Why you should change adviser when you move to Italy.

More and more UK clients are choosing to live, work or retire overseas. Italy has always been and continues to be a popular destination, and is attracting not just retirees but internationally mobile professionals, entrepreneurs and families.

If you have been working with a UK financial adviser, this could present a big challenge. You may have valued and trusted their advice for many years, but becoming resident in Italy can fundamentally change your financial planning requirements.

A different tax system, regulatory framework, pension rules and investment restrictions apply in Italy. Arrangements that might have been suitable for you when you when you were in the UK will need to be reassessed, once you move to Italy. The tax treatment of your pensions and investments will change, while local reporting requirements, succession laws and inheritance tax rules will introduce further complexity.

Without appropriate planning, you can face unexpected tax liabilities, unsuitable financial arrangements or difficulties accessing ongoing advice. Your adviser should have local financial and tax knowledge and consider your life in the future.

The importance of local knowledge

Planning across borders requires more than just a general understanding of international finance. It requires knowledge of the rules for residents of Italy and your country of origin.

The treatment of UK pensions, investment accounts, insurance-based arrangements and other assets differs considerably between the UK and Italy.  A product that is tax-efficient in the UK, such as an ISA, does not receive the same tax treatment in Italy.  You may also find that certain investment funds or financial institutions are unable or unwilling to retain you as a client when you change your residency to Italy.

Regulatory permissions are equally important. A UK adviser will no longer hold the permissions required to provide regulated advice once you become resident in Italy.  Even if they promise continuing service by offering ‘management but not advice’, (which is not a viable solution) without local knowledge or access to appropriate solutions they can be inadvertently creating more problems for you in the future.

Advisers naturally want to protect your longstanding relationship, but they must also recognise the limits of their permissions and expertise.  All advisers should operate in your best interests.  Finding a regulated adviser in Italy and working on a plan with your UK adviser, together, to transition you over is the best solution.

A UK adviser should feel comfortable that they can introduce you to a company like The Spectrum IFA Group whom they can work collaboratively with.  You gain access to relevant international and local expertise, while your relationship with your UK adviser is recognised and respected.

Your financial life does not stop at the UK border, but the rules   governing your pensions, investments, taxation and estate planning can change considerably when you move overseas.

A UK based adviser may have spent many years earning your trust, and the relationship should not be placed at risk simply because you relocate.

As an adviser and the manager of The Spectrum IFA Group, I have over 20 years of relevant international and local Italian financial planning knowledge and created a list of trusted professionals that I can refer you to.

Planning before your move

The most effective time to consider the financial implications of your relocation to Italy is before you change residence.

Decisions made in the months leading up to a move can have a lasting effect on how your income, investments, pensions and estate are treated.

Early engagement gives us time to plan and utilise any tax benefits in your home country, any tax and time planning opportunities in the year of your move and then any possible Italian tax incentives after your move.

Addressing these matters if you have already become resident in Italy becomes harder or more expensive to resolve, but not impossible.

Supporting you in your move

Cross-border planning is rarely a one-off exercise. Your circumstances will evolve as you move to Italy, develop businesses, sell assets, receive inheritances or approach retirement.

You may decide to remain in Italy long-term, or decide to move back to the UK, or divide your time between different countries. Your financial arrangements must therefore remain flexible enough to respond to further changes in residence, regulation and personal objectives.

Regular reviews are essential. This allows us to consider whether arrangements remain appropriate, whether legislative developments have altered your position and whether your longer-term goals have changed.