Financial Planning in Russia: A Guide for Expats and International Investors

The financial planning landscape for individuals with connections to Russia has changed fundamentally since February 2022. The Russian Federation's invasion of Ukraine and the subsequent imposition of unprecedented Western sanctions have created a complex environment in which long-standing planning structures — UK-Russia DTA applications, correspondent banking relationships, offshore asset structures — have been disrupted, frozen, or rendered operationally impossible. This guide is written primarily for three audiences: internationally mobile individuals of Russian origin or with Russian financial connections who are now resident in the West; foreign professionals who previously worked in Russia and retain pension or asset entitlements there; and advisers managing legacy Russian-linked wealth. It does not constitute legal advice and the position changes rapidly; professional advice from sanctions-specialist counsel is essential.

Sanctions: The Overriding Context

Since March 2022, the United Kingdom, European Union, and United States have imposed extensive sanctions on Russia, including:

• Asset freezes on listed individuals (primarily close associates of the Russian government — so-called "designated persons" or "oligarchs") and on specified Russian entities.
• Transaction prohibitions: UK-licensed financial institutions are prohibited from making funds available to, or for the benefit of, designated persons. Even non-designated Russian nationals may face de facto account closures as banks apply correspondent banking de-risking.
• Investment bans: UK persons are prohibited from making new investments in Russia in most sectors.
• Professional services prohibitions: UK-based legal, accounting, consulting, and trust services firms are restricted from providing services to designated entities.

The OFSI (Office of Financial Sanctions Implementation) administers UK financial sanctions. All UK-resident individuals and all UK entities must comply; breach carries criminal penalties. Non-designated Russian nationals in the UK are generally not subject to direct asset freezes but are affected by the de facto de-risking behaviour of UK financial institutions.

This guide does not assist in evading or circumventing sanctions. Any structure or plan that has the effect of making assets available to a designated person is prohibited regardless of its legal form.

Tax Residency in Russia: Pre-Departure Context

For individuals who were formerly Russian tax residents — or who have ongoing Russian-source income — understanding the Russian tax framework remains relevant for legacy planning even where they are no longer resident.

Russia taxes individuals on the basis of residence. The threshold is 183 days of presence in Russia within a 12-month period. The previous near-flat system (13 per cent up to RUB 5 million, 15 per cent above) was replaced from 1 January 2025 by a five-band progressive scale for residents, running from 13 per cent on income up to RUB 2.4 million per annum to a top rate of 22 per cent on income above RUB 50 million (intermediate bands of 15, 18 and 20 per cent apply between those thresholds). Non-residents are taxed on Russian-source income at a flat 30 per cent rate (with exceptions for certain income types).

Since 2022, a substantial number of Russian nationals — estimated in the hundreds of thousands — have emigrated to Georgia, Serbia, Armenia, Kazakhstan, UAE, Turkey, and other jurisdictions. Those who ceased Russian residence in 2022 or subsequent years may have complex residency positions: potentially tax-resident in neither Russia nor their new jurisdiction for the transition year, or simultaneously resident in two countries. Specialist advice is essential to establish the correct filing position.

UK-Russia Double Taxation Agreement: Effectively Suspended

The UK and Russia concluded a DTA in 1994. Formally, the treaty remains in force as of 2026 — the UK has not unilaterally terminated it. However, Russian practice since 2022 has been to suspend or not enforce DTA provisions reciprocally, and the practical ability to claim treaty relief in Russia as a UK resident (or vice versa) has been significantly curtailed. Information exchange under the DTA has effectively ceased. The UK government has not formally suspended the treaty, but practitioners should not rely on it operating normally in the current environment.

For UK-resident individuals receiving Russian-source income — dividends from Russian companies, rental income from Russian property — the DTA's reduced withholding rates are theoretically available but practically difficult to apply. Tax credit relief under UK domestic law (unilateral relief) may provide partial mitigation of Russian withholding taxes, but the mechanics require individual analysis.

Russian-Source Income for Former Residents

Russian withholding taxes on income paid to non-residents (those not meeting the 183-day threshold) are generally 15 per cent on dividends and 20 per cent on interest and royalties, subject to any applicable DTA reduced rate. Where a DTA applies and can be claimed, rates are reduced.

For UK residents receiving Russian dividends or rental income since 2022:

• Ruble-denominated income involves exchange rate risk given ruble volatility and the practical difficulty of remitting rubles through mainstream international banking channels post-sanctions.
• Where income is from non-sanctioned entities, it may in principle be received through third-country banking routes; practitioners should take legal advice on the permissibility of such structures.
• UK income tax applies on the worldwide income of UK-resident individuals; Russian withholding suffered may be credited against UK income tax under domestic rules or (where applicable) under the DTA.

Oligarch Asset Freeze: Practical Implications

Individuals who are designated persons under UK, EU, or US sanctions regimes face specific asset freeze implications:

• All funds and economic resources held in the UK or held by UK persons must be frozen and cannot be dealt in.
• A designated person cannot deal in their own UK-sited assets without an OFSI licence.
• OFSI licenses are available for specific purposes (maintenance payments, legal fees, in some circumstances business expenses) but not for general asset management.

HNW Russians who are not designated but who have family members, business partners, or shareholding connections to designated persons must take legal advice on whether their own assets are caught by the beneficial ownership and "associated persons" provisions of the sanctions regimes. These provisions are broadly drafted and the enforcement approach has been more active since 2022.

UK lawyers, accountants, and trust administrators are required to identify designated persons in their client base and cease relevant services.

Alternative Jurisdictions for Russian-Linked Wealth

For non-designated Russian nationals who have relocated and are restructuring their affairs:

• UAE: Has attracted a large community of Russian expatriates since 2022. No sanctions on non-designated individuals; no income tax; open banking for appropriately documented non-sanctioned individuals. Dubai has become the most common jurisdiction for relocated Russian HNW families. However, UAE banks also apply CDD and are cautious with Russian-connected accounts.
• Turkey: Has maintained commercial relationships with Russia; provides banking access for Russian nationals. Istanbul and Antalya have significant Russian communities. Turkey has a DTA with Russia.
• Georgia, Armenia, Kazakhstan: Have absorbed large numbers of Russian IT professionals and business owners who relocated specifically to maintain access to Western banking and IT infrastructure. Banking access varies; compliance requirements are increasing.
• Serbia: Popular for Russian nationals; no EU sanctions apply as Serbia has not joined EU sanctions. Banking and residency available.

None of these alternatives offers a long-term solution for individuals seeking full integration with Western financial systems while maintaining active Russian business interests. The bifurcation of global financial infrastructure post-2022 is not resolved by jurisdiction-shopping; it requires fundamental restructuring of business activities and asset ownership.

UK Pension Implications for Former Russia-Based Workers

UK nationals who worked in Russia before 2022 and contributed to Russian pension schemes (mandatory pension system, or occupational plans) face specific challenges:

• Russian pension funds: Access to accumulated Russian pension entitlements as a non-resident may be restricted or practically impossible where payment can only be made into a Russian ruble account.
• UK state pension: Accrued entitlements based on NI record prior to the Russia assignment remain intact. There is no reciprocal social security agreement between the UK and Russia, so Russian social insurance contributions cannot be credited towards UK state pension entitlement; UK nationals working in Russia should consider maintaining voluntary Class 2 or Class 3 NI contributions to protect their record (though making such payments may itself be complicated by the sanctions environment).
• QROPS: Any QROPS structure previously established in Russia was always highly unusual and would require specialist review.

Property in Russia: Practical Considerations

UK nationals or UK-resident individuals holding Russian property face:

• Practical inability to sell Russian property and repatriate proceeds through mainstream banking channels.
• Rental income denominated in rubles with no straightforward mechanism to transfer to a UK account.
• In the event of property sale, proceeds would require ruble conversion and transfer through Russian banking channels, which are not connected to SWIFT for most purposes following the 2022 disconnection.

For UK-resident individuals holding Russian residential property for their own use, maintaining it is primarily a personal choice. For those attempting to liquidate Russian property, specialist sanctions and Russian legal advice is required before any steps are taken.

Expat Community Context

Russian expatriate communities have grown substantially in Istanbul, Dubai, Tbilisi, Belgrade, Berlin, Tel Aviv, and several other cities since 2022. These communities include IT professionals who relocated to continue serving international clients, business owners who moved their corporate structures offshore, and families of individuals with existing Western connections. Financial planning for this community involves navigating:

• Dual or uncertain tax residency positions.
• Legacy Russian banking and investment accounts inaccessible from abroad.
• Closed or restricted pension entitlements.
• New residency in jurisdictions with unfamiliar tax systems.
• The need to rebuild banking relationships in a heavily de-risked environment.

Each situation is individual; there is no generic answer, and the pace of regulatory change requires ongoing professional monitoring.

How Global Investments Can Help

Global Investments does not assist with sanctions evasion or circumvention in any form. We do, however, work with non-designated Russian-origin clients and with UK nationals who have legacy financial connections to Russia to structure their affairs compliantly and practically in the current environment. This includes assessment of residency and domicile positions for those who have recently relocated; portfolio construction in neutral jurisdictions; pension planning for those with disrupted Russian entitlements; UK income tax advice on Russian-source income; and coordination with sanctions-specialist legal counsel where the position requires it.

This guide reflects our understanding of the law and practice as of June 2026. Sanctions regimes, treaty status, and banking access change rapidly. Nothing in this guide constitutes legal or sanctions advice. Always seek independent specialist advice — including from UK-qualified sanctions lawyers — before taking any action involving Russian-connected assets or income.