By Andrew Album, Financial Advisor. Moving from the UK to Israel brings exciting opportunities but requires careful financial planning.
Guiding Your Financial Success Across the UK and Israel | Trusted Financial Advisor | Wealth Management Expert | Dual-Licensed in the UK & Israel
March 26, 2024
Moving from the UK to Israel isn’t just a change of scenery, it’s a transition into new financial landscapes, especially for individuals looking to optimise their wealth in a new environment.
Ensuring success requires meticulous financial planning tailored to the unique needs of those accustomed to the complexity of managing significant assets.
Here is a checklist, designed to guide British olim in the intricacies of establishing economic security and prosperity with their wealth in Israel.
1. Open a local bank account
Choose an Israeli bank that meets the needs of olim, offering personalised services and English-speaking staff. Prioritise banks known for their comprehensive online banking solutions and private banking services.
2. Understand the tax implications
Navigating the tax landscape is critical. The tax regime in Israel offers certain benefits to new olim, but it is important to understand its implications for global income and assets. Consult a tax advisor skilled in UK-Israel tax planning to leverage tax efficiency and preserve your wealth and beware of traps like US Estate Tax that you may suddenly become liable for.
3. Review your pensions
The ten-year tax exemption for new olim when combined with the UK-Israel Double Tax Agreement provides a potentially unique opportunity. It may be possible to cash in your entire pension fund and pay no tax in either jurisdiction. This may even be possible for those with final salary schemes. For those not old enough to draw benefits, who have QROPS schemes or UK pensions that need to remain invested, advice from an expert who understands the regimes in both countries is crucial.
4. Think carefully about currency
Currency is arguably the most important aspect of financial planning once you have moved to Israel, which requires a completely new mindset. Your expenses will be in shekel and the US Dollar is hugely important. Leaving assets and income in pounds creates considerable risks which can be avoided with careful planning.
5. Review your investment strategy
Too many British olim have a tendency to stick with local investments that are familiar to them from the time they lived in the UK. Alternatively, their advisers manage portfolios that are suitable for clients who live in the UK.
This is known as ‘home country bias’ and is considered to be a very poor investment strategy as it creates an avoidable risk and one that is very costly.
6. Health and insurance
While Israel’s public health system is robust, those accustomed to the highest standards can arrange private health insurance. Ensuring your home and possessions are correctly insured is as important in Israel as it was when you lived in the UK.
7. Property
The Israeli real estate market presents it with unique opportunities and challenges. Retaining property in Britain can land you with considerable tax liabilities and other significant risks. There are property and real estate businesses who focus on assisting British olim with property investments and decisions in Israel.
8. Define a comprehensive financial plan
Building a financial plan that reflects your aspirations and lifestyle is essential. Collaborate with an experienced wealth management consultant and financial advisor to plan strategies for asset management, tax optimisation, and next-generation planning. The highest levels of personal advice can only be provided by a financial advisor based in Israel, who understands the financial landscape in both countries.
8. Connect with olim communities
Integration into Anglo communities can offer not only social benefits but also insights into wealth management and lifestyle in Israel. These networks can be invaluable for advice, recommendations, and professional connections.
Embarking on your journey to Israel involves navigating a complex financial landscape, especially for individuals seeking to preserve and increase their wealth. By working with the right experts and careful planning, you can ensure that your financial transition is as smooth and successful as your new life in Israel promises to be.
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