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Financial Planning Checklist

Our financial planning checklist will help you understand what you need to consider as an expat living abroad

Written by E4E Editor on 20 January 2022

We’ve collated a financial planning checklist for the financial matters British expats should be considering to ensure nothing is missed and help you avoid making an expensive mistake.

With new pension rules, changes to the non-resident tax requirements, an expected rise in interest rates as well as a global economic recovery in the balance, it’s important you understand how your financial situation will be affected.

Here’s our financial planning checklist you should plan for and request independent advice about in the next twelve months:

Complete your tax return

You will need to complete a UK tax return if you have received an income from the UK over £11,000 (in tax year 2016/17) via any of the following:

  • Your pension(s)
  • Rental income from a UK property
  • Disposal of any shares or other assets

The tax return deadline is January 31st 2018, so we recommend setting aside some time during the festive period to ensure you have all your receipts and records in order to ensure your tax return is submitted in time.

If you have not registered for a tax return, or you need assistance, you should request assistance from a qualified tax adviser. They will be able to guide you through the process and ensure you pay the correct amount of tax and avoid any penalties.

Remember, filing or paying late will attract a penalty as well as interest on any late payments.

Create a financial plan just in case the personal allowance for non-residents is abolished

While expectations were set for the government to remove the personal allowance for non-residents, there is still the very real possibility that it could be abolished in the 2017/18 budget.

If this is the case, your income will decrease by 20%, potentially even more – even if you only receive the basic state pension.

It is therefore imperative that you review your income now and make necessary provisions to ensure that your income is protected, wherever possible, from unnecessary income tax.

Create or review your will and estate plans

For many people, creating a will is one of those things which is always on the to-do list, but never becomes a top priority.

For expats it is especially important to create a will, not just in the UK but also in your country of residence which will have different laws over how your estate is distributed.

Remember, if you are still domiciled in the UK you will also have to pay UK inheritance tax on your assets. However, it may be possible to restructure your estate to minimise any unnecessary inheritance tax.

Understand the changes to pension rules

2014 saw a lot of changes about how pensions work and how you can take an income from your pension. These include not having to purchase an annuity, pension bonds and the abolition of the 55% death penalty among others.

If you have a pension in the UK, you should seek independent financial advice from an expert who can assist with non-residents to ensure the advice includes all your options (including QROPS), not just those available to UK residents.

Don’t fall foul of new Capital Gains Tax rules for non-residents

Until April 2015 non-residents selling a UK property have not had to pay any Capital Gains Tax on their property, provided they have been out of the country  long enough to qualify for exemption (or return too soon after selling it).

That rule changed on the 6th April 2015 meaning that if you have sold a property after that date, you may have to pay Capital Gains Tax.

The gain will be calculated based on your sale price and the value of your property on the 6th April 2015, so it is recommended that, where possible, you have your property valued as soon as possible to understand how much it is worth.

Expectations are that house prices in the UK are rising more slowly than in previous years, so you also need to consider if now is the right time to sell.

Take time to review your investments and savings

With so much economic and political turbulence around the world, the performance of your investments may have significantly changed in the previous few years. If you have not reviewed your investments and savings in the past 12-24 months, it is essential that you take the time to do so as soon as possible.

It is predicted that interest rates will rise in the UK and other countries in the not too distant future, so ensuring that you have access to the best rates of return could make a huge difference to your long term financial plans.

Book a meeting with your financial adviser, or if you would like a different independent adviser to review your financial performance, we can help.

Enter your details via the form to request a free consultation with a British independent financial adviser who is an expert assisting non-residents and expats living anywhere in the world.

Request free and independent consultation

If you would like independent assistance with anything mentioned in our financial planning checklist, enter your details via the form and we will arrange for an independent adviser to organise an initial free consultation with you.

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