Are you looking for a place in the sun? Put your money in order before going abroad
As we reflect on the prospect of traveling again, some people may be looking for something in the long term. After being embarrassed by the lockdown, it won’t be surprising that a taste for adventure leads people to consider living abroad. Add to that the increased number of jobs available to be done remotely, and you’ve got a cocktail for an expat boom.
But jumping to another country is not always easy. If you are planning on doing that, add these five money-related tasks to your to-do list.
1. Determine your tax status
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Usually, if you stay in a country for more than six months, you may be taxed abroad, although this may vary from country to country. “The two key things to consider are residence and domicile,” says Daniel Hogan, co-founder of accounting automation company Ember. “If a person leaves the UK they may cease to be a UK resident, but they are unlikely to cease to be domiciled in the UK.”
He explains that residence is determined each tax year by a step-by-step Statutory Residence Test (SRT) for individuals. “If you’re moving in the middle of a tax year, the SRT offers the option of ‘split-year processing’ in some cases,” Hogan explains.
“As a result, the person will be taxed as a UK resident for the time they were in the country and then taxed as a non-resident for the remainder of the year. There are three main cases where split treatment occurs: if someone starts working full time abroad; if he is the partner of a person who starts working full time abroad; or if they no longer have a domicile in the United Kingdom.
Britain has “double taxation treaties” in place with several countries, which should ensure that you only have to pay tax on your income once. If you are still unsure of your status even after checking the government website, you can seek advice from Her Majesty’s Revenue and Customs (HMRC).
2. Consider opening a local bank account
Sarah Holt of the Monese Money Transfer Group says: “When it comes to doing banking in another country, it really depends on your situation.
“Is your move permanent or temporary?” In what currency will you be paid? Do you have assets at home? Keeping your home bank account open is a smart move, as reopening a closed account can be a difficult process. “
But there is probably an advantage to having a local currency account if you are paid in anything other than Pound Sterling, due to currency fluctuations. Essentially, you want to make sure that the money you earn in the country where you live will go into your lifestyle there, without being eroded by exchange rates.
Be sure to check what your current account provider offers. “Depending on who you do your banking with, it is possible to get a multiple currency account with your UK bank, such as Revolut or Wise,” Hogan explains.
Unfortunately, many high profile lenders have reduced their offers for those moving to the EU, as the ‘passport’ deal between the banks ended with the end of the Brexit transition period earlier this year.
This means that, rather than complying with a set of rules, banks need to align with the regulations of each country in which they wish to operate – and some have decided that it is not worth it, especially if they are. have few customers in a particular destination. Some Britons living abroad have even been told that their national bank accounts have been closed.
If you do decide to get a local account, be aware of the administrative hurdles this can present. “Opening a local account can be difficult because banks often require you to prove that you are a local resident, which can be difficult if you have just moved,” says Inez Cooper, the founder of international insurer William Russell. “Consider opening an expat bank account, specialized for professionals living internationally, offered by many banks. “
3. Look at savings and investments
If you open an Individual Savings Account (Isa) for cash or stocks in the UK and then move abroad, you cannot put any money into it after the tax year when you move (unless you are a Crown employee working overseas or or civil partner). You can still keep the Isa open and continue to receive UK tax relief, but you must notify your provider that you are moving. It may therefore be interesting to think about maximizing your Isa allowance before your departure.
4. Sort health care
“After Brexit, traveling between the UK and the EU won’t be as easy as it used to be,” Cooper said. “Healthcare is a particularly important factor to take into account, because if you move to the EU after the transition period, you will not be entitled to healthcare provided by the state.
“So you can consider the benefits of international health insurance. “
Most people are familiar with travel insurance which covers potential health bills if something happens to you abroad. International health insurance covers longer periods and is available from various providers. However, before purchasing a policy, it is worth checking whether your employer can help you with health care or if your partner’s insurance can cover you as well.
You can also apply for a UK Global Health Insurance Card (GHIC), which will cover you when traveling within the EU. It replaces the old European Health Insurance Card (EHIC). Unlike the EHIC, the GHIC does not apply in Norway, Iceland, Liechtenstein or Switzerland. However, it is possible that new countries will be added to the program.
Tom Wilkinson, CEO of AXA Global Healthcare, advises anyone who knows they may need medical attention to do extensive research first. He says, “The key to being prepared for overseas healthcare costs – especially if you have a pre-existing condition – is to make sure you have a good understanding of the services and facilities available in your new home country. origin.
“The standard and cost of healthcare will vary across the world, so it’s understandable that many expats are concerned about the cost of medical treatment.
“It is important to prepare for the different circumstances you may encounter and to know if certain treatments are difficult to find or particularly expensive.”
5. Find out how to send money home
Several financial services companies offer international money transfers at a lower cost. Use a comparison website to assess the best rates, and consider setting up an account with one or two of the vendors who seem to serve you well. Most are free, but may incur additional charges for things like ordering a physical debit card.
“Look for accounts that allow you to hold pounds sterling and euros, and which can be opened in the UK before you leave,” advises Monese’s Holton. “These accounts should allow you to send and receive payments in euros in the countries of the Single Euro Payments Area (Sepa). They include all EU countries as well as Iceland, Norway, Liechtenstein, Switzerland, San Marino, Monaco, Andorra, Vatican City and the United Kingdom.
“The advantage is that you can make and receive payments in euros without having to open multiple accounts and keep your connection to the UK. “
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