The idea to move abroad is born - and with it comes excitement, anticipation and a renewed sense of direction.
At first, there is just a small thought that sparks and we ask ourselves, “Could it be achievable?” Then a plethora of possibilities opens up. Not before long, we are enquiring about property prices, cost of living and employment. Our daydreams turn to visualisations of our possible new life overseas. We see ourselves smiling more - and enjoying life with increased vigour.
Most people have the idea and the spark, but soon lose their drive. They are the people who grow old and say, “If only.”
Then there are those who have the passion and desire to carry their plans to fruition. Regardless as to your resolve, however, there will always be times when you doubt yourself. Your excitement will allow you to make massive strides, but at some point you will stop to catch your breath and wonder if you are making the right decision.
Mrs Turner, new to the world of overseas living, explained “I spent all my spare time planning, preparing and ticking off endless lists. After a few months I felt overwhelmed – was I merely caught up in ‘living the dream’ or did I truly understand what was to come? And how could I make sure that I wasn’t making a big mistake?”
Unfortunately, there are quite a few people who return to the UK not long after an overseas move. Sometimes people repatriate due to health matters, missing family or simply missing their old way of life. Others move back because the dreams they floated on did not match the reality.
One way to ensure that you are making the right decision is to “play house” in your overseas location.
Try to make arrangements to stay in your desired location for as long as possible, be it a few weeks or a month. Then make plans to enjoy the location without being a tourist. This means rather than stay in a hotel, rent a villa or better yet, do a house swap. Instead of visiting the main attractions, check out all the things that locals do. Go grocery shopping, check out employment adverts and do everything you would normally do if you were moving from one town in the UK to another.
When Mrs Turner felt overwhelmed, she decided to book a two week trip to her future destination. Although she had spent several holidays there, she never spent the duration knowing that it would one day be called “home.”
Mrs Turner said, ‘It was the best decision I made. By spending two weeks in my future town I was able to better set my expectations. I went to the doctors, paid a visit to a community centre, made enquiries about a local art class and made sure to eat most of my meals at home. By the end of the two weeks, I realised that some of my expectations were a bit too high whereas others were too low. Overall, the holiday gave me the needed push to set me back on track.”
By giving yourself time to be a resident, rather than a tourist, you will get a more realistic idea of life in your desired location. As with Mrs Turner, time spent in your future destination may also give you even more reason to fulfil your plans.
As with all areas in the world, there will be pros and cons and without experiencing life as a local, it is very easy to make a move without knowing exactly what the negatives and positives are.
Spending time on holiday is very different from making a holiday destination a home.
During the process of playing “house”, you might want to test public transport to see how reliable it is, stroll through the area at different times of the day to listen out for noise, buy the type of groceries you normally purchase to determine if they are available and at what price - and definitely check out health services – how far away are they and will they cater to your needs?
The more you match your needs to your overseas destination, the less likely you will be to ask, “Am I making the right decision?”
Carol Dunning
http://www.portugalbuyingguide.com
Friday 24 September 2010
Friday 17 September 2010
Pensions when moving abroad
Hello – and how are you?
It’s been a lovely quiet week for me. However, the weekend is looking busy, with ‘Satchmo Remembered’ at the V&A Café on Friday – Louis Armstrong’s music. And then on Saturday I am going to see what is described as a top-notch comedy cast of Mackenzie Crook, Ralf Little and Olly Alexander as a trio of slackers who spend their days loitering outside a Vermont coffee shop. All this at the tiny theatre at Shepherd’s Bush. It’s great ‘cos you can actually lean out and touch the actors should you so desire – I won’t – I promise! I saw the lovely Joseph Fiennes here – it’s a great venue and my son is joining me so that should be enormous fun.
So – are you still thinking of buying a home abroad? And are you actually going to be moving permanently? Reason I ask is that today, with our finances sorely strained as they are, it’s important to know how this will affect taxation on any pension you may receive from the UK.
Once you're a resident abroad what you need to ascertain is how your new home country and the UK will divide up the tax. Even if you are a non-resident of the UK, you are taxed on income earned in the UK – and this includes any pension emanating from the UK - but does that mean that you end up paying twice?
This is where those vitally important Double Tax Treaties (DTT) come into play. There are specific provisions in Double Tax Treaties that can impact on this, and in particular there is a distinction made between government and non governmental pensions.
You would need to review any applicable Double Tax Treaty between the UK and your new country of residence very carefully before rather than after moving: any relief available depends upon the terms of each DTT. And of course you will need to know exactly how to set about making sure that you do the right thing to avoid any duplication of tax. If a benefit applies you can then make a claim with HMRC for the pension to be paid either:
- Without tax deducted
- With tax deducted at a reduced rate of tax as laid down in the DT Treaty
You should take expert and detailed advice on this – if you need help finding a reputable IFA (Independent Financial Advisor) please call the OGC Resource Centre on 0207 898 0549 and they will help to find one. I think it’s really important to think about this before you even think of moving –after all, you may be reliant on your pension income and you need to budget well in advance.
I will chat to you next week: winter is just around the corner and already it feels to me that the colder weather is on its way. I am looking forward to a holiday I have planned in sunny Morocco in October…!
Best wishes,
Carol.
It’s been a lovely quiet week for me. However, the weekend is looking busy, with ‘Satchmo Remembered’ at the V&A Café on Friday – Louis Armstrong’s music. And then on Saturday I am going to see what is described as a top-notch comedy cast of Mackenzie Crook, Ralf Little and Olly Alexander as a trio of slackers who spend their days loitering outside a Vermont coffee shop. All this at the tiny theatre at Shepherd’s Bush. It’s great ‘cos you can actually lean out and touch the actors should you so desire – I won’t – I promise! I saw the lovely Joseph Fiennes here – it’s a great venue and my son is joining me so that should be enormous fun.
So – are you still thinking of buying a home abroad? And are you actually going to be moving permanently? Reason I ask is that today, with our finances sorely strained as they are, it’s important to know how this will affect taxation on any pension you may receive from the UK.
Once you're a resident abroad what you need to ascertain is how your new home country and the UK will divide up the tax. Even if you are a non-resident of the UK, you are taxed on income earned in the UK – and this includes any pension emanating from the UK - but does that mean that you end up paying twice?
This is where those vitally important Double Tax Treaties (DTT) come into play. There are specific provisions in Double Tax Treaties that can impact on this, and in particular there is a distinction made between government and non governmental pensions.
You would need to review any applicable Double Tax Treaty between the UK and your new country of residence very carefully before rather than after moving: any relief available depends upon the terms of each DTT. And of course you will need to know exactly how to set about making sure that you do the right thing to avoid any duplication of tax. If a benefit applies you can then make a claim with HMRC for the pension to be paid either:
- Without tax deducted
- With tax deducted at a reduced rate of tax as laid down in the DT Treaty
You should take expert and detailed advice on this – if you need help finding a reputable IFA (Independent Financial Advisor) please call the OGC Resource Centre on 0207 898 0549 and they will help to find one. I think it’s really important to think about this before you even think of moving –after all, you may be reliant on your pension income and you need to budget well in advance.
I will chat to you next week: winter is just around the corner and already it feels to me that the colder weather is on its way. I am looking forward to a holiday I have planned in sunny Morocco in October…!
Best wishes,
Carol.
Friday 10 September 2010
Emigrating Overseas?
Hi there: how are you? Summer seems to be receding further and further away…roll on my holiday to Morocco in October, where the weather no doubt will be lovely!
I have been chatting to a number of people recently about emigrating: many are the reason they give but one of the chief ones seems to be lack of employment here in the UK. When you hear news like social housing firm Connaught, which employs 10,000 people, going into administration on Wednesday it is food for thought indeed. But the question is: will it be any easier to find employment abroad - and how will you set about doing this?
First, the nuts and bolts. EU citizens are not required to have a work permit in order to work in the EU. However, you will need proof of residency once you do get a job. To do this you usually apply to the Immigration Department. Non-EU citizens are generally required to have a work permit and a residence permit in order to be employed abroad and can be a harder nut to crack.
There is no doubt about it: first prize is either to get a transfer abroad via your present form or to line up a job before you move. You may think of contacting the local embassy of the country you are thinking of moving to for assistance, or perhaps find yourself a blog or Internet site that deals with getting jobs in the country you are planning to move to.
If that fails, what next?
As an English speaker, the first job that springs to mind is that of teaching English – of course this only really applies in countries where the first language is not English.In most countries there is a desire to learn English, not the least as it is generally considered the business language of the world.
While still in the UK you can search for teaching jobs in publications such as the TES (Times Educational Supplement) and the Guardian EFL pages on Tuesdays. Alternatively, certain ESL (English as a Second Language) websites like ESL employment and tefl.com can be useful. Upon arrival you can try local newspapers or perhaps employment agencies or international companies. Some British Council offices are helpful too as they produce lists of local schools and can point you in the right direction.
Tourism is another promising field of employment that you could try; jobs here are mainly available in the summer. You may think that this sort of work won’t pay the bills for ever but at least you can be looking around while earning a few cents.
For business related opportunities, the bigger cities should be your focus.
How to seek out jobs:
Self-employment
I hope this has given you a few ideas. I’d love to hear if your plans include working abroad and, if so, what your strategy is?
In the meanwhile, I am going to get back to my job of happily tapping away on my computer in the good old UK! Take care until next week,
Carol.
I have been chatting to a number of people recently about emigrating: many are the reason they give but one of the chief ones seems to be lack of employment here in the UK. When you hear news like social housing firm Connaught, which employs 10,000 people, going into administration on Wednesday it is food for thought indeed. But the question is: will it be any easier to find employment abroad - and how will you set about doing this?
First, the nuts and bolts. EU citizens are not required to have a work permit in order to work in the EU. However, you will need proof of residency once you do get a job. To do this you usually apply to the Immigration Department. Non-EU citizens are generally required to have a work permit and a residence permit in order to be employed abroad and can be a harder nut to crack.
There is no doubt about it: first prize is either to get a transfer abroad via your present form or to line up a job before you move. You may think of contacting the local embassy of the country you are thinking of moving to for assistance, or perhaps find yourself a blog or Internet site that deals with getting jobs in the country you are planning to move to.
If that fails, what next?
As an English speaker, the first job that springs to mind is that of teaching English – of course this only really applies in countries where the first language is not English.In most countries there is a desire to learn English, not the least as it is generally considered the business language of the world.
While still in the UK you can search for teaching jobs in publications such as the TES (Times Educational Supplement) and the Guardian EFL pages on Tuesdays. Alternatively, certain ESL (English as a Second Language) websites like ESL employment and tefl.com can be useful. Upon arrival you can try local newspapers or perhaps employment agencies or international companies. Some British Council offices are helpful too as they produce lists of local schools and can point you in the right direction.
Tourism is another promising field of employment that you could try; jobs here are mainly available in the summer. You may think that this sort of work won’t pay the bills for ever but at least you can be looking around while earning a few cents.
For business related opportunities, the bigger cities should be your focus.
How to seek out jobs:
English periodicals. Here you will find a selection of jobs from teaching to secretarial, advertising and sales
Job agencies, especially in the larger cities. Remember to have your CV and references to hand
Ask around - try that friendly shop owner, or pop into an Estate Agent...if they don’t have anything, they may know someone who has. Personal contacts can be very helpful when looking for a job
Contact working expats, either personally or through the Internet: they have been where you are and may well be able to help
Place ads in papers, bar notice boards, at the golf course, in shops etc.
Other options:
A large number of UK recruitment agencies have permanent bases abroad – ask large employment agencies in the UK before you move if they have an office in the country you are moving to
Try informal methods of recruitment such as word of mouth, networking and speculative applications, especially for small and medium-sized companies.
Self-employment
If you are an EU national or a permanent resident with a residence card you can work in a EU country as a self-employed person or a sole trader. As such, you must meet certain legal requirements and register with the appropriate organisation.
Getting started in your own business
Just a few very basic points:If you plan to run your own business, give careful consideration to where you will be living in relation to your customers
Make sure that you are doing something that is different, something that will benefit your potential customers and make them more inclined to deal with you
Be sure that there is enough demand for your product or service and that there are sufficient customers to keep you in business
There are very few businesses that are profitable from the start. It’s therefore very important that you budget for start up costs and that you have sufficient funds to keep you and your family going until the business starts to make a profit.
I hope this has given you a few ideas. I’d love to hear if your plans include working abroad and, if so, what your strategy is?
In the meanwhile, I am going to get back to my job of happily tapping away on my computer in the good old UK! Take care until next week,
Carol.
Friday 3 September 2010
Non-Resident Status in the UK
Hey there – how are you? I am off to an outdoors Blues concert tonight…very brave of me I might add! The last one I attended saw me sitting like a ghostly wraith in the pouring rain, in a waterproof poncho thoughtfully provided by concert hosts. It was most enjoyable but did I ever get the mother and father of all colds! Wish me luck tonight…
A question I am often asked these days by people who are moving abroad is this: exactly when are you considered to be a UK resident, or to turn this question on its head, when are you considered a non-resident? This has become one of the most controversial and worrisome aspects of emigration recently, largely due to the tax implications that accompany it.
Evidently, according to a recent Court of Appeal decision in the long drawn out Gaines Cooper saga, it is no longer enough to conform to the rules as laid down by HM Revenue & Customs. These laid down that, to prove non-residency, you needed only to show that you didn’t spend more than 90 days a year on average in Britain over four years.
Now the taxman is allowed to scrutinise in more detail whether non-residents have made what they consider to be enough of a break from the UK.
So…how do you make sure that you qualify for non-resident status?
In most EU countries an individual is not considered a resident unless 183 days are spent there each year. In the UK, it is 90 days on a rolling four-year average, although you can spend up to 183 days in any given year. Things like visiting offspring or grandchildren in the UK will count toward your 90-day limit. Incidentally there are dispensations if you are visiting someone because of an emergency. If a member of your family is terminally ill for example, you may be able to stay for more than the average 90 days over four years. However, you would not be able to stay for more than 183 days in any given year without risking your status.
But this is no longer the only criterion; continuing connections with the country will now be taken into account, and this can be a very grey area.
Keeping a house or a car in the UK, maintaining membership of a private club, or even regularly attending social events such as Royal Ascot or Wimbledon can now be used against you in terms of proving your non-resident status. Needless to say, this new vigilance has largely been brought about in an effort to check up on those seeking to avoid the new 50% tax rate imposed on the super-rich.
Individuals must prove an intention to leave the UK permanently or indefinitely. Recent Court decisions on residence tend to be in favour of HMRC and there is no doubt that they are actively pursuing cases where, in its view, the taxpayer has not done enough to demonstrate that they have ceased to be UK resident.
What does this mean to you? Well, the bottom line is that you need to sever as many ties with the UK as possible. It is no longer sufficient just to stay abroad for the obligatory period and tally up days spent in the UK. You have to be able to demonstrate a complete break with the country.
To do this you may want to consider adopting the following measures:
Property in the UK:
A question I am often asked these days by people who are moving abroad is this: exactly when are you considered to be a UK resident, or to turn this question on its head, when are you considered a non-resident? This has become one of the most controversial and worrisome aspects of emigration recently, largely due to the tax implications that accompany it.
Evidently, according to a recent Court of Appeal decision in the long drawn out Gaines Cooper saga, it is no longer enough to conform to the rules as laid down by HM Revenue & Customs. These laid down that, to prove non-residency, you needed only to show that you didn’t spend more than 90 days a year on average in Britain over four years.
Now the taxman is allowed to scrutinise in more detail whether non-residents have made what they consider to be enough of a break from the UK.
So…how do you make sure that you qualify for non-resident status?
In most EU countries an individual is not considered a resident unless 183 days are spent there each year. In the UK, it is 90 days on a rolling four-year average, although you can spend up to 183 days in any given year. Things like visiting offspring or grandchildren in the UK will count toward your 90-day limit. Incidentally there are dispensations if you are visiting someone because of an emergency. If a member of your family is terminally ill for example, you may be able to stay for more than the average 90 days over four years. However, you would not be able to stay for more than 183 days in any given year without risking your status.
But this is no longer the only criterion; continuing connections with the country will now be taken into account, and this can be a very grey area.
Keeping a house or a car in the UK, maintaining membership of a private club, or even regularly attending social events such as Royal Ascot or Wimbledon can now be used against you in terms of proving your non-resident status. Needless to say, this new vigilance has largely been brought about in an effort to check up on those seeking to avoid the new 50% tax rate imposed on the super-rich.
Individuals must prove an intention to leave the UK permanently or indefinitely. Recent Court decisions on residence tend to be in favour of HMRC and there is no doubt that they are actively pursuing cases where, in its view, the taxpayer has not done enough to demonstrate that they have ceased to be UK resident.
What does this mean to you? Well, the bottom line is that you need to sever as many ties with the UK as possible. It is no longer sufficient just to stay abroad for the obligatory period and tally up days spent in the UK. You have to be able to demonstrate a complete break with the country.
To do this you may want to consider adopting the following measures:
Property in the UK:
- Sell your UK property or let it out for at least 12 months - do not leave it unoccupied
- If you are letting the property, ask a UK agent to deal with the property on your behalf
- Pay all property bills before you depart the UK
- Notify your house insurers that you are emigrating and adjust the insurance accordingly
- Notify your mortgage lender that you are emigrating
- Notify your local council that you no longer reside at the property
Business matters in the UK:
- Consider resigning from any UK company directorships or company secretarial positions
- Consider disposing of your UK business interests altogether
Other UK matters:
- Notify your UK doctor and dentist that you have left the UK
- Cancel your UK sporting and social club memberships
- You would be wise to appoint an attorney in the UK who is empowered to deal with your UK affairs
Taxes
- Send the completed form P85 to HMRC, declaring that you are a non-resident
- You would be well advised not to return to the UK for an entire tax year if possible to emphasise the break in residence
- Do not return to the UK for more than 90 days a year in subsequent tax years, remembering to factor in travel days in this number
Finances
- Cancel all UK credit cards and reduce balances in your UK bank accounts
- Pay all UK accounts and close them. Demand evidence that they are closed in the form of a letter of acknowledgement
- Consider transferring pension arrangements overseas.
Cars
- Sell your car and cancel your car insurance and subscriptions to motoring organisations
In your new country of residence - once you have moved abroad:
- Establish employment or business links in the new country if you are planning to work there
- Obtain a residence permit where necessary
- Contact the local tax authorities to inform them that you have become a resident
- Purchase or rent on a long lease a property locally and buy a car there
- Register with a doctor and dentist in your new country of residence and open a local bank account
- Establish social and cultural connections in your new homeland. Perhaps join clubs, register children at schools etc.
- Have a will drawn up in your new country of residence
What you need to do is make sure that you have effectively cut off ties with the UK in terms of living here. The overall pattern of your life must reflect your declared non-resident status and the fact that you have left the UK for the foreseeable future.
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