With increasing numbers of British people moving abroad to live and work there is a growing demand for financial advice to put their affairs in order before they leave.
That’s because for there are some plans expats need to put in place before leaving these shores.
For instance, pay off any UK debts before leaving. There are a number of reasons for doing this, the main one being that should if return, you won’t be hit with a bad credit rating.
You also need to be aware that currency fluctuations between the UK in the country you live in could increase the amount you actually owe quite substantially.
Paying off your mortgage may not be possible but you really should clear your credit cards and personal loans.
Here are some other good ideas to bear in mind before you leave:
- It’s a good idea to keep your UK current bank account – but let your bank know that you are emigrating and they can keep watch for any unusual transactions.
- If you haven’t organised anywhere to live, ask your bank for a letter of reference to help you rent a property in your new country of residence.
- Before you actually leave, it’s time well spent looking into international bank accounts as these will usually bank in different currencies. They are also very useful should you have some financial commitments in the UK such as paying a mortgage.
By doing so, you can run two current accounts alongside each other; use one for Euros or whichever country’s currency you use and the other for pounds sterling. Transferring money between the two is very straightforward and you don’t usually incur a transfer fee.
Expats and UK tax
And when it comes to paying taxes while resident abroad, you’ll find that planning again will pay off.
It’s not that unusual for expats to pay tax twice. They will pay in the UK and again in their new country so it’s important to find out if the country you’re going to live in has a double tax agreement with the HMRC. In essence, this agreement will tell you who you will pay tax to for that particular time of residence.
Don’t forget to tell the tax man you are leaving – and always file a final tax return to draw a line under any money you may owe – or be owed.
Popular places that British people emigrate to such as Australia or New Zealand, Spain and France as well as Canada and the USA all have double tax agreement with the HMRC.
But if you’re heading for somewhere like Jersey or Guernsey, or other low income tax residencies, then you’ll need more specialist advice such as using a qualified tax advisor or an accountant who knows how to handle expat tax matters.
We will soon be launching a series of Expat Guides to Money for people looking for information about Investments, Retirement Planning, Savings, QROPS, FOREX and Tax to name a few. Our expert writers and researches have been compiiling information from around the globe, so that you have a one-stop-shop for all the information you need. As soon as the guides are available we will let you know. So make sure you sign up to our email newsletter.