UK Elections: Financial Impact on Brits Abroad
British expats were able to vote in the recent UK elections, held in the first week of July, after legislation removing their voting rights if they had been out of the country for 15 years was scrapped. This change increased the potential voting pool from 1 million to about 3.3 million Brits abroad, although not all of them will register.
Labour, who are now in power, were not in favour of the new ruling, protesting that the move would create a loophole for “tax haven billionaires” keen to support the Conservative party, but in an interesting development, many expats resident in Spain (many of whom are lifelong Conservatives) told the Financial Times this month that their anger over Brexit would make them abandon the Tory party and take their vote elsewhere. So the legislation that Labour were keen to prevent may in fact have benefited the party.
Expats in Spain say that the driving licence issue, customs duties, and the ban on importing prescription sunglasses from the UK are driving discontent with Brexit and the government that brought it about. But the most important source of this discontent is the new residency regulations: a British citizen retiring to Spain must now show that they have €28K in the bank for five years, a stipulation that many literally cannot afford. The Spanish authorities have, post Brexit, been cracking down on Brits who have not taken out residency and who are now, under the new rules, only allowed to stay in the country for 180 days. Many of these expats moved to Spain in the first place as a result of the lower cost of living.
One local British solicitor told the press that, potentially, 80% – 90% of his clients would have voted against Brexit had they not been disenfranchised. Now they are able to vote, but it’s too late. The BBC also spoke to expats who have been campaigning for pension rights on behalf of Brits abroad. It remains to be seen whether the change of government will bring any substantial shifts to the current legislation on pensions. The Liberal Democrats have said that they want a Minister for Expats, to look after Brits who have moved abroad. After all, Italy, Croatia, Portugal and France have such a representative already. Whether the Lib Dems will be able to lobby successfully for this given their recent parliamentary gains is also a matter for debate. We’ll keep you posted.
Ant Group Boosts China Travel
Ant Group’s new mobile payment app, Alipay, has seen a 700% year on year increase in spending on the May Day holiday by overseas travellers to China. This spending leap is probably caused by an influx of international tourists generated by China’s more relaxed short stay visa exemption policy. Overall, Alipay says that its records show payments of 118.2 trillion yuan (US$16.25 trillion) in transactions in the last quarter of 2023, and this is set to rise with the development of new technology.
Alipay is currently rolling out its Tap! app, in cities across mainland China. Using this, you’ll be able to tap a vendor’s USB attachment with your smartphone and pay via this method. The aim is to speed up in-store mobile payments, and it will be compatible with both Android and Smartphones. Rather than a card emulation system, like Apple Pay and Google Pay, Tap! turns your smartphone into an NFC tag reader.
The group is also working on AI ‘co-pilots’ to allow you to make natural language orders (for instance, “I’d like a spiced latte, please”) based on a large language model. Another virtual assistant, Zhixiaobao, allows you to invest and explore insurance options via your phone: this currently has 43 million users through Ant Fortune and Ant Insurance services. Angel, a third assistant, enables you to make hospital appointments and access telehealth options; Ant says that reception enquiries at a trialled hospital fell by 50% after Angel was introduced.
Portugal Announced ‘Skilled Expat’ Tax Breaks
Joaquim Miranda Sarmentos, Portugal’s finance minister, has recently told the press that the country will be announcing tax breaks to attract skilled expats to Portugal. The proposed tax break will be a lower IRS rate of 20% and is one of the 60 measures that the Government has included as an economy-boosting package.
Sarmentos said that “It will exclude dividends, capital gains and pensions, which was a problem between Portugal and countries like Finland or Sweden.” The latter countries complained, due to tax bonuses attracting retirees who then stopped paying tax in their home nations.
Tiller Technologies Join HSBC Expat
Tiller Technologies have joined forces with HSBC Expat to improve cross border digital verification technologies, a move which both companies say will enhance the onboarding process. TT CEO Jonathan Wauton told the press:
“Working with HSBC Expat highlights the importance of tech-based solutions in addressing complex challenges in offshore and international finance. We worked closely with HSBC Expat to create a strong solution which meets tough cross-border regulations, and which fits with the JFSC’s consultation efforts.”
Nicola Gardner, HSBC Expat Head of Digital, said:
“Incorporating an automated address check solution into our onboarding process reflects our commitment as a Bank to provide a fully customer-centric approach. Our aim is to enhance the speed and efficiency of onboarding for our customers, wherever they are in the world. It also underlines our ambition to drive our own growth safely through the adoption of digital solutions that align to cross-border regulation.”
These new ID verification systems are being introduced as older ones gradually become increasingly insecure. HSBC is not alone: Nat West also announced its own cross-border digital verification system, OneID, a few days ago. This will be available in Sweden, Finland and Norway but is likely to be rolled out elsewhere: OneID is currently operational across 200 countries. Customers in relevant regions will now have three ways of undertaking digital identity verification:
- Bank-verified identity for UK account holders
- Local bank ID solutions for Nordic account holders
- Document-scanning ID solutions using government-issued documents.