If you’re about to jump on a plane and start a new life as an expat in a new country, here are three key financial planning tips you need to consider before you go.
Understanding what to expect in the way of taxes, hidden costs and a foreign financial culture will soften the blow of integrating your new life with a new job and lifestyle.
Having home thoughts from abroad is one thing, but stressing over finances while coping with a major life change is not advisable.
So here are the three vital factors to consider:
Tax is taxing wherever you live and thinking it’s not is a mistake. Not only do you have to consider tax status in the country you have left, you also have to consider what it is in the country you now reside in
If in doubt, take professional advice – the consequences of overlooking key filing dates or tax returns can be costly.
You need to think about the tax you pay on income, savings and investments in Britain, if you have assets still here and abroad.
Inheritance tax is a big issue – it’s often not based on where you live but the tax rules of the country where you were born.
Hidden costs include housing costs, legal fees, local taxes and the forever spiralling charges for education, medical expenses and life cover.
The idea of becoming an expat is to improve the lifestyle you had at home, so look at how much money you will need and whether some of the costs are covered in your benefits package.
Don’t forget back-home costs aw well – if you are renting out your home, it’s unlikely to be occupied all the time,so the mortgage will need covering and odd repairs are bound to arise.
Beware of inheritance tax and make a will, bearing in mind you may need to make a will in Britain and another in the country where you live if tax and estate planning laws conflict.
Think about medical costs and paying the bills if you are too ill to work, as your new home is unlikely to have the benefits of the UK’s national health service and social security.
Check you life insurance – standard UK policies are usually void if you live overseas.