Recognising the signs of impending expat financial disaster

Published:  16 Jan at 6 PM
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Put simply, living abroad may be great for health, social life and a comfortable retirement, but it’s a minefield as regards financial pitfalls, even if expats manage to avoid the menacing packs of commission-hungry salesmen peddling too-good-to-be-true returns.

More often than not, the reason behind failed expats’ return to their country of origin is financial disaster. Learning to recognise the warning signs in time to sidestep almost inevitable disasters is the only way to ensure your new life continues as you’d planned.

The most important change you’ll have to make comes with the realisation that managing your money in the same way as in the home country doesn’t work. Continuing along the same paths and expecting a totally different outcome in an unfamiliar country is sheer lunacy.

Keeping informed by means of internet expat forums and international financial news sites is essential, as tax law and interest rate reviews at home can have an effect, with leveraging your financial opportunities as often as is necessary another way to avoid disaster. Careful decisions about taking on the tax regime of your chosen country rather than staying with the UK tax regime also need research.

Again, it’s all about keeping up with current information, and not assuming that, if you’re non-resident, UK tax laws no longer apply to your investment, state and private pension income. Many expats have found they need to file income tax returns for some years after they’ve emigrated.

Making sure your family isn’t liable for UK inheritance tax after you’ve passed on is another issue which needs to be addressed by taking competent legal advice, and reducing any tax bill you may have by using allowances is also wise. Many expats bury their heads in the sand over financial matters, forgetting that, once overseas, the UK’s social support safety net is no longer available.
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