Truss, Brexit and banking
The UK’s new Prime Minister Liz Truss is set to scrap legacy EU legislation in 2023, according to recent reports. In an upcoming finance meeting with top British financiers (the CEO of Legal and General, for example), Reuters says, she will outline plans for the reform of regulatory regimes, such as Solvency II, which sets out regulatory requirements for insurance firms and groups, covering financial resources, governance and accountability, risk assessment and management, supervision, reporting and public disclosure. MiFID, which provides a legal framework for securities markets, investment intermediaries, and trading venues, is also in line to be reformed.
UK bankers say, however, that they would like global talent hire to be made easier, and that there is ‘no appetite’ for a ‘bonfire of regulations.’
‘Next generation’ of hubs for expats
Bloomberg took a look in mid-August at the ‘next generation’ of expat destinations, now that Hong Kong and some of its Asian city rivals are no longer proving as attractive due to political and Covid-19 crackdowns. Top of the list is Kuala Lumpur, which in 2021 ranked first in an InterNations survey of some 12,000 expats, and which proved particularly appealing in regard to housing. Internet connections can be patchy, apparently, but expats report a better quality of work/life balance than in hubs such as Shanghai, and enjoy the cultural diversity. Back in Europe, Lisbon is enjoying a boom, and we’ve reported already on the number of American expats looking seriously at Portugal as a desirable destination in 2022.
In the Middle East, Dubai is retaining its attraction for expats and is aiming at supremacy as a digital and crypto hub. The authorities’ response to the pandemic has garnered respect, too – appealing for anyone who is looking at Covid-19 and possibly other diseases as becoming a feature of the future.
Another fast-growing tech hub is Bengularu (formerly known as Bangalore). Venture capital is flooding into the South Indian city from organisations such as Goldman Sachs and the Silicon Valley digital supremos, causing a start-up boom. Infrastructure might not be so good yet, and the city can prove challenging to those coming in from First World countries, but those difficulties might well prove to be a teething problem if the region continues its upward economic trajectory.
InterNations also featured Mexico City as a top destination, and that’s still proving to be the case for many North Americans, in particular. Start-ups are booming here, too, partly as a result of the relative proximity to California. Further south, Rio de Janeiro is on the rise again as a tech hub; having been overshadowed by Sao Paolo, it’s now attracting expats in droves.
So, if you’re considering a relocation, you’ll have plenty of interesting choices beyond the now-traditional destinations.
Student loan ‘forgiveness’
President Biden announced at the end of August that 95% of student loan holders will be eligible for loan forgiveness, dependent on income. This may be fairly straightforward for American residents in the USA, but what if you’re an expat? How will student loan forgiveness affect you?
At present, you can use the Foreign Earned Income Exclusion to exclude over $100,000 from your annual tax return. But can you use this to reduce your income and thus qualify for loan forgiveness when you’re abroad?
Firstly, Student Loan Debt Relief will not be treated as taxable income on your US tax return, but, confusingly, individual states could still consider your forgiven debt as taxable. On what we know of the loan forgiveness programme, it seems likely that you will be able to utilise FEIE to reduce your income below the relevant cap ($125K) and thereby write off at least some, if not all, of your loan. But it’s not yet clear what the authorities are going to define as ‘income’, and this will have an impact on your eligibility.
Watch out for a piece of documentation called Form 1099-C. This will be issued by the US Department of Education. Note that only loans granted by the Department of Education are eligible for forgiveness under this scheme.
Australian expats: top destinations
The Australian Bureau of Statistics’ population clock points out that one Australian resident leaves the country on average every 1 minute and 13 seconds, to take up long-term residence abroad. Where are these expats heading? Evidence suggests that China, Hong Kong and Singapore still top the list in Asia, whilst in the Middle East top destinations include Dubai, Riyadh and Abu Dhabi.
However, the country also sees one person arriving to live in Australia every 54 seconds, according to the population clock. The Australian population is set to grow: the trend is distinctly upwards and the country currently ranks fifth among OECD countries for population growth.
No news is not good news
At least, it isn’t when it comes to Brits in Spain and their driving licences, an issue to which we’ve devoted some coverage this summer. A further ‘update’ came from the British Consulate in late August, repeating that they deem the issue to be important and are continuing to work on it – apparently, however, without result. That said, the update did note that some progress has apparently been made on the ‘annexes’ – the outstanding queries which the Spanish authorities have yet to answer.
Calls for a “Minister for Expats”
In August, the Daily Express reported calls by Gina Miller, the campaigner against Brexit who led the successful legal campaign against Boris Johnson’s prorogation of Parliament in 2019, for a dedicated ‘Minister for Expats’ post to be set up in the British government, to stop Brits abroad being treated like second class citizens.
She also criticised the government for its failure to set out a ‘votes for life’ timeline to allow long-term UK expats to continue to vote in British elections. Speaking at the launch of the overseas arm of the True and Fair Party, which Miller now leads, she added, “There is no starker deficit than the one faced by our six million overseas citizens.”