, the US penalises non-US investments, so British expatriates are often better off using domestic platforms. However, in countries with less stable financial markets—such as certain regions in Latin America, Africa, or even China—investing locally involves significantly greater risk. I have met many Brits in China who were drawn in by the "China Growth Story", but they often forgot that GDP growth does not always translate to stock market performance.
Furthermore, investing locally often ties you to a local provider. If you move, you may lose access or need to sell your property. For individuals who move frequently, the lack of portability can be a significant downside.
Tip: Constantly look for investment platforms that allow international transactions or enable you to maintain your accounts after relocating abroad.
- Local Real Estate
Buying property in your local area can be beneficial if you plan to stay long-term, particularly if it will be your primary residence. However, taking a purely investment-orientated approach complicates the process. The risks include:
- Illiquidity (hard to sell quickly)
- Legal/language barriers
- Regulatory differences
- Political or currency instability
In many emerging markets, prices have increased dramatically over the past decade or so. In the past, you would get discounts for taking on more risk. Today, some overseas properties are as expensive as those in London, yet they lack the same legal protections.
- Local Bank Accounts
Every expat needs a local bank account for daily life. However, using it for investing is a different story. In most countries, the interest rates on deposits are lower than the inflation rate, meaning you're losing value over time. Even in countries with high interest rates, inflation and currency volatility often cancel any gains.
In countries like China and Vietnam, where money movement is restricted, many expatriates prefer to receive a portion of their income in more flexible jurisdictions, such as Hong Kong or Singapore. However, it is important to remember that bank accounts do not qualify as investments.
2. Investing Back in the UK
Many British expats keep ties to the UK through:
- Stock market investments
- Existing pensions
- Property ownership
- Bank accounts
While this can make sense for some, particularly those who plan to return, there are trade-offs.
- UK Stocks & ISAs
While you can still invest in UK stocks, your tax treatment changes when you become a non-resident:
- ISAs might become taxable in your new country. New contributions are not allowed.
- UK platforms may restrict access or close accounts.
- HMRC may still consider you a tax resident if you maintain strong UK ties.
- Increased anti-money laundering scrutiny may delay money or fund transfers.
Some of these issues may be less severe for short-term expats. However, for long-term expats, investing in the UK is rarely the most efficient option.
- UK Property
Despite recent tax changes, some expatriates continue to invest in UK real estate. However, profitability has become harder:
- Higher stamp duties for non-residents
- No mortgage interest tax relief
- Stricter capital gains rules
- Tighter mortgage lending requirements
Still, in many regions outside London, UK property is relatively affordable, especially compared to overheated global markets. UK property prices (excluding London) remain below their 2007–08 peaks in many areas.
Therefore, if you can secure a favourable deal and have a long-term investment strategy, purchasing UK property remains viable, albeit more challenging than previously.
- UK Bank Accounts
It's usually a good idea to keep a UK bank account open for basic needs, such as paying UK bills or maintaining a UK address. But sending significant investment sums back home isn't typically wise. Please use them for convenience, not returns.
3. Offshore or Third-Country Investments (Often the Best Choice)
Many experienced expats invest through platforms based in neutral or low-tax jurisdictions, such as:
- Isle of Man
- Luxembourg
- Bermuda
- Singapore (for Asian expats)
Why Offshore Makes Sense:
- Portability: Accounts stay open when you move countries
- Tax efficiency: Many jurisdictions have 0% capital gains tax
- Expat-focused: Designed for cross-border investors
- Currency flexibility: Multi-currency accounts and global fund access
- Ease of administration: You can usually update details online with minimal paperwork
This route is ideal for globally mobile expats, especially those who move every few years.
Example: If you invest for 25+ years, avoiding capital gains tax can save you hundreds of thousands in fees and taxes.
Offshore Real Estate: A Global Opportunity (and Risk)
Buying real estate in a third country offers flexibility and potential access to residency-by-investment schemes. However, it also entails navigating complex legal frameworks, taxes, and unfamiliar markets. It is rarely as "hands-off" as it seems. If you're seriously considering this route, do your research or work with our specialist.
Offshore Bank Accounts
While not investments, offshore bank accounts are a vital part of an expat's financial plan. They offer:
- Multi-currency flexibility
- Easy transfers
- Global account access
- Less risk of frozen funds during relocations
They are instrumental if your current country of residence has currency controls or banking instability.
Do UK Expats Pay Taxes on Investments?
If you are a non-resident for UK tax purposes, you generally:
- Don't pay UK tax on foreign capital gains or income
- Do pay UK tax on UK-sourced income (e.g., rental income, dividends)
- Cannot contribute to ISAs, and gains may be taxed in your current country.
- You may need to pay local tax on offshore investments, depending on your residency
Many countries have double taxation agreements with the UK. File correctly to benefit.
Top Tips for Investing as a UK Expat
- Know your tax status: It determines everything from ISA eligibility to where you owe taxes.
- Utilise expat-specialist platforms: Select providers that understand global compliance and facilitate relocation.
- Diversify globally: Spread risk across markets, currencies, and asset types.
- Avoid cash-heavy strategies: Inflation erodes the value of your savings. In the long term, investing is almost always a better option.
- Think long-term: Avoid trying to time the market. Even top investors like Kevin O'Leary admit it's nearly impossible.
- Review after each move: Every relocation brings new tax rules and financial implications.
Final Thoughts: What's the Best Option?
For most British expats, particularly those moving every few years, offshore investing is the most efficient and flexible option. It allows you to maintain control, minimise the tax burden, and build wealth globally.
The main exceptions?
- If you are based in the US (local investing usually makes more sense there)
- If you're on a short-term assignment and still technically a UK tax resident
Otherwise, offshore platforms allow you to plan for the long term, regardless of where life takes you next.
If you are a British or UK expatriate, do not be burdened by financial indecision; please contact Adam Fayed at +44 7393 450 837 via WhatsApp or hello@adamfayed.com via email. Alternatively, you can contact us directly via email at info@innovestglobalwealth.com or via WhatsApp at +256 773 488 765.
Note: This article is for informational purposes only and should not be considered financial, legal, or tax advice. Some facts may have changed since the publication date.
