From the moment of our birth, a government lays claim to us as its own. They meticulously record our births, provide care during our formative years, and anticipate a lifelong contribution to their coffers in the form of taxes. Historically, a sense of intergenerational allegiance to one’s country and flag offered a measure of security. However, the landscape has evolved in our globalized world, where an increasing number of individuals contemplate altering their tax affiliations.

It is imperative to delve into the realm of financial emigration for the purpose of safeguarding one’s wealth. This entails the strategic cessation of tax obligations to one country and the redirection of one’s taxable assets to another. Additionally, it involves the intricate process of pension transfers and navigating the intricacies of Reserve Bank restrictions.

Tax Emigration

Since the inception of the Magna Carta and the era when the British Empire held sway as one of the largest empires in modern history, it is unsurprising that many nations worldwide have adopted the British methodology of imposing taxes on their citizens.

Emigration often emerges as the sole avenue for individuals to liberate themselves from the obligation of paying taxes to their country of residence. Most nations have established double-taxation treaties, exempting citizens who choose to emigrate from ongoing taxation. Yet, exceptions do exist, with the United States representing a notable case. However, all hope is not lost, for with meticulous planning, the Internal Revenue Service (IRS) offers ample opportunities for citizens who have emigrated to either pay minimal or no taxes to the USA.

Moreover, countries such as the United Kingdom, South Africa, Ireland, various European Union member states, and numerous others offer tax emigration solutions.

The Hull Rule

In the early 21st century, a consensus emerged among the world’s leading nations regarding the appropriate level of protection for foreign investments. These nations concurred that investors deserved the safeguarding of their property under international law. Any act of a host nation expropriating a foreign investor’s assets required just and swift compensation. This perspective should come as no surprise.

The nations responsible for formulating this rule were predominantly affluent European countries whose citizens engaged in foreign investments while facing relatively limited inward foreign direct investment. Nevertheless, customary international law does not scrutinize the motivations behind a country’s actions but focuses on practices and a sense of legal obligation. Irrespective of the intentions of these nations, it is reasonable to assert that, at that time, the prompt and adequate standard had become customary international law.

Today, the Hull formula serves to protect both investors and governments when investors opt for emigration. It ensures the seamless transfer of all assets from a prior jurisdiction to the new tax residence whenever such a move is deemed advantageous for the investor.