Whether you’re returning to the UK from an overseas assignment or have decided to move back for other reasons, it’s vital to plan your return in good time.
How much time you should allow before you return to UK soil will depend on your circumstances and how long you’ve spent living abroad.
Generally, the longer you’ve been outside the UK, the more money you might have accumulated and the more complicated your financial situation. This increases the importance of sound financial planning prior to your move.
Here’s you can discover a few of the ways an expert financial planner can help protect your wealth and smooth your return to the UK.
1. Checking the tax position of your investments
To a large extent, UK tax liabilities depend on your residency status:
• If you’ve lived abroad for fewer than five consecutive tax years, HMRC will likely treat you as a temporary non-resident by HMRC.
• If you’ve lived overseas for more than five years, you’ll be subject to different tax rules regarding your income and capital gains.
Reviewing your financial plan before and after you move back to the UK can help you minimise taxation and make the most of tax-efficient opportunities.
Depending on where you’re moving from, if your investments have appreciated in value, you might want to consider selling them ahead of your move to realise gains before returning to the UK.
On the other hand, if you’ve made a loss, you may wish to wait and sell after your return to the UK, so you can offset losses against tax.
Where possible, it’s helpful to return to the UK at the start of a tax year (6 April), as the clear demarcation will make things simpler to manage.
Whenever your move is scheduled, make sure you’re up to date with all HMRC filing obligations.
2. Helping you understand your options for moving pension savings
If you’ve been contributing to a pension in the country you’re leaving, you need to consider what to do next.
It may be possible to transfer your overseas pension scheme into a registered UK pension scheme. However, not all UK pension schemes accept overseas transfers.
Once you’ve found a pension provider willing to accept the transfer, since the money is arriving from another country, the provider will need to carry out anti-money laundering checks to verify the source of the funds being transferred.
If you've already started drawing on your pension while abroad, you’ll need to find a UK provider willing to both accept the transfer and continue the payments in the UK.
Should your pension savings be in a qualifying recognised overseas pensions scheme (QROPS), you must inform the QROPS provider when you return to the UK. If you transfer your funds or take benefits from your QROPS, the scheme is responsible for reporting payments to HMRC.
No matter what type of pension you have, in the event that you're already drawing an income from your pension savings, you'll be liable to UK Income Tax once you return. We’ll help ensure that the income you draw from your pension, and any other assets, is done tax-efficiently.
We’ll help you explore all your options, ensuring that you take appropriate steps to protect your retirement savings.
3. Ensuring you have the right protection in place
Moving back to the UK is a big life event. As such, it’s sensible to review the cover you have and what you might need to ensure that you and your family will be financially protected, should the worst happen.
To protect your long-term wealth in the event of ill health, an experienced planner can provide advice on policies ranging from income protection insurance, private health insurance, and critical illness cover.
Since policy terms and the cost of premiums can vary greatly between providers, we’ll also help ensure you take out the appropriate level of cover for the most suitable price.
Pay particular attention to life insurance. Everyday costs and expenses may change significantly when you move back to the UK. So, it’s important to ensure that your family will be able to cover living expenses if you’re no longer around to support them.
4. Taking steps to protect your estate from Inheritance Tax
Different jurisdictions have different ways of managing your assets on your death. Protecting all your assets may require separate wills.
It’s important to plan ahead to make sure all your assets ends up in the right hands as quickly as possible, avoiding unnecessary taxes on the way.
We can help ensure that your savings and investments are set up properly, helping to reduce the chances of your estate being eroded by taxes.
The right structure can also help make probate smoother and ensure that assets are passed on to your beneficiaries as quickly as possible, with relative ease.
5. Liaising with other experts to help smooth your transition
A financial planner may be only one of the experts you’re working with to ensure a smooth transition back to the UK.
As a wealthy expat, you’ll likely be working with other professional experts to ensure you’re making appropriate decisions to protect your assets.
A tax adviser, for example, will help you protect your wealth from taxes that might arise when moving your assets between countries.
It’s also sensible to work closely with someone who specialises in currency exchange. A currency specialist can use a series of instruments to ensure you’re getting the best possible rate.
With so much to consider, it’s important that you work with experts who understand the financial systems in both the UK and the country you’re leaving. Getting the right advice is crucial to ensure you don’t fall foul of the more complex investment rules or end up paying unnecessary tax.
We can help you take advantage of the opportunities and avoid the threats
Alexander Peter provide specialist advice to British expats and international employees living around the world.
Privately owned and totally independent, you can rest assured that you’ll receive the most appropriate recommendations and bespoke advice tailored to your circumstances.
Because many of our planners have been expats themselves and relocated back to the UK, they understand the issues you may face.
To find out more about how we could help you, email enquiries@alexanderpeter.co.uk or call +44 1689 493455.
Please note
This article is for general information only and does not constitute advice. The information is aimed at retail clients only.
All information is correct at the time of writing and is subject to change in the future.
Please do not act based on anything you might read in this article. All contents are based on our understanding of HMRC legislation, which is subject to change.
The Financial Conduct Authority does not regulate estate planning or tax planning.
A pension is a long-term investment not normally accessible until 55 (57 from April 2028). The fund value may fluctuate and can go down, which would have an impact on the level of pension benefits available. Past performance is not a reliable indicator of future performance.
The tax implications of pension withdrawals will be based on your individual circumstances. Thresholds, percentage rates, and tax legislation may change in subsequent Finance Acts.
The value of your investments (and any income from them) can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance.
Investments should be considered over the longer term and should fit in with your overall attitude to risk and financial circumstances.
Note that life insurance and financial protection plans typically have no cash in value at any time and cover will cease at the end of the term. If premiums stop, then cover will lapse.
Cover is subject to terms and conditions and may have exclusions. Definitions of illnesses vary from product provider and will be explained within the policy documentation.
