Investment firm Aisa International has warned bad advice from unlicensed advisers is landing British people moving to EU countries with an unexpected tax bill.
According to Christopher Lean, the firm’s chief investment officer, some advisers are telling investors that Isas purchased in the UK remain tax-free, even after they take up residence in another country.
He noted that one problem with this advice is that all gains and income generated by the Isa are subject to declaration and assessment of tax in the country of client tax residence and are likely to be taxable in most cases.
Another issue is that an investment Isa only holds assets classified as a Markets in Financial Instruments Directive (Mifid) product and should only be advised on by qualified and registered Mifid advisers.
Lean added: “Certain third-party firms are offering services in or into the EU without the necessary credentials, licensing, and knowledge to accurately inform their clients. Expats with UK investment assets are in danger of receiving tax bills on their Isa accounts, which may be backdated and substantial, after being told the accounts are tax-free in the UK.
“There are reasons why only Mifid advisers are allowed to advise clients on investments: to protect the investor from bad advice and potential loss of money.”