A place in the sun for enjoying retirement sounds a wonderful idea, but for many, this can turn into a financial and bureaucratic nightmare.
Upping sticks and becoming an expat sounds easy, but the reality is some considerable military-style planning is really required.
Out of the myriad of all the small things that need considering are the Big Eight:
- Tax residence – where you live decides your tax residence, which means you are subject to local income and capital gains taxes. Determine where this is early on so you pay the right taxes to the right authority from the start.
If you are leaving Britain, you also need to finalise your tax affairs with the HM Revenue & Customs (HMRC) before you go.
- Money matters – Don’t go without dealing with bank accounts, savings and pensions. If you become non-resident, any tax benefits you had relating to UK ISAs and pensions are lost if you are leaving permanently.
This is where you need advice from an experienced international IFA who can talk to you about Qualifying Recognised Overseas Pension Schemes (QROPS).
- House prices and rents – If you are moving solo, that’s without the help of an employer, it may be wise to rent rather than buy a home just to test the water and to establish exactly where you want to live
- Cost of living – There’s a vast difference between what the state pension and moderate savings will buy in Switzerland and Spain, so do some sums to make sure you won’t run out of money.
- Private health care – This is a vital component of your expat survival package. Some countries have excellent health facilities and others are way below par with the National Health Service.
The adage goes most people spend more on servicing their car than they do maintaining their health.
- Tackling officialdom – Tax is not the only red tape expats encounter. A welter of paperwork lies ahead from visas, residence and work permits to changing driving licences.
- International removals – If you are shifting your prized possessions, recruit a specialist removals service to handle packing, customs and shipping. They will know what you can and can’t shift across borders.
- Bringing the family out – Last but by no means least, if you have a family you need to plan for schooling, leisure activities and need to consider personal security.
After all that planning, most expats need some time to relax and unwind in their new home.