Essential Financial Advice for Expats

This week, our insight is from one of our financial partners, Alexander House Ltd., who can offer expert financial advice and guidance on the key personal finance areas that will affect expats making the move to Spain

Image

Pensions

The big question here is: should you leave your pension in the UK or transfer it? There are a number of options to choose from, and you should speak to an independent financial advisor – after all, this could potentially reduce your income tax and inheritance tax bill. When it’s broken down, British expats have two choices when it comes to managing existing UK pension schemes:
  • Option 1: Leave the UK and retain your workplace or private pension with a UK provider
  • Option 2: Transfer the UK pension funds into a Qualifying Recognised Overseas Pension Scheme (QROPS)
 
There are other alternatives and variants of course; British expats can unlock significant benefits from their pension, including enabling them to avoid significant tax in the UK by transferring their pension to a QROPS. Of course, some individuals might consider it worth paying any additional tax to keep it inside the UK regulatory system.
 

Investments

Expat investment options themselves can take many guises, and can be either onshore or offshore, although, for expats, the offshore investment option is considered more favourable, given the tax benefits.
 
Similarly, some more traditional UK based investment options, such as ISAs, are not available for non-UK residents and expats living outside the UK.
 
Understanding all of the available investment options for expats can be complex and confusing, which means it is important to get independent advice if you are unclear about your best course of action.
 

Inheritance Tax

Even if you are an expat living outside the UK, you will still be subject to Inheritance Tax in the UK if you are deemed to be of UK domicile status.
 
If you are UK domicile and your estate is valued at over £325,000, your estate will be subject to Inheritance Tax – usually at 40% on the amount over the threshold. Since 2007, this threshold has increased to £650,000 for married couples and civil partners, providing the executors transfer the first spouse/partners unused Inheritance Tax threshold to the second partner when they die.
It is essential to understand that being classed as non-resident in the UK for tax purposes, as your domicile is unlikely to have changed, you will still be liable for UK Inheritance Tax.
 
Alexander House Financial Services Ltd is a Chartered Independent Financial Advisor Firm.
 

Further reading for Living In Spain

Image

Finding work

There are a number of ways that UK expats can fund their lifestyle in Spain.

Read more..

Image

Social life in Spain

Find out as much as you can about your new community and find new friends.

Read more...

Image

Heathcare

Arrange health insurance and locate your new local hospitals and practices.

Read more...

Image

Education in Spain

Emigrating with school-age children? Learn more about schooling in your local area.

Read more...