UK expats have been warned against conducting the bulk of their banking in England, and urged to bank instead in their new country of residence.
Finance expert David Howell has stated the importance of utilising offshore facilities, and highlighted tax planning, pensions, savings and health insurance as the key areas that expats must focus on when they move overseas.
He also noted that setting up a current account in the new country is “crucial” so that expats can avoid large charges on currency transactions. One of the advantages of offshore banking is the freedom to bank in multiple currencies of your choice, a feature almost all offshore banksoffer.
Howell said: “Choosing to leave your money at home in the UK is an expensive option as bank charges on currency transactions are high and you may well be charged by both your UK bank and the foreign bank too. Whatever the currency risk, setting up a current account in your new country is key for making domestic payments”.
He also mentioned some other areas expats need to consider when planning for their new financial situation, such as existing properties back home: “You will also need to decide whether to sell or rent your property – an immediate sale is free of capital gains tax in the UK if it is your main property but could become subject to taxes payable abroad if sold at a later date.”
The importance of retirement planning was also stressed, with QROPS pension transfernoted as the ideal option for UK expatriates.
Finally, Howell also spoke about medical insurance an area expats have been known to overlook: “For expats, the need to be covered for potential illness or injury is even more critical. When you’re living in a foreign country you may not have easy access to good quality medical care and even if you can, you run the risk of a hefty medical bill at the end of it.”
If you are interested in discussing your expatriate financial matters with a recommended adviser, visit the Contact an IFAtoday.