If you’re thinking about moving abroad you’ll probably repeatedly read about the fact that you need to get your money matters in order before you go. The most responsible sources will advise you to ensure that you have the means to afford your relocation abroad, and that you’re aware of the cost of living overseas for example.
You will most likely read that further consideration should be given to your realistic salary expectations abroad – or whether your current pension income will be enough to buy you the lifestyle you’re seeking perhaps. However, confusingly you’re also likely to come across advice that tells you that expatriates have a very real financial edge over their peers back in Blighty, and that you won’t be able to access these potential advantages until you relocate.
This is seemingly contradictory advice. So, we’re here to clarify your main financial dilemmas ahead of any move you make overseas…because the fact of the matter is, you do have to get some of your money matters in order before you move, and some straightened out after you relocate. We will explain what to do as well as how and why!
Sorting Out Your Financial Affairs Before You Move Abroad
As stated, some aspects of your financial status have to be closely considered before you move abroad, if you want to ensure that your transition is a smooth one with as little stress as possible!
The lengths you go to can be as in depth or as superficial as you personally feel necessary. However, base considerations are as follows: -
- You will need the cash to hand to pay for the likes of plane tickets, removal costs, short-term accommodation abroad and any other essentials from groceries to temporary car hire
- You will need to have a general idea of the average cost of living you can expect to encounter in your new nation…
- Coupled with this you will need to have considered how you are going to earn enough money to pay for your lifestyle. This may mean you look at the employment landscape and realistic salary expectations, or you review your pension or income returning assets to ensure they can pay your way abroad
It will be up to you whether you take your planning beyond this level of consideration, and one other aspect you may like to think about is your international banking options. I.e., you may like to open an international bank account before you relocate to ensure you have the solution in place to help you manage your money from anywhere in the world.
Finally, there is one other aspect of your money’s management that you really must cover before you relocate, and that relates to taxation…
I.e., you will need to inform the taxman of your intention to move to live abroad permanently. Fortunately, as with all things HMRC, there’s a form you can fill in. All information about which form you complete and when to submit it can be found online at Revenue and Customs’ centre for non-residency.
Sorting Out Your Financial Affairs After You’ve Become an Expat
Once you’ve relocated and you’ve completed the relevant HMRC form to tell the taxman that you’re non-resident in the UK for income tax purposes, and once you’ve established your residency abroad in your new nation, potentially a whole new world of financial opportunity opens itself up to you.
I say ‘potentially’ because everything depends on you – your country of residency for tax purposes for example, the way that country taxes you, your attitude to risk, how much money you have to save and invest, what you want to achieve with that money, how long you intend to remain abroad, your age and so on.
So, depending on all of these aspects and circumstances, there are very real ways for some people to save taxation by utilising different savings policies or investment solutions that are only available to those who are no longer tax-resident in the UK for example.
There are also ways you can potentially diversify how your money is invested and saved – now that you’re living abroad you can theoretically have access to different currencies and different underlying assets to invest in. You can invest in different nations and with different fund managers too if you want to. All of this adds up to opportunity…
But it’s opportunity you have to discuss and consider with an understanding of your own personal circumstances and objectives in mind. We would strongly suggest that if you’re not sure of all the options open to you, and all the risks you need to consider, that you take the time to speak to a regulated independent financial adviser. I.e., an adviser who is qualified to give you advice in the nation in which you live, and once who not only understand expats, but who has access to the entire international financial marketplace.
In Conclusion…
As you can see, the seemingly contradictory advice that you’re likely to read about before you move abroad, that tells you to sort your money matters before you move and after you’ve expatriated, isn’t contradictory after all. It’s a fact that there are elements of your money’s management that you have to consider before you relocate, and elements that you cannot consider until you have moved.
Remember, if in doubt seek regulated and qualified independent financial advice…and remember to let HM Revenue and Customs know when you move abroad so that you’re not taxed incorrectly.