Updated: May 22, 2019
Remember all of the stresses of moving abroad for the first time? When you move back to your home country, you will have to put some of the things you did before you moved in reverse. All of the same aspects will require your attention when you repatriate. Things like shipping companies, pet relocation, schooling, health facilities, and importantly all of the financial aspects, From a financial point of view be aware that moving back home can affect your tax situation, your savings and your investments. Here are some key areas to consider:
1. Savings and investments
Many expats will have accumulated savings whilst an expatriate. Others will have taken advantage of increased earnings and lower tax and will have accumulated wealth in the form of a lump sum. In some instances where investment savings are en-cashed after returning home there is likely to be a tax charge. So what to do with your assets?
British Nationals do not have to repatriate their assets should they return to the UK and may keep them overseas for as long as they wish. Be aware however that any growth or interest will be subject to UK tax. Remember that as soon as you take up employment in the UK or another country you will come to the attention of the tax –man! It is generally (but not in all cases) sensible to sell assets, which have risen in value significantly, with a view to crystallising the gains whilst you are still outside of the UK tax net. Care is needed though, as every case is different and you should seek tax advice in this area.
2. Closing and opening bank accounts
One area that repatriating expats find challenging when they return home is establishing a financial foothold once again. Especially If all ties with the home country have been severed it can be very difficult to arrange credit or a mortgage upon your return.
If you no longer have one, open a bank account before you move. If you closed your bank account when you moved abroad, you may no longer have a credit history, so it may be worth keeping an offshore account open until you arrange a new account back home.
Make sure you close down all credit cards and if you no longer need them bank accounts in the country you are leaving. Some accounts incur fees and it is often much harder to shut down accounts after you have left.
3. Medical insurance
Chances are your employer would have been providing you with medical cover for both you and your family, or you may have taken out medical insurance on your own. If you are repatriating back to a country that provides health care to residents you may no longer need this and so you should cancel the policy to avoid unnecessary expense.
You will need to re-register with a doctor and a dentist in the UK, though your eligibility may have changed. The NHS crack down on 'health toursits' coming to the UK to receive free healthcare means that unfortunately, expats may no longer be entitled to treatment on the NHS. Find out how this affects you and budget for potential cons
5. Make use of your new residency status
Certain UK taxes can be avoided if you or your partner are not of British descent or either of you have become ‘non-domiciled' for UK tax purposes. This route potentially allows you to shelter non-UK income and gains from tax, as well as keeping those assets outside of Inheritance Tax. However, it is important to get the planning right.
Many people have life insurance policies that they took out whilst non UK resident. Check that you will still be covered before you move back home. It may also be worth checking the parameters of the policy. For example you may have no intention of moving away from your home country again and therefore paying a larger premium for World- wide cover may not be necessary.
7. Making use of tax advantages
If you’re repatriating back to the UK make sure to make use of the many tax breaks that exist. Join the pension scheme of your employer or start a personal pension and benefit from tax relief. Consider too ISAs, and Income Tax and Capital Gains Tax allowances. All of these can all be used to reduce any potential annual tax bill. In addition, certain types of life assurance bonds can deliver a tax-favoured income in retirement.
8. Currency Exchange
If you've been earning in a different currency from your home country, and you're planning to repatriate some or all of your wealth, you will need to look into the foreign exchange solutions available to you. As a general rule of thumb it is the banks that usually have the highest fees and worst exchange rates. Using a high street bank may seem like the easy option, but using a specialist foreign exchange company is just as easy and usually works out much cheaper.
9. Seek advice
Before you make the big move try and make a list of all the expenses you will face, research your financial limitations and ensure that you have a big enough budget to tide you over during the settling in period.
Your tax situation will depend on your personal circumstances and it is always recommended that you obtain independent tax advice.