Planning a move abroad?

3rd July 2020

Planning a move abroad?

Undertaking what is required takes a great deal of thoughtful consideration You’ve always dreamed about living aboard, but how do you make that a reality? The first practical step is to think about where you are in your life and weigh up which options are available to you. Factors like your age, financial situation and skill set will come into play as you consider where to explore long term. More open borders and the need to find work in the wake of the financial crash mean more people live outside the country they were born in than ever before.

An estimated 6 million British people live permanently abroad, almost one in 10 of the UK population[1]. If you’re thinking about moving abroad, it’s important to know how your pension and any benefits you receive will be affected and how you will access healthcare and other services. Already currently living abroad Six out of 10 Britons who are already currently living abroad have vowed never to permanently move back to the UK[2]. The survey findings show that 62% said that they would never relocate back to Britain, 11% said they would consider it, while 27% said ‘maybe.’ Despite the majority of respondents saying they would not consider returning to Britain, 70% still regularly send money back to the UK and 81% were able to save more in their overseas location. Financial links with Britain The survey also shows that 44% relocated from the UK primarily for work or career reasons and 70% haven’t severed all financial links with Britain. It will surprise many observers that despite the global coronavirus (COVID-19 ) pandemic and rising economic, political and social tensions in many countries around the world, for many the ‘pull’ factors of overseas living far outweigh those of the UK. Rewarding and fulfilling experience Indeed, the UK’s ‘push’ factors, such as fears over a no-deal Brexit, political issues, the cost of living, high taxes, low interest rates, a weak pound, the scrapping of some age-related benefits, quality of lifestyle, crime concerns and the weather, have encouraged people to relocate. Millions of Britons living abroad, according to the survey, say it is a positive, rewarding and fulfilling experience for many reasons. These include more lucrative career opportunities, lower cost of living, higher quality of life, high-quality childcare and education, lower crime levels and good weather. Financial planning considerations if you are planning to move abroad Cross-border tax planning Investment structures and trusts Currency of investments Pension arrangements, including your options for transferring Planning your legacy for your heirs Moving your pension pot abroad If you live abroad, or plan on retiring abroad and have a defined contribution pension in the UK, you can either leave your pot in the UK and take your money from abroad or move your pension pot abroad, or mix these options. If you leave your pension pot in the UK and take your pension from abroad you have the same UK pension options. Alternatively it may be possible to move your pension abroad. You need to make sure you transfer the money into a qualifying recognised overseas pensions scheme or there’ll be a tax charge. These schemes meet the same standards as those in the UK. Tax in the country where you’re resident Transferring your pension could change the amount you get when you retire and you could have less choice about what you can do with your pension pot than if you left it in the UK. You may also have to pay more charges. You might have to pay UK tax on your pension when taking your pension abroad and potentially have to pay tax in the country where you’re resident. If that country has a double taxation agreement with the UK, you might not have to be taxed twice in the UK and abroad. You can also receive your State Pension abroad if you qualify. Utilise the tax-efficient opportunities available If you are planning to retire abroad you must inform HM Revenue & Customs so that you pay the right tax on your pension. Moving abroad before you start taking your pension may mean that overseas tax laws prevent you from taking anything tax-free. It’s important not to wait until you are a resident in the new country before seeking tax planning advice. Leaving it too late can eliminate some of the most tax-efficient opportunities available. Source data: [1] http://news.bbc.co.uk/1/shared/spl/hi/in_depth/brits_abroad/html/default.stm [2] The deVere Group – 754 respondents residing in Australia, New Zealand, the UAE, Oman, the Philippines, Thailand, Indonesia, China, Hong Kong, Italy, Switzerland, Spain, France, Portugal, Hungary, Germany, Mexico, Russia and Zimbabwe – 26 May 2020

Related Articles

Making a Will during COVID-19

Thinking about how well we are prepared for our futures As coronavirus (COVID-19) leaves many of us working from home surrounded by our families and loved ones, it is inevitable that we start to think about how well we are prepared for our futures.

Read more

'Future self'

Boosting future retirement savings Young people are faced with a unique set of challenges when it comes to saving for retirement. One of these is perception. They can often think of their ‘future self’ as a different person and so may prefer holding on to their income for more immediate priorities, like a first home deposit, rather than saving for someone they perceive as a stranger.

Read more

State Pension age rises

How could the change impact on your retirement plans? For the first time in over a decade, the point at which people can claim a State Pension (the ‘State Pension Age’) is simple. If you have reached your 66th birthday, you can claim it. Otherwise you cannot.

Read more