Ah, the joys of being an Expatriate, where your British accent often allows you to get away with a hell of a lot more than it does back in Blighty! It’s an exhilarating experience, filled with new cultures, cuisines, and adventures. But amidst the excitement, there's a crucial aspect that often gets overlooked: managing finances.
In collaboration with Plan First Wealth LLC, we've crafted a guide filled with actionable insights to help you navigate the financial waters of your new home. So, grab a cuppa and dive in!
1. Understand the Local Tax System
Did you know that some countries tax worldwide income, while others might offer tax breaks for new residents?
For instance, countries like Portugal currently offer a Non-Habitual Resident (NHR) regime, providing tax reductions for the first ten years. On the flip side, nations like the US tax worldwide income, regardless of where it's earned.
Just as you'd learn the local language, it's essential to familiarise yourself with the tax rules of your new home. This doesn't mean becoming a tax expert overnight but instead gaining a basic understanding. Google can be your friend here, failing that a good tax adviser that works between your country and the UK would help.
2. Protect Your Health and Wealth with Insurance
Picture this: you're hiking in the Swiss Alps, and you twist your ankle. Without proper insurance, that misstep could cost you a fortune!
Health services vary worldwide, and without the NHS umbrella, medical bills can skyrocket. Nudge Nudge to our cousins in the US!!
Beyond health insurance, consider life, property, and even pet insurance. Some countries might also have mandatory insurance policies for expatriates.
3. Stay Updated with Currency Exchange Rates
Remember when the pound soared, and you wished you'd sent money home? Or vice versa?
Currency rates fluctuate. By keeping an eye on them, you can make informed decisions about transferring money.
Consider using services like Caxton FX to get real-time rates and even set alerts for desired exchange rates.
4. Stay Alert of Local Tax Traps on Some UK Investments
Think your UK ISA is just a simple savings pot? Double check if this is still true when living abroad, especially in places like the US!
While ISAs are a popular tax-free savings tool in the UK, once you cross borders, their tax treatment can change. It's crucial to understand how your new country views these accounts to avoid unexpected financial surprises.
Fear not though, a good financial planner or tax adviser familiar with the UK and local laws can advise what is best.
5. Topping Up Your UK Pension: A Global Opportunity
Dreaming of retiring on a sunny Spanish beach or amidst the Tuscan countryside?
Your UK state pension can play a pivotal role in those dreams. Even if you're miles away, you may have the opportunity to top up your UK State Pension. And if you've previously lived or worked elsewhere, you could be eligible for both that country's state pension and the UK State Pension.
For clarity on whether you can pay into or receive another country's state pension, the gov.uk site is the place to start.
Living abroad is more than just a change of address; it's a journey filled with new experiences and some challenges to navigate. And while managing finances might seem daunting, with the right knowledge and partners by your side, you can make the most of your global adventure.
So, as you sip your tea in Tokyo or dine on croissants in Paris, remember this: with a bit of planning, the world truly is your oyster!
About our Caxton Partner
We are Plan First Wealth, a US-based Registered Investment Adviser dedicated to assisting Brits in the US. If that's you, don't navigate these waters alone. Reach out, and we'd be delighted to schedule a free 30 minute consultation. Please note, we do not provide tax or legal advice.
Find out more about Caxton Partners
Transfer Money Abroad With Caxton
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If you're looking to transfer money abroad with Caxton and want to get set up then check out Transfer Money Globally where you can find the country you need to send money to. Transfer Money to Australia, Canada, Europe, Spain, USA and many more.
Travel With Caxton
For more tips and tricks when you're abroad check out the Caxton Travel Money Blog: where you can find our travel advice, travel inspiration or our travel money guides so you can enjoy the best holiday for less. If you're going abroad this summer then have a look over our Summer Essential Checklist before you leave.