Fed up with the whole Brexit back and forth and ready to start a new life on the other side of the globe, away from both the UK and Europe? Don’t blame you. But just remember, crucial to a successful long-haul emigration is efficient organising of your personal finances before you leave. Here are some pointers to set you on your way.
Don’t wait!
Preparation and timing is so important when making financial decisions before a move abroad. Ask any financial planner or international tax consultant and they will stress how much easier – and potentially how much more they could do for you – if you start talking to them a year or even 18 months in advance of your planned move. Depending on your personal situation and what form your assets are in currently, they may suggest some significant re-structuring to suit your future residency status – and this can take time and may only be possible up to a certain date. Trying to re-organise things after you’ve moved is a whole lot harder and can be more expensive.
Smart Currency’s free Currency Guide to Emigration gives you detailed information about safely sending your savings overseas and protecting your budget from the risk of changing exchange rates adding thousands onto your costs.
Your tax implications
An important step to emigration is removing yourself from the UK tax system in the most beneficial way available to you. A tax expert will be able to assess your position for the tax year of your departure and help you claim all of your UK allowances and any income tax refunds you might be entitled to. You are obliged to tell HMRC if you leave the UK to live abroad permanently, and similarly when you arrive in Australia, New Zealand, USA or Canada, you must become a tax resident there.
Make sure to plan your finances as early as possible.
Remember that any income earned in the UK should still be declared to HMRC. That said, one scheme that home-owners could benefit from is the Non-Resident Landlord Scheme, which exempts expats from paying UK income tax on rental income. If you qualify for this, it might make holding on to a UK property that you own more attractive than selling up and taking the capital with you overseas.
Pensions and investments
Emigrating is an opportune point in your life to sit down with a financial expert and assess all your investments and worldly assets. A key focus will be to review whether or not to transfer funds or investments offshore to take advantage of your expatriate status. This will include any private or personal pensions you have, which may work harder for you transferred into a QROPS (Qualifying Recognised Overseas Pension Scheme) rather then left in a UK plan.
Emigrating is an opportune point in your life to sit down with a financial expert and assess all your investments and worldly assets. A key focus will be to review whether or not to transfer funds or investments offshore to take advantage of your expatriate status.
Still on pensions, note that UK state pensions are frozen for expats in Australia, New Zealand and Canada. This is not the case in the USA, where British expats receive the same annual increases as UK residents.
Consider things like shares, bonds, premium bonds and ISAs, and what you should do with them. You can’t continue to pay into an ISA from overseas, but you can still keep it open and receive UK tax relief on the money held within it, in which case you may choose to keep an ISA open for long-term savings.
Inheritance
It’s not our favourite thing to talk about, but for the sake of your family give serious thought to inheritance and what you need to do leave your estate in order. The cornerstone of any estate planning is a valid will. Knowing your residency status and your country of domicile when you are overseas is important as it has an impact on any will you make and how it is executed. For British expats, much of what happens after your death depends on distinctions around your country of residence and your domicile – the best advice is to get professional advice.
If you are ready to invest abroad within the next few months, call our friendly Resource Team on 020 7898 0549 or email [email protected] for further advice and recommendations of trusted lawyers, estate agents, currency specialists, removals experts and more.
Transferring money
Moving abroad will mean you’ll need to transfer large amounts of money over to your new country of residence. It’s possible you may need to receive regular payments from the UK, such as your monthly pension.
Whether you’re off to Australia, New Zealand, Canada or the USA, you’ll need to open a bank account there, so that you can start receiving funds from the UK. Making transfers between the UK and your new account means you need to be aware of currency fluctuations, as swings in the exchange rate could have a big impact upon your move and going forward your income.
Before you emigrate, register with currency transfer specialist Smart Currency Exchange. Talk through your plans with them, and ask about different solutions for exchanging your pounds and transferring your foreign currency. They are experts and have helped thousands of people in your position. Equally important, in the months before you emigrate, check the exchange rate on a daily if not weekly basis. One of the best ways to do this is reading Smart Currency Exchange’s daily bulletins.