The decision to move overseas is something that for some of our clients was a necessity as it was a requirement of their job. In some cases it was something that they had always wanted to do, or in others, something that came quite unexpectedly. But it is definitely something that should never be taken lightly, and many people, when faced with the prospect of a new life abroad, can often jump in with two feet without considering the reality of what life overseas might be like.
We have spoken to many clients over the years and have listened to their stories. So here at Churchill and Partners we thought we would put together a short guide to help those faced with the prospect of moving abroad - giving advice about what to do before you leave, what things you need to research and the essential things you will need to do before packing up and moving away to another country. Planning your new expat life is a major task, so we hope this article will help you. You will find links to other advice, or news articles, posted on our site too. We will be adding to our blog – providing advice about choosing the right school for your child, financial matters and other important information. Remember to follow us on Twitter and Facebook, or sign up to our newsletter here to find out about other information just for expats.
What will your financial situation look like?
The cost of living in the country you are considering moving to is very unlikely to be exactly the same as where you live now.
One important thing you should do when considering your finances is to research what you will be expected to pay to maintain your current standard of living.
It is a good idea to make a list of all your current costs, both fixed and variable, and then take time and effort to research how these may vary between what you pay now and what you will pay when you move overseas.
Will you pay the same amount for your gas and electricity, or will a change in climate have an impact on this? Will health care cost you the same? How much will it cost to simply get to work in the morning? Consider what it may cost you to eat out, buy food, join a health club and insure your belongings.
When relocating with work you should always try to ensure that you achieve some type of package from your employer that will allow you to maintain your standard of living - or better still, compensate you for the massive changes that you and your family will have to undertake.
When negotiating with your employer, your package will most probably include a cost of living allowance (COLA), which is based upon the need to ensure that the lifestyle that you enjoy in your home country can be retained - so do your research and establish if the allowance they are suggesting will, in fact, enable you to do this.
A move to a city that has a higher cost of living should be accompanied by a relatively higher salary. For this reason, the COLA allowance will be an important part of any contract negotiation process.
Other financial matters to consider
Once you make the decision to move, if you are a UK resident, you will need to notify the tax authorities (i.e. HMRC) in the UK that you are planning to leave. If you don't do this, you may have to pay additional taxes which, as an expat, you are exempt from.
Make sure you get your P85 form from Revenue and Customs, fill it in and return it. This simply notifies the tax authorities that you are leaving the country and helps ensure that you'll be taxed appropriately.
If you will be paying tax abroad but will continue to receive interest income from savings in the UK, you will need to fill out form R105 from HMRC and send it to the financial institutions where your savings are held. This form requests that tax is not applied in future because your income will be taxed in your new country instead.
Also, once you live outside of the UK, you may still be liable for tax in the UK. Therefore, you may still have to complete a tax return.
You also need to remember that if you are keeping property in the UK, any future sales as an expat may still incur Capital Gains Tax, as well as income tax on rentals. You may wish to reconsider your options if you are about to move.
Some of our clients end up selling their homes, others rent them out, but whatever you choose to do you must remember each country has its own tax rules, some specific for expats. There may be fines or imprisonment if you do not adhere to local rules - it isn't worth risking, as it is often as simple as making a declaration on your assets.
As always, we can provide you with sound financial advice by understanding your requirements and can help ensure you don't meet with costly complications.
Have you thought about bank accounts? With current currency fluctuations and transaction fees, it can mean that if you earn or spend money, you could be paying unnecessarily. Opening an international bank account which is specifically designed to assist with the movement of money is a good idea. You will need to establish in what currency you will be paid, and what currency you will pay for goods and services as this will have an impact on your finances too.
Pensions and retirement
What will happen to your current pension should you decide to move? You should consider speaking to a specialist financial advisor for independent advice. At Churchill and Partners we will be able to advise you about this, as there are many ways in which you can benefit as an expat living and working abroad. For retirement planning you may want to consider QROPS, which is a pension transfer mechanism used by expats leaving the UK to live and work abroad - you can find more details on that on our QROPS and QNUPS page.
What will life really be like once you have settled in?
Obviously, there is a huge difference between going somewhere on holiday and actually living there. We know it goes without saying that they are two very different realities.
One thing our clients have certainly told us over the years is that at times the grass is not always greener. For most of our clients this is temporary, and the positives far outweigh the downsides, but it is important to realise that moving to a new location can be very difficult for you and your family, until they settle in.
It is really important that you truly understand what your life, and that of your children/family will be like in your new country. Our clients tell us that the best way to do this is to try and visit for a 2 to 3 week period in order to sample the day-to-day lifestyle on offer.
Some of our clients lived with colleagues who were already located in the country, spent time with families like their own and talked to other expats who could tell them the truth about relocating. If you don't know anyone who is currently located in the country to which you are about to move, why not email us and we might be able to help make an introduction.
Another idea is to rent a serviced or self-catered apartment and try and live life in the same way you would do when you eventually live there—shop in the local supermarkets, take public transport, live off the sort of budget you will have when you live there for real and try and explore the country or city from the point of view as a local, as opposed to a tourist.
Consider how you will find living in a country where you may not speak the language. In some South American countries, expats tell us that locals do not speak English at all, and will not attempt to talk to you in your language, so you will need to be prepared for this. In European countries however, you are more likely to be able to live without speaking the language.
Check out the dos and don’ts of the country you are moving to, seek advice from others you know already living there and be prepared to make changes to your lifestyle and embrace your new country and culture, are all things our clients have told us. One of our clients said ‘You need to not think of yourself as a Brit abroad! You need to try to become a little Spanish, enjoy growing as a person as you learn to live like the people in the country you have chosen, hold on to the things that make you proud to be British, but adapt them. Being an expat abroad is about learning to adapt’.
One thing we have learned is that our clients have had huge amounts of patience. They have not been put off by the times they have found it frustrating but embraced their new life. Graham Noble, Managing Partner, with years of experience dealing in expat finances, said ‘Without a doubt, those clients who had prepared well for the relocation, were the ones who settled in the quickest and were very positive about their decision to move’.
Have you researched all the education and healthcare facilities available to you?
The top priority when you are relocating anywhere should be your health and wellbeing - and that of your family.
Part of your negotiations, if you are moving with work, should be the question of whether the medical and educational facilities on offer will meet your needs and the costs that result.
Some of our clients work for companies that ensure family members' education is paid for, as a perk to relocation, in British schools abroad. For others, this has not been the case. If you are not relocating with work as part of a deal, then it is essential that you consider some of the following:
- What is the availability of suitable medical facilities and the location of these in relation to where you are planning to live? Will you be living in a place that will be able to provide your family with appropriate care? The cost of healthcare, how the healthcare system works and the insurance that will be required in your country of choice and any limitations to that insurance that may impact on your specific health needs.
- The quality of education on offer and the cost of this education where relevant. Will there be appropriate schooling near to where you have chosen to live? Often British schools can be found where there are larger numbers of expats, but it doesn’t always mean these have spaces, or are appropriate to your child’s ability. Some have specific requirements to secure a place too. Make sure you research the school system. What will happen when your child gets to specific ages? In some countries huge choices need to be made, at a far younger age than in others. See our article about the Swiss education system and details about how it works. How does the local school system work? How does childcare work if you have younger children?
What other things do you need to consider?
There are also some other things you need to consider before making the decision to move. Our clients told us a few that they mistakenly forgot about:
What about your pets? If you have a pet and would like to take it with you, you will need to get your pet micro-chipped by your vet. Then you will need to have your pet immunised against rabies - at least 21 days before you are due to travel. Very often, depending on your destination, you will need to seek the help from a professional animal transportation company who can give you the practical advice for transferring your pet.
Driving and getting around -If you want or need to drive while in your new country of residence, ensure you know the local driving laws and regulations. There can be many customs and laws which you need to be aware of, not least the driving licence requirements. Outside of Europe, you need to request an International Driving Permit, an annual permit which is recognised internationally, and normally allows the holder to drive a car or other motor vehicle when accompanied with a valid driving licence. It is important that you check with your new country of residence before you travel as you may need to apply for a local driving licence as well.
Registering to vote – If you decide to move to another country, you still have an important role to play in your home country's voting system. Government policy will still affect you via taxation, immigration policy and foreign affairs. You will need to find out how you are able to continue to vote once you move abroad. You may have to register before you leave. Each country has different rules, so it is important to check.
A new life overseas can be a huge amount of fun, and we have many clients who have left what is familiar and comfortable to brave the unknown and different.
From our experience, really doing your homework by researching your chosen country, considering lifestyle changes, family commitments and day to day living, gives you a positive head start should you take the plunge and move your life to another country.
And of course taking sound financial advice both before and after you leave is something you need to look into so that you can maximise your opportunities and plan your financial future in the best way possible. Contact us here to find out more.