Moving abroad? Check your finances before it’s too late

Moving your finances abroad is stressful, and many expats forget to ask the most important question: what do I need to do before I move and what can be done later?

Our checklist helps you identify urgent actions–and will save you money, time and hassle in the long run.

Taxes & Property

Tax rules are country-specific and generally quite complex for a lay-person, so your tax status is something that is best sorted out before you leave to avoid nasty surprises.

• Notify the tax office that you are leaving the country (in the UK by filling in a form P85).

• Check if you have to pay capital gains tax from your new country. The country you are moving to will determine how much tax you must pay. Capital gains tax is levied against the money you make selling assets in your home country, such as stocks, bonds and property.

• Decide whether to sell or rent your property. An immediate sale is free of capital gains tax in the UK (if it’s your main property), but a later sale may be subject to taxes payable abroad. If you rent, this will be taken into account by the tax office when deciding your residence status. The more ties you keep to the UK, the more likely you are to be considered a UK resident. This is not ideal if you are moving abroad for tax purposes, as you need to cut ties in order to maintain a non-resident status.

• Get an estimate of your state pension and advice regarding off-shore banking if you’re retiring abroad. Some of the top retirement destinations for Brits, such as Australia and Canada, don’t have reciprocal agreements with the UK and therefore your state pension is frozen when you leave the UK. Offshore banking could be an option to protect you if your pension is frozen, giving you greater stability and lower taxes on your assets.

• Inform your mortgage lender and property insurance company you are moving abroad if you intend to keep your property empty or rented. Your premiums may change when you rent or the property is left empty.

• Get advice from a tax expert, ideally one who has experience with expatriates. She will be able to advise you on when to file your taxes and what the consequences may be of moving abroad in terms of tax.

Banking

If you are planning on moving abroad for any length of time you need to make sure your money is accessible from another country.

• Close unused bank accounts and dispose of unnecessary investments. This helps sever ties with your country, which is essential if you wish to become non-resident for tax purposes.

• Tell your bank you’ll be using your card abroad. If they notice unusual activity on your account without notice they might block your cards to protect your from potential fraud.

• Set up internet banking, and if you think you might have limited internet connectivity or security, organise telephone banking.

• Tidy up any standing orders, direct debits and payments for out-standing utilities.

• Arrange for a trusted friend or family member to make decisions and deal with the authorities on your behalf. You might want to consider giving them partial power of attorney while you are abroad.

• Check credit card and banking charges before you go. You might want to consider moving banks or opening another account depending on your situation.

• Get a credit reference from your bank or credit card company. This may help you arrange credit in your new country.

Health

If your company doesn’t provide health insurance for you, it is something best organised before you leave. You may be eligible for local coverage, but in most cases you have to be a resident in the country for a minimum of three months.

• Shop around to find the best plan for you and your family. There are many well-established companies that deal exclusively with expats.

• Use an insurance broker if the options seem too baffling; be sure to check how much commission they charge (in the UK, brokers have to tell you their commission rate, this does not apply in other EU countries).

• Check details such as how quickly bills are settled, the level of service provided and whether maternity and dentistry cover is included.

• Find out about welfare rights abroad. Some benefits are only payable in the UK and some can be paid in the EU. Check before you leave if you will still be eligible.

Taking the steps to move abroad is daunting. Ensuring your financial affairs are in order before you leave will help make the transition smoother and give you more time to focus on making new friends and absorbing local culture.