Advice on multi-country complex situation
Hi all, long time lurker of several of these money-related subs. Apologies in advance for a very long post.
My wife and I have quite a complex/convoluted situation and I have been devoting some time over the past few months to try and develop an understanding of the key areas of action / decisions to solve for when it comes to our financial planning.
PERSONAL SITUATION
We are M37 and F35, originally from Spain and currently living in the UK. No kids yet but planning to have ideally 2-3. Some time spent working in the US previously, and with plans to relocate back to Spain in ~5 years time (leveraging Beckham's law) and retire early in ~10-15 years time.
My wife currently still enjoying Overseas Workday Relief (thus why you will see some savings in the Channel Islands, portion of income that needs to be kept offshore). She is currently taxed on ~30% of her income based on the % of time she earns in the UK.
INCOME
We are earning £250K (160K base + 90k bonus) and £180K (130k + 50k bonus) respectively in high stress, high risk jobs. Quite a significant growth potential (+15-20% annual increase in compensation) if we were to stay and get promoted (not guaranteed at all), so would assume flat earnings assuming that we could keep our salaries if leaving.
NET WORTH
Our combined net worth is around £870K, split as follows:
*Spain: 250K
○ 130K index funds with MyInvestor (digital bank platform, low cost)
○ 20K in Current Accounts (Revolut, EVO, Openbank)
*UK: 240K
○ 100K in Current account (Starling)
○ 70K in Combined pensions (from employer contribution, contributing 16k per year for each of us, no contribution from our side yet in the past 4 years we have been in the UK)
○ 70K pending HMRC refund
*Channel Islands: 270K
○ 270K in Fixed deposits / Current account (HSBC Expat)
*US: 190K
○ 100K in Index funds (with Fidelity)
○ 80K in Pension (need to understand if this is in 401K/other instrument, not very familiar with the US tax/retirement system)
○ 10K in Current accounts
*Not sure about geography: 20K
○ 20K crypto investments with Binance (BTC, ETH)
KEY ACTIONS WE ARE PLANNING TO TAKE THIS TAX YEAR (Before April)
*For me:
○ Salary sacrifice the remaining 2 months 100% into pension (to also get the NI saving hopefully): 26.6K
○ Contribute as much as I can to pension while getting additional or higher rate relief:
§ From 23/24 allowance: consumed 16k (employer) + 26.6K (salary sacrifice to be planned) = 42.6K. Left: 17.4K
§ From 20/21 allowance: consumed 12k (employer). Left: 28K
§ From 21/22 allowance: consumed 15K (employer). Left: 25K
§ From 22/23 allowance: consumed 16K (employer). Left 24K
§ Total maximum contribution: 17.4K + 28K + 25K + 24K = 94.4K total pension contribution on top of salary sacrifice, taking my taxable income to 250K - 26.6K - 94.4K = 129K
○ Open a LISA S&S, invest 4K, get 1K bonus: invest in index fund (tried to use Dodl but not possible given I'm not a UK citizen)
○ Open an ISA S&S, invest 16K in index fund (with Trading 212)
*For my wife:
○ Salary sacrifice 80% of the remaining 2 months salary into pension (to also get the NI saving hopefully): 16K
○ This should take her taxable income to 180 \* 30% - 16K = 38K (just above the basic rate tax bracket) - assuming this is the right way to calculate it with OWR
○ Open a LISA S&S, invest 4K, get 1K bonus: invest in index fund (tried to use Dodl but not possible given I'm not a UK citizen)
○ Open an ISA S&S, invest 16K in index fund (with Trading 212)
○ Invest her offshore money in an available platform (be it in Channel Islands or somewhere else in Europe)
KEY ACTIONS WE ARE PLANNING TO TAKE IN THE MEDIUM TERM
* For both:
○ Before leaving the UK:
§ Transfer our investments from MyInvestor (in Spain) to another EU country (e.g. Netherlands?) to avoid taxation on capital gains thanks to Beckham Law (in Spain) or Non-domiciled regime (in UK)
§ Sell our ISAs to realise the accumulated capital gains tax free
○ Not in a specific timeframe:
§ We are also considering investing in real estate (most likely in Spain)
SOME QUESTIONS WE HAVE
- Is there anything you would change/could be optimised based on the information above?
- Is there any other information that would be helpful to clarify the situation and options?
- Can my wife contribute to her pension while on OWR, with her contributions being deducted for tax purposes from the UK portion of her income? If so, would it make sense to do it on any amount over 37.7k (to avoid the higher Income Tax rate)
- What are some good, low cost platforms to invest in outside the UK (be it in Channel Islands or somewhere else, preferably Europe)?
- Should I consider using VCT or similar tax-exempt investment vehicles? Any recommendation on something that can yield solid returns (even with flat returns I assume I would be making a 45% return post-tax given tax avoidance?)
- What is a recommendation for a Stock & Shares LISA low cost and open to non-UK citizens)
- How does the tax relief on Pension work for any contribution I make on top of salary sacrifice? Will I get automatically the Basic rate relief, then claim back any additional or higher rate taxes in self assessment?
- What is a good way to find an advisor that can help with our situation (quite complex at least from my point of view) and is knowledgeable across jurisdictions? (and not terribly expensive)