Chapter 1: What is the main topic discussed in this episode?
The Clare Byrne Show on Newstalk. With Aviva Insurance.
So if you're living abroad and you've managed to save money, how hard is it to bring it home? I'm joined now by Leah McMahon, who's a senior financial planner with Castle Capital. Leah, you're very welcome. And you know, the first thing we think about here are people who are coming home now from the UAE, from places like Dubai, who have managed to save money.
Have you come across cases like this in the recent last little while?
Absolutely. I suppose over the last number of years, I've kind of, there's probably been a drip feed.
Chapter 2: How challenging is it to bring money home after saving abroad?
I've definitely seen, I suppose, a flurry of more people coming home this year, especially. And like that, you know, they've gone over kind of in a short term window, maybe kind of, they went over for two years, they stayed for five, but you know, the plan wasn't to stay long term.
while they're over there, you know, I suppose, you know, if you're working in the likes of, you know, Dubai or Abu Dhabi, you know, you're not paying tax on your income. You're trying to save as much as possible. And when it comes to, I suppose, saving, there are investment accounts over there that, like that, are available.
Similar to here in the sense of you go for financial advice and like that, people being, I suppose, thinking that they're being clever with putting aside money, investing it because they know it's a longer term rather than kind of leaving it on deposit and signing up to these type of saving schemes.
Mm-hmm. Is that a sensible thing to do in the first instance to sign up to an investment scheme over there? Would you not be better sending the money home to an Irish investment vehicle?
Well, I suppose it kind of depends on your timeline because when you look at, I suppose, the structure of the savings product or the investment product, I suppose, is what it would be. If you're planning, you know, some people have a view that they will go over and they'll stay for five or ten years and some people will settle there as well. So it kind of depends on your personal circumstances.
In, I suppose, when you're looking at kind of
saving into it or investing into it and then in cashing it because you're in a tax free country you know you're not subject to exit tax which you would be here if it's a kind of a capital gains tax product then as well you know that doesn't exist over there so there's a benefit to keeping it over there there can be a benefit in terms of the tax free amount but the problem is if you come back then and you want to get your money it can be a little bit tricky yeah
OK, so what sort of problems are people running into?
So it's not particularly that you lose ownership. It's not it's not a kind of I'm not scaremongering like that, that, you know, once you've left the country, you don't have the policy anymore. It's just the product literature and the Ts and Cs of the policy is very, very important. And I think from my personal experience in work.
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Chapter 3: What investment options are available for expatriates?
So it really is a lot of investment-based. But when your plan is to come home, unlike that, a lot of people are, you know, leaving to work, earn more money to come home and buy.
Of course, that's the whole point. So what is the best way to do it if you're planning to go overseas to work for five or ten years and come back then with your money? How do you sensibly do it?
I would be saying using, I suppose, we have the likes of Raisin now with, say, kind of, I suppose it's a financial platform that gives you access to other banks. So you have to, I suppose, first of all, you're looking at, OK, right, how long am I realistically staying here? You know, there can be certain products available as well that don't have such harsh exit penalties on it as well.
And it's about asking the question, you know, if I start paying this, you know, what exactly, how do I bring this home? Because the other side then as well is, yes, it's tax free over there if you encash it, you know, so you're outside of kind of exit penalties or exit penalties. But when you come home, when you remit the money into Ireland, there's exit tax due on that.
You have to pay a tax on the gain because you've remitted it into Ireland. So it's not tax free once you come home.
So you're paying what tax on it when you come home then? Capital gains tax?
Generally it would be exit tax, which at the moment is 38%. So for anyone like that, that's over there or knows someone that is over there, they're better off to encash it before they leave. Because once they come home and remit it into Ireland, like that, they have to declare it to revenue and have to pay exit tax on it.
It's very tricky, isn't it, for people to try and save a few bob?
It is. It is. And it's unfair because it kind of discourages, I suppose, like we've 180 billion on deposit and we're trying to fix that problem. You know, I suppose financial planners were trying to educate on the benefits of investing. And then you have, I suppose, different nuances with different type of products out there.
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