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Financial considerations for expats

Are your SA portfolios taken care of?

The journey of a thousand miles begins with one single step….

Over the past few years, many South Africans have had the opportunity to work abroad, for example in locations such as Dubai, Mauritius, Australia or London, to name just a few. With many of my clients currently working abroad, I realised that there is a need to ensure that their portfolios that are left behind in South Africa, are taken care of. I believe many of the South Africans working abroad will one day want to return, and if not, knowing what the options are, is imperative.

There have recently been tax changes, and this often leads to uncertainty of what the long-term plan should look like.

I believe there are a few important aspects that expats need to consider:

  1. What is your long-term plan? If you plan to come back to South Africa in two, five or even 10 years, your South African portfolio still very much forms part of your long-term plan.
  2. If you plan to return one day, are you currently managing the investments you might have left here? Retirement annuities, preservation funds, or deferred pension or provident funds that may still remain with your previous employer: it’s imperative to review these investments often. Letting these portfolios stagnate, will count against you in the longer term, especially where you don’t have an advisor appointed to oversee the investment on your behalf. In reality, two years sometimes become five, and five years become 10 – leaving your portfolio unmanaged could cost you a lot.
  3. Are you currently making the most tax-efficient decisions, based on your earnings and current location? Have you received investment and tax advice on your portfolio based on your current, unique situation?
  4. Are you optimising the offshore benefits by building a portfolio offshore, with the benefit of the currency you are earning now?
  5. Where are you planning to retire?
  6. If you do not plan on returning to SA, have you done your homework on the option of emigration, as well as considering moving your local investments offshore? Cost and fund comparisons can be done to analyse your situation – taking possible tax implications into account – but also taking the new offshore opportunities into account.
  7. Have you received advice on the fiduciary aspects of your portfolio? Do you require an offshore trust or will – or is your South African estate plan providing for your offshore assets?
  8. Do you still have risk cover in place in SA (life cover, severe illness cover, disability and income protection), and if so, do you know if this cover will pay out in the event of something happening to you while you are residing outside of SA?

Working offshore can definitely bring incredible opportunities and can be a life-changing experience.

Even if you are currently residing offshore, I would advise making your local portfolio, and your longer-term plan a priority to ensure you are making optimal decisions.

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