Among the copious aspects of moving abroad that one needs to consider, planning and managing finances is a a particular detail that people too often miss and push to the back of their minds. With this plan of action, there is no need to sift through the unnecessary and drab components that make up finance; so, get out your notebooks, pens and read on, with the utmost enthusiasm…
Step 1: Before you go
In the ideal circumstances, you will have 4-6 months notice prior to moving abroad, giving you a sufficient amount of time to organise everything carefully. If possible, paying off debt including personal loans and credit cards is beneficial as this will reduce the risk of currency fluctuations that can increase the cost of debts. Keeping your UK bank accounts is worthwhile as these can give you a letter of reference prior to emigration that will help you rent accommodation in your destination.
Step 2: Current accounts
Finding and opening an account with an international bank can help you in a number of ways. Allowing you to bank in different currencies means that an international bank account can be useful if you have on-going commitments back at home such as a mortgage or child at university. If you have a pension in the UK or any other incomes, these can also easily be transferred between accounts at no extra fee. It is important to set up an account as far in advance as possible so that it is ready and at your disposal when you arrive in your destination.
Step 3: Taxes
The dreaded part. Not to worry; to avoid complications with your tax status and paying tax twice for each country of residence, the UK had ‘double tax agreements’ to show which jurisdiction has the taxing rights on a particular profit or source of income. Double tax agreements exist for many of the most popular places to emigrate to such as Australia, Canada, France, Italy, New Zealand, Spain and United States of America. However, some destinations such as the Channel Islands and Antigua are slightly more challenging and possess more comprehensive tax systems. In order to find your best options, contact your bank prior to emigrating to ensure they know you are moving abroad and consult a qualified tax advisor who is experienced in expat tax matters.
Step 4: Currency
One thing that you must consider when moving abroad is the effect currency fluctuations will have on your money. By transferring your money in to the account you will need it in the long-term for the majority of outgoing payments, you will avoid the risk of excess from increased rates. If you plan to move to another country permanently and have paid off all your sterling liabilities, then consider moving your money in its entirety into your new local currency.
Step 5: Savings and investments
International savings accounts are available in most jurisdictions allowing you to benefit from conducting your relationship with the bank in english no matter where you are. Job prospects and accumulating money faster may be some of the reasons you are moving abroad and you may want to consider investing to ensure you make the most of it. There are a great number of investment opportunities available internationally which again, a lot of international banks offer overcoming the language barrier when coming face to face with problems such as tax liabilities. These can also be discussed with a financial advisor specialising in expat finance and investment.
These steps should get you off to a good start but if you have any other concerns or matters to consider, try finding a solution on britishexpats.com which features a great number of articles tailored for various expat situations.