7 Things To Think About When Moving Back Home From Abroad
If you’ve been living overseas for some time, returning home can be a difficult process.
You probably encountered your fair share of obstacles when you moved away. Frustratingly, moving back home isn’t that much easier and can still see you swamped in paperwork, unexpected costs and taxes.
To make the transition go as smoothly as possible, it’s a good idea to get specialist financial advice.
In the meantime, here are seven things to think about when returning home from abroad.
1. What’s your resident status?
Your resident status dictates how easy the process will be. Non-residents only pay tax on their UK income, while residents pay UK tax on all their income. But there are separate rules for UK residents whose permanent home is abroad. Whether you’re a UK resident generally depends on how many days you spend in the UK in the tax year.
2. Managing property
If you own property overseas and you don’t want to rent it out, it’s a good idea to find an estate agent and put it up for sale sooner rather than later. Some people leave this process a little too late. Even if you live in a competitive market, selling the property could take longer than you expect.
If you own property in the UK and you plan to move into it when you return home, this may be something to start planning many months before you move. If you have tenants living in it, speak to them directly or talk to your letting agent about your plans.
Although property ownership is widely considered to be a wise investment, in some cases renting can be a better option. If you have no interest in owning UK property, you’re moving to a part of the UK you’ve unfamiliar with, or you want to wait until you’re back home before finding your dream house, renting can be a smart idea.
3. Reviewing your pensions
If a company pension was included in your relocation package, review the benefits and terms as soon as possible. The pension you’ll have contributed to overseas will usually be separate to the one you had back home — even if you’re with the same employer.
You might want to transfer your overseas pension pot to the UK, but keep in mind your nest egg may be affected by currency exchange fluctuations. In some cases, it can make sense to leave the funds in the overseas pension.
Don’t forget to check your national insurance records to see how much state pension you’re eligible for. If you haven’t paid enough to get the full state pension, consider paying voluntary contributions for previous years.
4. Reviewing your investments
You might have accrued a range of investments that are more suited to non-UK residents. It’s therefore vital that you review your investments to make sure they’re structured efficiently for UK tax residence. Checking any early-exit penalties if you decide to sell your overseas investments is a good idea too.
5. Reviewing your income
Depending on how long you’ve been away, any income (including gains from the disposal of assets) that you bring into the UK could be subject to UK income and capital gains tax rules.
It’s therefore a good idea to review your assets before moving. There may be financial products and tax wrappers that would be better used abroad for example.
An additional area to consider is the cost of living in your home country and how that compares with the country that you’ve been living in. You’re probably aware that costs have gone up considerably in a number of countries this year, but where they’ve increased might differ from country to country, so it’s worth looking at this in advance.
6. Update your insurance
Have you taken out any insurance policies while you’ve been overseas? If so, make a note of them all along with their terms and renewal dates. Some may be completely invalid when you move back to the UK. Avoid wasting money on unnecessary policies by cancelling them before they overrun.
7. Managing your bank accounts
It can be a good idea to close any overseas bank accounts before you move back to the UK. This can help you avoid any bank charges and keep all your finances neat and tidy.
If this sounds a little daunting, don’t worry. A financial adviser with experience helping expats move back to the UK will minimise your tax bill, manage the sale of your assets, and help you avoid falling foul of complicated laws and legislation.
There are countless advisers to choose from, but only a fraction are experienced and qualified enough to help international clients.
Not only do you need a financial planner who understands the complexities that expats face, you need one with experience helping people to navigate legislation from around the world.
Forth Capital is a leading financial planning and pensions advisory company. We specialise in helping expats around the globe manage their investments and grow their wealth.
Our advice is impartial and tailored to your individual circumstances. It’s our goal to help you make the most of your money and live the life you want, whether you’re moving overseas or planning your return home.
For professional advice tailored to you, contact us today or call us on +44 (0)131 6000 625.