Articles by Mike Abbott

We’ve recently had the pleasure of making a trip to Dubai to meet the expat community there to discuss the recent tax changes in South Africa and how they affect South African expats. It’s been great to meet some fellow South Africans in this hub of all expat hubs. These are the key insights I’ve gained from my time there this week.

Providing prognostications on the future seems to be a habit of people in finance, investments and economics. However, much like the attempts to predict the outcome of major sporting events, this type of crystal ball gazing has a dismal track record. What strikes me as strange is the enduring fascination we all have with predictions, despite the fact that we all know they're no more likely to be correct than our own random throws of a die.

South Africa finds itself in the grip of a full-blown political crisis. In times like this, cool heads prevail and well-considered plan Bs are put into action.

Britons living outside of the UK will now face a hefty tax when transferring their pensions outside of the UK as HM Revenue & Customs (HMRC) have made important changes to the tax laws around qualifying recognised overseas pension schemes (QROPS). The Chancellor of the Exchequer, Philip Hammond, announced that transfers to certain QROPS will be taxed at 25% in his Budget Speech on 8 March 2017. This change will affect thousands of British expats living outside of the UK.

The UK has gone to the polls and the decision has been made. The outcome is, however, the one that held the most economic uncertainty. Most investors knew this was a possible outcome, but the inevitable negative financial effects of a Brexit vote are becoming evident immediately.

If you are a non-UK resident, you will need to inform HM Revenue and Customs (HMRC) within 30 days of selling your UK residential property as Capital Gains Tax (CGT) may be due from 6 April 2015.

When it comes to financial markets, the only certainties are both risk and uncertainty itself.

In 2013 a strange thing happened at the Nobel Prize awards for Economics. This Nobel Prize has particular relevance for investors. The prize was shared by three academics, but that alone is not the oddity to which I refer. If you take a closer look, you will see that prize winners Eugene Fama and Robert Shiller have diametrically opposing views on how markets work. Yet they shared a Nobel Prize “for their empirical analysis of asset prices”.

Is it better to invest locally or offshore? Some South African investors believe that lower investment returns earned by investing offshore are a good reason to invest locally. However, if they analyse their South African investments after adjusting for inflation, tax and volatility, they might be very disappointed.

The volatility in international markets over the last two weeks has had investors scrambling to mitigate losses. Risk appetite is plummeting and together with the collapse of the commodity market, emerging markets have been taking a beating. However, we should all remember to not throw the baby out with the bathwater.