Aisa International has identified a concerning increase in unlicensed advisers giving incorrect advice to investors, which it says can result in substantial, unexpected tax penalties.

Specifically, the unqualified advisers are telling investors that Individual Savings Accounts (ISAs) purchased in the UK remain tax-free, even after they take up residence in another country.

However, there are two problems with this advice:

1. ALL gains and income generated by the ISA are subject to declaration and assessment of tax in the country of client tax residence and are likely to be taxable in most cases.

2. An investment ISA holds only assets classified as a Markets in Financial Instruments Directive (MiFID) products and can only be advised by qualified and registered MiFID investment advisers in, or outside, the UK and within the European Union and USA.

Christopher Lean, Aisa International chief investment officer, said: “Certain third-party firms are offering services in or into the EU without the necessary credentials, licencing, and knowledge to accurately inform their clients.

"Expats with UK investment assets are in danger of receiving tax bills on their ISA accounts, which may be backdated and substantial, after being told the accounts are tax-free in the UK. There are reasons why only MiFID advisers are allowed to advise clients on investments: to protect the investor from bad advice and potential loss of money.”