British olim could be the big losers in the upcoming UK election
Current Conservative Party leader Boris Johnson must be hoping that this December’s vote.
By ANDREW ALBUMThe Parliament of the United Kingdom(photo credit: REUTERS)
The last time the British people went to the polls in December was in 1923, when the Conservative Prime Minister Stanley Baldwin attempted to strengthen his grip on Parliament to push through his legislative agenda. Sadly, he failed.Current Conservative Party leader Boris Johnson must be hoping that this December’s vote – which he called in an attempt to break the impasse over Brexit – does not have a similar unhappy ending.Johnson’s gamble has heralded what most pundits are calling “the hardest to predict vote in decades” due to the turmoil that the protracted Brexit saga has created. The outcome of the election – which pitches the current prime minister against the socialist agenda of the Jeremy Corbyn-led Labour Party – could have a profound effect on the country.But while many in the UK are approaching the poll with unprecedented fear about the implications of its outcome, among the biggest losers could be olim who have moved to Israel from the UK.An outright Labour Party victory will herald the most radical re-shaping of the British economy. Corbyn is campaigning on a platform of significant spending increases, the re-nationalization of key businesses that were privatized in the past 30 years, and a move to force large companies to give away a 10th of their shares to employee trusts.For Britons living in Israel, the implications could be profound – the expected imposition of exchange controls would leave investments trapped in the UK, an anticipated plunge in the value of sterling could make the cost of living in Israel prohibitively expensive while predicted tax hikes may significantly impact the value of UK assets still owned by olim.While the polls do not currently predict a Labour majority, experts warn that they should not be relied upon. Furthermore, another hung Parliament is a distinct possibility, which will mean no end to the ongoing instability surrounding Brexit and therefore trigger a further downward move in the value of the pound. Even a Conservative majority will not end Brexit uncertainty, as negotiations will need to continue for many years with the European Union over a new relationship.“Olim from the UK who received advice before they came may be exposed to significant risks from the election’s outcome,” says accountant Mark Struel. “Getting advice from experts here in Israel who have solutions to these issues is critical.”So what can UK olim do?Reviewing the arrangements they have, ideally with an adviser licensed in Israel, is an essential starting point. In addition, “moving cash deposits and the custody of non-shekel investments to an Israeli bank means that you would no longer be subject to the risk of exchange controls whilst still enjoying the 10-year tax exemption for new olim,” adds an executive at a leading Israeli private bank.
In the bottom line, don’t ignore the problem in the hope that it will go away.The writer is senior wealth manager at Pioneer Wealth Management. The aforementioned information is not a substitute for personal investment marketing or portfolio management, which takes into account the particular circumstances and special needs of each person.
