UK Expatriate: Taxation and Financial Planning

Summary: Without doubt there are many practical aspects of the whole transition abroad to carefully think about before you expatriate - from finding a job and a new home to actually determining which country best suits your career or lifestyle requirements - but get the monetary side of things in order first and you will find the rest a breeze! Here's our five step guide to taxation and financial planning for the UK expatriate.

Taxation and financial planning may not be high on the UK expatriate’s list of things to consider when planning a brand new life abroad - but actually, when done right, the whole financial aspect of expatriating can be the key to making the transition overseas a wholly successful venture.

Without doubt there are many practical aspects of the whole transition abroad to carefully think about before you expatriate - from finding a job and a new home to actually determining which country best suits your career or lifestyle requirements - but get the monetary side of things in order first and you will find the rest a breeze!  Here’s our five step guide to taxation and financial planning for the UK expatriate.

1) Insurance

In many countries private health insurance is mandatory - even in European countries like Germany and Austria for example you cannot gain access to professional health services other than emergency care without health insurance.  Find out about the requirements of the country you’re moving to and also take a look at specialist expatriate health insurance companies offering flexible policies for those who live abroad but maybe travel ‘back home’ or further afield regularly.

Household insurance will also be required - if you’re renting you’ll need contents only.  Don’t forget about travel insurance either - although some health insurance brokers will add this on to your health cover policy at a low additional cost.

One other insurance worth considering is a life insurance policy - particularly if you’re married and/or have children or other dependents.  Whatever insurances you determine are necessary, make sure you shop around, read the small print and remember that more expensive doesn’t necessarily mean better - when it comes to insurance make sure your personal requirements are covered - any additional but unwanted features will push up the price but not necessarily the value.

2) Taxation

Taxation regimes vary from country to country - some countries offer incentives to overseas workers, others offer rebates for those with more than one household to support which can benefit the expatriate living abroad and maintaining a family and home back in the UK for example.

Find out about your obligations in terms of making a tax return, calculating taxation owed and even paying various forms of taxation directly on income, gains, house purchase etc. 

When if comes to taxation, I’m afraid tax authorities seldom accept ignorance as a valid excuse for not making a payment due!

3) Banking

If you have financial obligations ‘back home’ from paying your Sky TV subscription to maintaining a mortgage and you also have brand new financial obligations now you’ve expatriated, you might like to consider establishing an offshore bank account to help you manage your money more easily from one centralized location.  Offshore banking services allow the expatriate to make payments in various currencies, make online international transactions, they sometimes pay a higher rate of interest and they always place the greatest emphasis on account flexibility - which can be a Godsend to someone who has recently relocated and is juggling various aspects of their new and old life at the same time.

4) Financial Health Check

It’s important to have a regular financial health check wherever in the world you live.  It’s essential you ensure your hard earned cash is working as hard for you as it can - when living abroad you may be lucky enough to benefit substantially from the far reaching advantages of the offshore world.  You should therefore have a financial review undertaken by an independent offshore financial advisor who can assess your eligibility for offshore savings, investments, banking and asset protection policies and structures, who can make sure you’re working with your money as best you can and that all investment policies you have match both your risk profile and your lifetime financial objectives.

Don’t just rely on local financial services or advisers either, because as an expatriate chances are one day you’ll chose to repatriate or expatriate elsewhere and what you establish locally may not be best for your future lifestyle objectives.

5) Money In The Bank

And last but by no means least - if it is at all possible work out how much you need to live on comfortably per month and then save up three times that amount into an easily accessible bank account before you expatriate. 

This will take off all the immediate pressure on you to find a job, open an offshore bank account, sort out your taxes etc., and it will allow you to relax into your new life abroad and ease into the new way of life as an expatriate smoothly.

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