No ISA, No Problem: Why British Expats in Europe Need a Smarter Investment Strategy

The UK’s Spring Statement has signalled the government’s intent to reform ISAs,  though no concrete changes were announced, the writing is on the wall. The Treasury is clearly looking to push more capital into the UK stock market and is considering how ISA allowances and incentives can be reshaped to do it.

For British expats, while ISAs are no longer an option, this looming change is a reminder that relying on UK tax breaks is not a sustainable investment strategy.

So, if you’re a British expat living in Europe, what should you be doing? The answer isn’t waiting to see what UK politicians decide next, but rather building an investment strategy that works globally, not just in Britain.

Why Expats Need a Tax-Efficient Investment Plan

British expats can look beyond UK-based investment solutions and take advantage of tax-efficient options available in Europe and internationally. A well-structured global investment strategy ensures you’re not at the mercy of UK tax policies that shift with every budget cycle.

Here’s how expats in Europe can structure their investments for tax efficiency:

1. Local Tax-Advantaged Accounts – Use What’s Available in Your Country

Many European countries offer investment wrappers that provide tax benefits similar to ISAs, but tailored for local residents. Some examples include:

• France: Assurance Vie – A popular tax-efficient investment vehicle that offers benefits on both capital gains and inheritance tax.
• Spain: PIAS (Plan Individual de Ahorro Sistemático) – A long-term savings plan that offers tax-free growth if held for more than five years.
• Switzerland: Pillar 3a can be used to receive a tax rebate against income from contributions, capped at CHF 7,056 per year.

By understanding and using the tax-efficient accounts where you live, you may find better investment options than relying on a UK-based ISA.

2. Offshore Investment Bonds – Control When & Where You Pay Tax

One of the most effective investment tools for expats is an offshore investment bond. These allow you to:

• Defer tax on your investments, only paying when you withdraw funds.
• Choose the tax jurisdiction where you take income, helping you reduce overall tax liability.
• Structure withdrawals efficiently, minimising tax exposure when accessing your wealth.

For British expats, offshore bonds offer flexibility and tax efficiency that UK-based accounts simply can’t match.

3. International Investment Platforms – A Global Approach

Rather than relying on UK-centric solutions, expats can diversify their investments globally. International platforms offer:

✅ Multi-currency investing, reducing unnecessary FX risk.
✅ Access to global markets, rather than being tied to UK assets.
✅ Tax-efficient structures, designed for expatriates.

Many UK investors are currently facing reduced tax advantages, making this the perfect time for expats to explore more flexible, international options.

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Example: The Impact of Annual Fund Switching Under Spanish Taxation

Many investors actively manage their portfolios by switching funds annually. However, for a Spanish tax resident, each switch inside an ISA is a taxable event, reducing the long-term growth potential. Meanwhile, a Spanish-compliant investment vehicle allows for tax-deferred internal switches, preserving compounding benefits.

Comparison: ISA (1 Fund Switch Per Year, Spanish Tax Applied) vs. Spanish-Compliant Investment (Tax-Deferred)

Assume an investor places £100,000 in an ISA or a Spanish-compliant investment, achieving 7% annual growth over 10 years. In the ISA, one fund switch per year triggers tax under Spain’s progressive rates (19%-28%).

Key Takeaways:

• The Spanish-compliant investment grows £23,867 more due to tax-free fund switching.
• The ISA faces capital gains tax on each switch, reducing overall compounding.
• Using a Spanish-compliant investment vehicle eliminates tax drag, optimizing long-term returns.

‍For UK expats in Spain, shifting investments into a Spanish-compliant structure can significantly improve wealth accumulation.

*AI software was used for an estimation of the annual tax applied to the fund switches, and they do not represent real tax rates in Spain, it is subjective to the person's financial position, whether they are under Beckham's Law, and other income received.

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The Role of a Financial Adviser: Why You Need Expert Guidance

One thing is certain, tax rules change, but smart planning doesn’t. With the Spring Statement confirming that ISA reform is on the table, albeit delayed until the Budget, British expats have a window to reassess their strategy, and a clear warning that relying on the status quo isn’t a long-term solution. And while UK-based investors may struggle to find new ways to shelter their savings from tax, expats have options, if they know where to look.

That’s where having a financial adviser in your corner makes all the difference. A good adviser’s job isn’t just to keep up with tax changes, but to future-proof your investment strategy so you always get the best possible outcome.

✅ Tax Mitigation – Structuring your investments to keep your tax bill as low as possible.
✅ Global Investment Strategy – Making sure you’re not stuck with a UK-centric plan when better options exist.
✅ Long-Term Planning – Ensuring your investments align with your future goals, whether that’s retirement, wealth preservation, or inheritance planning.

Relying on UK allowances that could disappear overnight is a gamble rather than a strategy. If you want to build a secure financial future, you need a plan that works regardless of UK tax changes.

Take Control of Your Financial Future

With the UK government increasingly looking to tighten tax breaks, tax-efficient investing is becoming harder for those relying on UK-based accounts. Expats, however, have the flexibility to explore a wider range of investment solutions that aren’t dictated by the UK government’s next policy move.

If you’re still holding onto UK investments that may no longer serve you, now is the time to rethink your approach. A global investment strategy ensures you keep more of your money, no matter where in the world you live.

Want to explore your options?

Get in touch, and let’s build a strategy that ensures your investments are working as hard as you do.