If you’re about to move abroad or you have only recently become an expatriate, you are in absolutely the best position possible for arranging your financial affairs correctly and most advantageously from the outset. Having said that, if you’ve picked up this guide after many years of living the expat life, that’s not to say that it is of no benefit to you and that it is too late to get your finances in order. The point is, the sooner you begin planning each element of your financial wellbeing and development, the sooner you will be making the very most of the opportunities available to you now that you have left your country of domicile behind.
Your Tax Status
When you leave the UK you need to inform the British tax authorities, namely HMRC, of your changing status. You should complete form P85 that, according to HM Revenue and Customs, “helps us decide how you should be treated for UK tax purposes after you leave.” If you would like a copy of the form to complete, please email us by clicking on link below or by using the contact form on page three and at the back of this guide and we’ll be happy to supply you with one.
For some people, the completion of the form can result in a tax rebate because the Revenue actually works out your annual income tax obligations over a one-year period, and so if you’ve paid too much tax in the months of the current tax year before your departure, HMRC will eventually return the overpayment to you. More importantly however, the purpose of the form is getting you on the right road to being able to claim non-resident tax status in the UK, at which point your status can deliver those often discussed expatriate tax advantages.
Once you arrive in your new nation of residence you will be under a certain obligation to formalise your presence with the new local tax authorities. You may find your employer does this for you, or you may prefer to enlist the services of an accountant or financial advisor to register your details.
Preparation is the Key
“Failure to prepare is preparing to fail” – John Robert Wooden
Other financially related aspects of your move abroad will include the following: –
- Literally getting your house in order – i.e., determining the best course of action for the management or sale of any UK based property assets.
- Arranging the removal of your personal and household effects abroad.
- Preparing pets for relocation
- Arranging your travel and accommodation
- Sorting out travel insurance and at least short-term health cover.
- Potentially arranging for any UK based pension income to be payable to you abroad, or even moving your existing UK pension offshore, which can have massive benefits if you intend to be overseas for 5 years or already have been overseas for 5 or more years.
Those who put significant effort into the planning and preparation of their move reap dividends when their transition abroad is a smooth and financially successful one.