The question I currently find myself asked most frequently is: Should I sell US equities? It is a very good question, but in isolation its answer is insufficient to lead to an investment decision. Many investors agree that US equities are expensive and because of this believe the allocation should be reduced versus the strategic target. From a valuation point of view this is a good idea, as by most measures, such as the Price to Book ratio (P/B) or the Shiller Price to Earnings ratio (also called CAPE = cyclically adjusted P/E), US equities versus their own history have reached lofty valuation levels. At the same time, many investors overlook critical questions such as:

1. Should information beyond US equity valuations be considered?

2. How can tactical asset allocation insights like US equity valuations best be utilised in a portfolio context?

Before we address each of these questions, let’s revisit the basic facts on asset allocation. Asset allocation is broadly understood as the exercise of allocating between different asset classes, such as bonds versus equities, and different market segments, such as UK bonds versus Eurobonds. Holding any asset allocation for a long period is called Strategic Asset Allocation (SAA). SAA has a huge impact on the return outcome as well as the return variability, also known as volatility. A famous study by Brinson, Hood and Beebower(1) examines determinants of portfolio performance and its volatility. The key point to take away is that SAA on average determines over 90% of the return volatility. This is demonstrated in the following graph.

Corresponding results have since been confirmed by similar studies as Brinson et al(2). A study by Ibbotson and Kaplan into the impact of SAA on the return level(3), shows that empirically SAA was on average responsible for 100% of the return level outcome.

Nowadays more and more investors focus their investment efforts on SAA and implement it with cheap, passive index tracking products. That is a very good starting point but should investors stop there?

Both market timing and security selection represent active investment management. Market timing represents short term, Tactical Asset Allocation (TAA) decisions, like temporarily underweighting US equities versus the strategic US equity allocation. Security selection keeps the strategic US equity allocation but varies the weights of individual US stocks within the allocation to US equities.

TAA is traditionally implemented by tilting portfolios away from strategic weights during any year. This creates relative risk (tracking error) but also potential outperformance (excess return) versus the SAA portfolio. The relationship of both variables, excess return over tracking error, is measured by the information ratio, and the aim of TAA is for the information ratio to be positive. A 10% underweight creates a much higher tracking error than a 2% underweight but if the same good idea is applied (the same information ratio), there is potential for higher outperformance. Therefore, investors are required to have a very clear idea about how much tracking error they can withstand when markets don’t behave as predicted and that TAA generates significant underperformance versus a pure SAA portfolio.

Sizing an under- or overweight portfolio can have further implications on the absolute level of risk. For example, if an investor doesn’t like bonds versus equities because of low yield, should they reduce bonds from 50% strategically to 25% tactically? Alternatively, should the investor go all the way and not allocate to bonds at all; in other words switch to 100% equity? The latter will cause a far less diversified and much riskier portfolio. The following graph shows a 50/50 combination of two hypothetical assets, which both have a Sharpe ratio of 0.5 and a volatility of 10%(4): It illustrates a Sharpe ratio deterioration for tilting or switching, which is also larger for portfolios with more diversified assets or strategies (Fig. 2 lower correlations, left).

Therefore, a portfolio including TAA faces an uphill battle just to match the Sharpe Ratio investors would expect from it if no TAA would be attempted.

Let’s now look at using valuations in TAA decision making. In my opinion it is an absolute necessity to consider valuations. However, looking only at valuations can be equally as disastrous. For instance, some of you may remember the ‘TMT bubble’ at the turn of the century.

The below graph displays the Shiller P/E for US equities for the period of January 1881 to November 20175. In December 1995 US equities reached a Shiller P/E level over 25, well above the average level of about 15, which any investor could have calculated from all the data history between 1881 and 1995. 25 was also a level achieved only twice before in a period longer than 100 years. (Fig. 3, below)

Unsurprisingly in 1995 some investors believed that US equities were expensive and therefore started reducing their allocations to US equities. Unfortunately, in the following four years these investors had to experience significant performance headwind as valuation levels climbed even further!

After reading all of this, how excited are you about TAA? Most likely not a great deal. Nonetheless, I suggest to pursue it but in a very different, modern way that until now has predominantly been utilised by sophisticated, institutional investors. It involves the following: (Fig. 4).

Modern TAA combines many characteristics that all serve the main objective: to create positive risk-adjusted returns in most market environments. Firstly, modern TAA strategies are much more diversified. Gone are the days where a manager just shifts money between a few major equity markets or simply allocates between US equities, US bonds and US cash. Nowadays, TAA strategies explore global equity markets in much greater detail as they trade on country or regional equity indices from around the world, including liquid emerging markets. In bonds, futures on different parts of a yield curve are traded. Some strategies even explore credit spreads. Modern TAA strategies additionally allocate between different commodities, from energy contracts to agricultural, precious and industrial metals. They also pursue investment decisions between currency pairs, sometimes including currencies from emerging market countries. Some TAA strategies even trade volatility. In summary, modern TAA strategies have many options in which to invest.

Fig. 4:

All these investments are pursued using derivatives. What sounds scary to an investor who has little or no experience with derivatives, is music to the ears of sophisticated, institutional investors around the world. Most of those derivatives have been used by investors for decades and many of them are standardised instruments traded on exchanges. They bring substantial cost advantages, as liquidity in most derivatives is very deep, sometimes even deeper than the physical market they are linked to. The crucial advantage here is that trading costs are relatively low, which in turn allows a manager to trade more frequently. Derivative usage also allows TAA investors to ‘short’ a market. This means that if the investment thesis is that the price will fall, establishing a short position makes it possible to turn such an idea into a profitable strategy. With shorting you can therefore significantly increase the number of ideas a manager can implement.

Now let’s talk about leverage. While leverage can often be a polarising topic, we believe there is a strong case for allowing it to achieve superior risk management. If an investor wants to have a noticeable impact on overall portfolio returns, modern TAA strategies would need very significant portfolio allocations, if those strategies would only target a small amount of risk. However, if modern TAA strategies can target a high amount of risk, investors allocating to them achieve a much greater degree of capital efficiency, as they can make much smaller allocations and nonetheless achieve the desired level of risk-adjusted return impact. Without leverage, that desired high level of risk could only be achieved by taking on much more equity risk than let’s say interest rate risk. With leverage, however, this objective can also be achieved but with exposing the portfolio to a high concentration of equity risk. Instead, modern TAA strategies can balance out the different risks they decide to hold in their portfolios.

Lastly, modern TAA strategies don’t focus all their attention on valuations any longer. Instead, they are multi-factor strategies that also seek to benefit from momentum, quality and/or low risk as well as carry concepts.

Below an explanation for each idea:

• Value – The tendency for relatively cheap assets to outperform relatively expensive ones

• Momentum – The tendency for an asset’s recent relative performance to continue in the future

• Carry – The tendency for higher-yielding assets to provide higher returns than lower- yield assets

• Quality, Low Volatility – The tendency for lower risk and higher-quality assets to generate higher risk-adjusted returns than high risk and low quality assets.

Going into more detail on each of these may be a topic for future articles. At this stage, it is critical to understand that a multi-factor approach is introducing an additional layer of diversification beyond the typical asset class dimension. This makes the return stream from modern TAA strategies even more robust.

Modern TAA strategies are a real improvement versus TAA strategies most people so far have had experience with. Still, no investment strategy can claim to be the ‘Holy Grail’ of investing as each strategy will undoubtedly have patches of negative performance and what is ‘state of the art’ knowledge today might not be tomorrow - modern TAA strategies are no exception. At this stage, however, I am confident that some of these institutional style, sophisticated strategies stand a decent chance to improve the odds of long-term positive returns of investors.

Sources

1 Brinson, G., Hood, R., and Beebower, G., (1986) “Determi- nants of Portfolio Performance”, Financial Analysts Journal, vol. 42, No. 4, pp 39-44.

2 Brinson, G., Singer, B., and Beebower G., (1991) “Determi- nants of Portfolio Performance II: An Update”, Financial Analyst Journal, vol. 47, No. 3, pp 40-48

3 Ibbotson, R., Kaplan, P., (2000) “Does Asset Allocation Policy Explain 40, 90, or 100 Percent of Performance?”, Financial Analysts Journal, Vol. 56, No. 1:26-33

4 AQR,“AlternativeThinking”, FourthQuarter 2014 5 Online Data Robert Shiller: www.econ.yale.edu/~shiller/data.htm

Risk Warnings And Important Information

All expressions of opinion are subject to change without notice and are not intended to be a guarantee of future events. This article is for information purposes only and does not constitute a solicitation to buy or sell securities nor does it purport to be a complete description of our investment policy, markets or any securities referred to in the material. Opinions expressed herein are not intended to be a forecast of future events or a guarantee of future results or investment advice and are subject to change without notice or based on market and other conditions. Any reference to model portfolios, which is used for internal purposes, is purely illustrative. The value of investments and the income from them may fluctuate and can fall as well as rise. Past performance is not a guarantee of future results. You may not recover what you invest.

Although information in this document has been obtained from sources believed to be reliable, MASECO LLP does not guarantee its accuracy or completeness and accepts no liability for any direct or consequential losses arising from its use. Throughout this publication where charts indicate that a third party (parties) is the source, please note that the source references the raw data received from such parties.

MASECO LLP do not provide tax or legal advice and levels and bases of taxation can change.

Investments or investment services referred to may not be suitable for all recipients.

In the UK, certain services are available through MASECO LLP (trading as MASECO Private Wealth and MASECO Institutional) which is registered in England and Wales, number OC337650, with registered offices at Burleigh House, 357 Strand, London, WC2R 0HS, telephone +44 (0)20 7043 0455, email enquiries@masecopw.com.

MASECO LLP is authorised and regulated by the Financial Conduct Authority for the conduct of investment business in the UK. The Financial Conduct Authority does not regulate tax advice or offshore investments. Messages and telephone calls to and from MASECO Private Wealth may be monitored to ensure compliance with internal policies and to protect our business.

MASECO LLP is a FINRA/SEC Registered Investment Advisor in the United States of America.

Helge Kostka, Chief Investment Officer Prior to joining MASECO Private Wealth, Helge helped to establish and grow the presence of Research Affiliates in Europe over the last 4 years. He began his career at Deutsche Bank in 1995, serving in a number of investment roles, including as head of qualitative alpha selection and head of portfolio engineering. Helge started at Aviva Investors in 2009, initially heading up the product specialist team in the areas of investment solutions, equity, and multi-asset and later establishing the respective product management function.

Helge holds a bachelor’s degree in finance and accounting from Hogeschool, Utrecht, the Netherlands, and a Diplom Betriebswirt from Fachhochschule für Oekonomie und Management in Essen, Germany. Helge also graduated with an Executive MSc in risk management and investment management from EDHEC-Risk Institute.

Helge is considered an expert in Smart Beta and quantitative investing, and has spoken at various conferences around the globe. Having worked with HNW individuals as well as large institutions in different jurisdictions, his rich experience allows him to bring institutional investment practises into the private client world.

In 2016 the Financial Analysts Journal (FAJ) published Helge’s co-authored research around factor and smart beta exposures. In March 2017 CFA Institute named Helge and two co-authors as the winners of the 2016 Graham and Dodd Award of Excellence via CFA Institute; it is the first time that a Chief Investment Officer at a UK Private Wealth Management firm has received such honour.

Contact: helge.kostka@masecopw.com

How it Feels When You’re an American by Karen Storey

My 19 year old dual national daughter doesn’t get it. She was born and raised in Britain but has always been an American citizen through me. Indeed, this was the only passport she held for the first 18 years of her life. Last year, she finally applied for, and received her British passport. She can’t understand why I still haven’t gone for mine. I can’t fully understand it either. It seems I have some strange emotional block in taking this final step. I came over to the UK when I was 20 years old. At the time I hadn’t intended to stay, but life took over and 36 years later, I’m still here! ”You have lived here longer than you have in America.” She says to me “Why don’t you just do it?”. As I search for an explanation I find myself fumbling with the answer, that maybe it has to do with spending my childhood pledging my allegiance to the American flag. She finds this odd, as kids in England don’t have an equivalent ritual. I describe how every morning at school my classmates and I, hands on heart, recited this pledge. Yet, nowhere in the Pledge of Allegiance did anyone ever say “I pledge my allegiance to the flag of the United States of America and any other country that I happen to somehow end up living in one day”.

I tell my daughter that for me, it feels disloyal to take another citizenship. “Well then, isn’t it disloyal of you to be living here?” she asks. She has a point. So I say, “Perhaps, in my head, I’m sort of balancing it out by holding on to my sole nationality and passport.” That is the crux of it. My instilled sense of loyalty from my childhood is the impractically sentimental reason why after 36 years, I still hold only an American passport with indefinite leave to remain (ILR) in Britain. I was curious to see if I was alone with this feeling, so have been talking with a few other American expats settled in Britain. 

Cate Linforth is originally from Chicago and has been living in the UK for over 12 years. She came to the UK for University. Now, married to a Brit, she finally decided to apply for British citizenship in April 2017.

She tells me: “I’d been struggling with the decision ever since I got my ILR back in February 2013. Part of me didn’t want to get it because of the amount of money I’d already paid to the Home Office, and I didn’t technically NEED to. However, once I met my now husband and started to realise that I didn’t really have any intention of moving back to the US, I decided that it made sense to think about citizenship, not least because of the recent change in politics in the UK, as well as Brexit. It no longer made sense to be living and working in the UK, but not having any say in political changes happening over here”. Cate goes on to say that she had to fight to stay in the UK because of changes in legislation. She explains “I think that previously I’d thought that under my ILR I was invincible, but the reality is that if I had to move out of the UK for 2 years, for whatever reason, and wanted to return to the UK, I’d be back to starting point.” I had asked her if applying for dual nationality brought up any mixed emotions, and she tells me “I think even now I still struggle with the idea of being a British citizen. I’ve never been particularly patriotic, but something inside of me, valid or not, thinks that if I become a British citizen, it would almost make me less American. I’ve been losing my accent gradually over the last several years, no longer easily tan (hello permanently pasty skin!) and not least I really struggle to identify with the general populous sometimes in the US, but I had a real internal struggle about what it would mean to get my citizenship”.

I completely identify with the thought that Linforth Family somehow obtaining a British passport could make one feel less American. Having lost my own New York accent gradually over the years, sometimes it feels like the only part of me left that’s still American is the blue passport in my drawer.

Cate continues: “I really struggled internally about getting my citizenship. I don’t identify as British, I’ve always felt like a settled American in Britain. Getting my citizenship felt permanent to me. My whole adult life, I’ve been foreign. Whether it’s not quite fitting in to the UK because I sound different, or being seen as foreign by my own friends and family back home because I’ve picked up British phrases and colloquialisms, I’ve not just felt ‘normal’ for a very long time. I was wary about how my citizenship would change that. I don’t think that was helped much by my friends and family in the UK saying ‘Well, you’ll be British now’. I didn’t, and still don’t feel ‘British’. I don’t sound British. I think by resolving it I had to remember that it was a formality for me. It meant that no one could ever make me feel anxious about my immigration status in the UK again, and that perhaps I would feel better about politics and government, knowing that I could start to do my bit to make a difference. And I wouldn’t have to sit in one of those hideous lines at the airport anymore. And let’s be honest, by choosing to live in the UK for the last 12 years, I kind of have pledged allegiance“.

I ask Cate about her citizenship ceremony and she tells me: “My ceremony was in December 2017, and I felt really apprehensive in the lead up to it. My husband unfortunately wasn’t able to come because of an international work trip, so two of my best friends from University decided to be there to support me. I was excited to finally be at the end stage, after so many years and so many thousands of pounds spent on immigration. I never had to worry about how the government’s immigration changes would affect me again. But would it make me feel less American? Would I no longer be able to say with such confidence that I was American? I wasn’t sure if it would taint any of my American-ness if that makes sense. The ceremony itself was actually quite emotional, as one of the Deputy Lieutenants for the West Midlands was an immigrant herself. She showed such empathy for the struggle that everyone in the room had gone through and the opportunity this brought to us. She really validated what a tremendous achievement it was. My girlfriends both made such a special day of it, going out for cocktails and lunch as well“.

Cate reflects on becoming a dual national and tells me: “I’m pleased that I’ve done it. I’m pleased that I can now vote in any future elections, and hold office if I so choose as well. I’m pleased about the doors that open in terms of easier access to commonwealth countries“. Christina Davies, another American expat, now lives in the West Midlands with her husband and four children. She has also been here for 12 years. Her children are already dual nationals. She and her husband are in the process of applying for their British citizenship. Christina tells me: “

We’ve invested a lot in our lives here and they really are here when I think about it. My husband and I started our married life here. My children were born here. We have paid through the roof for visas and ILR for the privilege to be here. And of course, I finally got a Land Rover!”.

She continues, “My husband and I both travelled extensively (domestically and internationally) as children and into our adult lives before coming to the UK., but England has still opened a world for us that we wouldn’t have known existed without living here. It has had a large part in moulding us into the people that we are today. For all of that, I am grateful“.

Christina adds: “Don’t get me wrong. I am proud to be American. I am grateful for my country and I proudly defend it almost daily. I flexi-school my children, and do an American curriculum on the days they are with me because of how important it is to us that they understand the incredible history and amazingness of the country that they are a citizen of, that they hold a passport for, that they explore a few weeks a year, and for a country where their entire extended family lives. I think we live in a state of confusion. When we get on a plane to fly Stateside we say we are ‘going home’, and then when we board a plane to fly to the UK, we also say ‘we are going home.’ But I also think we are extremely blessed, to be able to say that we are home in more than one place, in more than one country, on more than one continent. That is why we are applying for citizenship”.

It’s these final words from Christina that have got me thinking that dual citizenship perhaps does make sense emotionally, not just practically. She tells me, “We will be truly home whichever side of the Atlantic we are on. I will always consider myself to be an American, but with the extra privilege of also being a citizen of the UK. God Bless America and God Save the Queen!”.

The following is designed to provide general immigration and business law information for those independently relocating to or residing in the United Kingdom and does not constitute legal advice. As with all legal issues, seeking tailored advice from qualified counsel is advisable.

UK IMMIGRATION OPTIONS

It goes without saying that if you intend to work in the UK or remain for any extended period of time, you will require a visa. The most straightforward path to obtaining a visa granting such privileges is through support from an employer, a college or university, or a family member. Yet in the absence of such opportunities, other options, although limited, may still be available. Entrepreneurs, individuals with exceptional talent, and those looking to invest substantial amounts in UK markets may be able to relocate to, or extend their stay in the UK, irrespective of sponsorship from a family member or employer.

Tier 1 (Entrepreneur)

If certain requirements are met, this visa may be available to those with access to £200,000 to invest into a UK business who can demonstrate they are able to support themselves while residing in the UK. Individuals with funding through select competitions, the UK government, and certain venture capital firms can qualify for a reduced funding requirement of £50,000.

The Tier 1 Entrepreneur visa can be held for three years and four months and allows holders to bring their spouse or partner and children. The visa can be extended for another two years, three in certain circumstances. After five years of presence in the country on this visa, it may be possible to apply for settlement in the UK, which grants the privilege to remain indefinitely.

Tier 1 (Graduate Entrepreneur)

Similar to the standard visa for entrepreneurs, students in the UK are able to apply for visa privileges through a less costly option. Only £50,000 in funding is required for the business and the visa is available for one year, with a one-year extension period.

This visa on its own does not permit settlement in the UK but does provide a clear path for transition to the standard entrepreneur visa. One of the primary benefits of this option is that it can be pursued with only £50,000 in funding, as opposed to the £200,000 that would otherwise be required. Investments made to the business within the prior 24 months can satisfy the funding requirement, potentially eliminating any need for additional capital when changing visa types.

Given these relaxed funding standards, as you can expect, the application process can be highly competitive. A limited number of visas are issued each year and candidates must obtain a letter of endorsement from UK trade authorities or an institution of higher education in the UK attesting to the applicant’s entrepreneurial capabilities and the merit of their business opportunity.

Tier 1 (Investor)

This visa requires an investment of at least £2,000,000 into the UK rendering it an option only for those with substantial financial means. To be eligible, the investment must be made in UK government bonds or active and trading UK registered companies. The funds are largely prohibited from investment in the real estate industry.

It can be maintained for up to three years and four months and extended for another two years, with settlement available after five. The settlement timeline is reduced to three years with an investment of £5 million and two years with an investment of £10 million.

Tier 1 (Exceptional Talent)

To qualify for this visa, you must have been endorsed as a recognised or emerging leader in the fields of science, medicine, digital technology, or the arts. As with the graduate entrepreneur visa, the application process is highly competitive and only a limited number of visas are granted each year under this category.

Before applying, an endorsement must be sought from the Home Office attesting to your status in your field of practice. If ultimately granted a visa under this category, you will be able to stay in the UK for up to five years and four months and can extend for another five years. As with other categories, settlement is available after five years.

Rigidity of visa guidelines go a long way to ensuring that expats arrive in the United Kingdom with vetted business plans, verified talent, and financial means to handle the transition smoothly. The downside is that the financial thresholds and competitive nature of the application process may place most of these visas out of reach for many expats, forcing reliance on support from employers or family members to obtain UK visa status.

While the battle is uphill, the hard- working expat entrepreneur with a promising business idea and a bit of wind in their sails may very well be able to access UK market opportunities in a manner that ultimately leads to settlement and residency status. If this describes you, deciding how you will structure your business is the next step.

BUSINESS FORMATION IN THE UK

When doing business in the United Kingdom, your activities can be structured in various ways. It will be important for Tier 1 Entrepreneur visa applicants to select a business structure that will balance tax and administrative efficiency against legal protections provided by more formal arrangements.

Of importance, the decision to form a UK business may not require expats to consider how such arrangements will be taxed by their country of nationality. Unfortunately, due to the worldwide tax and information reporting regime in place in the United States, American expats must actively consider cross border tax and reporting obligations that their businesses will encounter.

Notably, recent changes to the US tax system brought about by the Tax Cut and Jobs Act have created a dynamic environment where American business owners operating overseas will want to revisit any ongoing tax planning or compliance strategies. This legislation establishes a new tax on certain foreign income that can have a profoundly negative impact on individual shareholders of certain foreign corporations. Planning opportunities are available to minimise exposure to this new tax, but existing businesses should take action quickly as these rules are applicable to tax year 2018.

While there are numerous other UK business structures designed to achieve specific funding or operational goals, the information below covers the most common methods for operating UK business activities.

Sole Trader

Without question, operating as a sole trader provides the easiest option for setting up and managing the ongoing administration of your UK business affairs. Sole traders simply register their independent business activity with HMRC and are ready to begin business. Note, however, that many businesses selling products or engaging in other regulated activities will still maintain the responsibility to register for Value Added Tax (VAT) and any other relevant licenses that may be applicable to their business.

The notable drawback of operating as a sole trader is that no limited liability protection is provided. This means that you would remain personally responsible for debts and other liabilities of the business. Given this lack of protection, operating as a sole trader would be a risky option for most business owners.

Partnerships

A partnership in the UK is formed when a group of at least two individuals collectively engage in an activity with the goal of producing a profit. A nominated partner is tasked with registering the business with HMRC and each partner will need to register for self-assessment on their partnership income. Income tax is calculated at each partner’s individual tax rate based on their respective share of partnership income, as if they were sole traders.

A partnership agreement is not required but is recommended in all situations, irrespective of personal or family dynamics that may characterise the business relationship. As is the case with sole trader status, no limited liability protection is offered to owners of these traditional partnerships. Moreover, as partners could potentially be responsible for the business debt attributable to other partners, the risk of operating without limited liability here is even greater than it is for sole traders.

Those wishing to maintain certain tax and operating features of a partnership while ensuring limited liability from debts of the business may want to consider organising a Limited Liability Partnership (LLP). LLPs are required to register with the Companies House, must submit annual financial reports, and are regulated in a similar way to private limited companies described below.

Private Company Limited By Shares (LTD)

Private limited companies are widely popular among UK business owners and are available for both individual owners and group ownership structures. No minimum capital requirement is applicable and limited liability is offered to shareholders, protecting their personal assets from debts of the business. This structure may be desirable for expats who do not want the risk of operating without limited liability, but accounting for tax attributes will need to be a crucial part of the decision.

Establishing a private limited company is relatively straightforward and requires that Articles of Association, along with several other documents, be filed upon formation. The business is not obligated to hold meetings, but financial statements must be submitted annually within nine months of the company’s financial year-end. Smaller companies may qualify for simplified reporting and all private limited companies are subject to annual corporate tax filing responsibilities.

Private limited companies are required to have at least one company director who must be a natural person, but it can be the sole shareholder of the company. Shares in a private limited company cannot be offered for sale to the general public and a transfer of shares can only occur through a private agreement of the shareholder.

Public Limited Company (PLC)

Businesses that want the ability to offer shares of the company for sale to the public are required to organise a public limited company. This type of entity is characterised by significant organisation and administrative costs as well as strict formalities around meetings, voting, and other activities of the business enterprise.

Ultimately, while private limited companies will be the most common operating structure for expat entrepreneurs and business owners, the details of every business arrangement must be closely considered. Tax and immigration laws as well as the ongoing costs of compliance and administration should be factored into the broader decision-making surrounding the appropriate structure for the business.

If you are an American entrepreneur or investor contemplating a new business or a move to the United Kingdom, our firm can assist with developing an effective strategy and ensuring you maintain compliance on both sides of the pond.

Expat Legal Services Group offers unique legal services for American expatriates and foreign nationals with financial interests in the United States. Our firm serves the expat community in the areas of international tax, immigration law, and cross border business and estate planning using a suite of modern technology solutions. Contact Expat Legal Services Group today at info@expatlegal.com or visit the website at www.expatlegal.com. The choice of an attorney is an important decision and should not be based solely on advertising.

With the tax deadlines looming closer and closer, we thought we would introduce you to some of the companies we have worked with over the years, who will be able to help you with any tax issues you are currently experiencing or need to address:

BDO LLP

BDO are ideally placed to help clients navigate and manage the often-complex tax compliance interactions between US and the UK tax systems, including:

• US and UK income tax returns for US citizens in the UK or expats living in US

• Non-resident US income tax returns (form 1040NR) for non-US persons

• Foreign bank and foreign asset reporting for US persons

• Delinquent US tax filers and assisting under the streamlined filing procedure

We are also able to assist non-US persons requiring to file US returns that may be ineligible for a US social security number by helping them acquire (or renew) an ITIN (Individual Taxpayer’s Identification Number) via their London based Certified Acceptance Agent.

Our US tax advisory team, based in London and the US, are able to advise clients with US connections, wherever they are based and on all US tax related matters including US estate tax planning and filing obligations associated with non-US companies, partnerships and trusts. Please contact any of Mark Walters, Andrew Harrison or Scott Wickham who’d be delighted to help.

For more information click here 

MARK WALTERS email +44 (0)20 7893 3497 - ANDREW HARRISON email +44 (0)20 7893 2756 - SCOTT WICKHAM here +44 (0)20 7893 2766

Expat Tax Professionals LLC

Expat Tax Professionals LLC

411 Hackensack Ave, 2nd Floor Hackensack, NJ 07601

www.expattaxprofessionals.com

US: +1 718 887-9933

UK: +44 (0)20 3642 0423

When you live and work overseas, the last thing you need to worry about is the IRS. US tax law is complex, always changing, and probably the furthest thing from your mind.

Expat Tax Professionals was founded by international tax experts with extensive American tax code experience.

We don’t outsource anything to contractors - we only have our own seasoned, licensed CPAs and tax attorneys preparing and reviewing every tax return.

With Expat Tax Professionals, you have the convenience of being able to handle your taxes completely online or working directly with a seasoned CPA for more complex tax needs.

Think of our service as the best of all worlds — CPA Expertise. Online Convenience.

US Tax & Financial Services

US Tax & Financial Services

Address: 3 Harbour Exchange Square, London, E14 9GE

Contact: Joni Trulock, Group Marketing Manager

Telephone: +44 20 7357 8220

Email: j.trulock@ustaxfs.com

Website: ustaxfs.com

The US Tax & Financial Services specialist team of cross border advisors provides tax advice, guidance, planning and compliance services for individuals, partnerships, corporations, trusts and estates for anyone subjected to the US tax system, wherever they may be in the world. Established more than 30 years ago, US Tax & Financial has offices in London, Zurich and Geneva with clients in more than 32 countries.  We also have dual handlers to manage individual tax obligations for US/UK taxpayers.  

The international aspects of the US tax system are extremely complex; not only are the statutes and regulations alien to US-based firms, but the additional informational returns relating to almost all aspects of an expat’s international lifestyle are complicated and carry stiff penalties if not filed correctly. Many of us here at US Tax & Financial are dual nationals and our offices are outside the US.  We live and work here with these international issues daily.  

Esquire Group

Esquire Group

Email: info@esquiregroup.com

Web: www.esquiregroup.com

International taxation. Admittedly, not the sexiest of topics for most people. But we at Esquire Group aren’t most people. Not only is the team at Esquire Group dedicated to international taxation, with specialised knowledge drawn from years of experience, but we also know first-hand what running a successful global company entails. With offices in multiple countries, we recognise the actual challenges of conducting international business, from cross-border tax issues down to managing multiple languages, currencies, and time zones. And, since many of us live as expats or as members of multinational families ourselves, we understand the realities of those challenges as well.

In other words, we get it.

For almost 15 years, Esquire Group has been helping clients navigate the complicated world of international tax matters. Because we are a boutique firm, we provide our clients with the kind of highly personalised service you won’t get from sprawling corporations. You’ll get to deal directly with our experts and dedicated in-house employees—who have been carefully selected by founder and CEO Jimmy Sexton, LL.M.—instead of being relegated to seasonal contractors.

Interested in having us prepare your tax return?  Click here to get a quote.

Hayden Joseph & Co

Hayden T Joseph & Co

Tel: +44 20 3289 1040

Email: Help@AdvancedAmericanTax.com

Website: www.AdvancedAmericanTax.org

From our home in Southern Florida, Hayden T Joseph & Co, first expanded to the UK in 2011 and now has a presence in Dubai and 12 countries in South East Asia. Our firm's expertise extends beyond individual tax returns to more complex situations such as estate taxes, trusts, gifts and entity returns. We have many private clients with closely held companies and can assist with transfer pricing, structuring, business expansion or investments into the US, Dubai or Asia. Finally, we are IRS Certified Acceptance Agents so can assist with ITIN applications. Send us an email and let's setup an introductory call today!

SDC Global 

Stacy Collier, MPA, CPA\

P) 346.231.1195 | (F) 346.231.1194

Address: P.O. Box 1278, Columbus, Texas 78934

Email: stacy@sdcglobalcpa.com

Website: www.sdcglobalcpa.com

Expatriates have special tax considerations both at home and abroad. The complexity and constant change in tax laws and regulations demand a higher level of knowledge and service. It is important to work with a Certified Public Accountant knowledgeable of the unique reporting requirements facing US citizens residing abroad. The penalties are too significant to risk.

We make the tax compliance process as easy and painless for you as possible. We offer free consultations and up-front pricing.

Locations and time zones are not a hindrance, we have clients around the world, on six of the seven continents. We have systems established and in place to work with clients around the world. This includes a secure client portal for uploading documents.

Contact us today for a free consultation to discuss your filing needs.

H&R Block

Visit www.hrblock.com/expat-tax-preparation

Whether a new or seasoned expat, filing a US tax return may seem overwhelming, but luckily H&R Block Expat Tax Services can help! Their advisors specialise in taxes for US expats, relieving the stress of tax season and helping you meet your US tax filing obligations. Their virtual process is fast, easy, and secure.

H&R Block’s team of highly specialised CPAs, tax attorneys, and Enrolled Agents are trained to understand your unique tax situation. From simple returns to the more complex, your taxes will be completed with accuracy — in fact, it’s guaranteed!

H&R Expat Tax Services makes it easy for you to file taxes from anywhere. A dedicated tax advisor will be with you from start to finish, acting as an advocate throughout the filing process — all within a secure, virtual portal!

Satis Asset Management Limited

Contact: Ross Badger

Address: Ground Floor, 45 Pall Mall, London SW1Y 5JG

Tel: 020 7004 7129

Email: ross.badger@satisuk.com and gemma.walsh@satisuk.com  

Website: www.satisuk.com 

As an American living abroad your financial life is probably subject to many complexities. You may also be experiencing a reluctance from financial organisations to take you on. We are one of the few firms in the UK happy and able to provide you with the service you may be looking for.

We offer a family office fee-based approach that combines wealth management and specialist tax advice so that you can be sure you are making the most of your global financial position and reporting correct returns in the US and in the UK.

Our service includes:

• An understanding of your unique challenges

• An insight into the ever-changing cross border investment and tax reporting landscapes

• The ability to construct a ‘portable’ investment portfolio

• International tax planning advice and tax reporting in the US and the UK

• Administrative support

• Foreign currency advice

• Real estate advice

• Business and employee benefits advice.

By Dr. Sebastian Renz MRCGP DFSRH DOccMed – Medical Director

In the UK, the National Health Service (NHS) provides healthcare to residents free at the point of delivery. General Practitioners and consultant specialists in the NHS work hard to provide excellent healthcare to their patients. However, expatriates residing in the UK temporarily may not be eligible for NHS treatment and American residents may choose to have additional private cover. This article aims to give an overview of the private insurances available in the UK.

UK based insurances

There are several private UK insurances such as BUPA UK, AXA PPP, Aviva, WPA, Vitality Health or Simply Health offering a variety of packages. The main advantage is that they provide fast access to appointments with a consultant specialist and fast access to private diagnostics such as blood tests and scans. Unfortunately, private GP care is usually not covered and specialist referrals are required from your GP. Pre-existing conditions and routine health checks are often excluded. It is therefore important to review the policy carefully including the small-print.

International Insurances

Large global insurance companies such as Cigna, Aetna Global, Allianz and BUPA International offer comprehensive private health cover. These include consultant specialist as well as private GP care. The insurance policies are usually comprehensive but are more expensive than the mainstream UK insurances.

International insurances for expatriates from their home country

For international expatriates planning a move to the UK it is advisable to find out about private international insurance with their existing insurance in their home country. They often provide comprehensive health plans which are more cost-effective than mainstream international or UK-based insurances.

At +richmond practice we offer a GP membership package providing unlimited private GP consultations. The GP membership is particularly suited to individuals who either have no private insurance or have a UK based private insurance without private GP cover. For further information please contact us on 020 8940 5009 or email us at mail@richmondpractice.co.uk