CashNews.co
UK expats living in the United States will be looking cautiously at the position that the incoming Trump administration may take ontaxes, healthcare, immigration, trade, and the broader economy to determine the financial implications for themselves.
In terms of tax policy, Antony Marziban, senior wealth manager at international financial advisory firm Hoxton Wealth, says expats could be affected by changes in tax policies affecting non-US income or cross-border financial transactions, depending on any shifts in IRS rules on foreign income reporting.
“President Trump has previously championed tax cuts and streamlined tax regulations, particularly for higher-income individuals and corporations,” explains Marizban.
“If he were to introduce further tax cuts, UK expats with higher earnings could benefit from lower federal taxes.”
Mr Trump’s stated interest in further reforming the Affordable Care Act (ACA) and reducing federal involvement in healthcare, could also adversely affect UK expats. “This could mean less government support for healthcare programs, possibly leading to increased premiums and out-of-pocket expenses for those on employer or private health insurance plans,” continues Marziban.
“This could particularly impact U.K. expats who aren’t eligible for company-sponsored health plans or have pre-existing conditions.”
In terms of exchange rates, the Trump victorycould influence the USD-GBP exchange rate, which, in turn, affects the value of UK pensions or income transferred from the UK to the US. Historically, Trump’s policies on trade and deregulation have created fluctuations in currency markets, leading to some volatility in the value of the dollar.
“A stronger dollar could reduce the purchasing power of UK expats’ UK-sourced income, while a weaker dollar could provide some relief for UK-based expenses,” continues Marziban. The firm also has a warning on immigration policy.
“Historically , the Trump team have taken a tough stance on immigration, and any stricter immigration policies could affect visa renewals and work authorizations,” adds Marziban.
“This might bring extra legal costs or even lead to some UK expats having to relocate if certain visa categories are tightened or discontinued. Uncertainty around visa status can also create financial instability, especially for expats with families or long-term financial commitments in the U.S.” However, it may not all be negative.
“UK expats invested in US stocks or real estate may see impacts based on Trump’s policies. For example, a focus on deregulation could boost certain sectors like energy and finance, potentially benefiting expats invested in these areas. On the other hand, if Trump’s policies lead to market volatility or economic uncertainty, this could impact the value of investments. Real estate markets may also experience changes based on economic growth and interest rate trends, affecting UK expats who own property in the US.”
In terms of the estimated 166,000 US nationals living in the UK, Hoxton Wealth is advising US expats to be aware of the incoming Trump administration’s potential position on taxes, healthcare, investment strategies and trade to determine the financial implications for themselves.
George Stainton, senior wealth manager at international financial advisory firm Hoxton Wealth, who works on financial planning with US expats, says they could see changes in their tax obligations. “President Trump has previously emphasized lowering corporate tax rates and simplifying the tax code,” says Stainton.
“Expats could see changes in tax obligations, especially if any reforms brought in affect the Foreign Earned Income Exclusion (FEIE) or the Foreign Tax Credit (FTC). That’s why we are advising expats to close monitor and get advice on any proposed changes to tax laws. Expats may also need to reassess their investment strategies based on anticipated changes in policy, fiscal outlook, and economic conditions under the incoming Trump administration.” Stainton adds that a second Trump presidency could also lead to a rollback of financial regulations.
“This might benefit expats in terms of ease of banking, investment opportunities, and access to various financial products without increased compliance burdens.” If the incoming administration were to continue to promote an “America First” trade policy, Stainton says, it could affect the global economy and, consequently, currencies. Expats with interests in foreign investments or businesses, therefore, should be aware of potential volatility, particularly in currency exchange rates.
“In terms of international relations,” says Stainton, “changes in foreign policies might impact expats living in specific countries. Economic sanctions, trade agreements, or diplomatic ties can all affect job stability, investment opportunities, and overall economic health.”
Healthcare could also become an issue, as any changes in healthcare policy, especially in terms of affordability and accessibility for Americans abroad, could influence expatriates’ financial planning, with the possibility of them needing to consider alternative health insurance options if reforms impact coverage.