10:14AM BST 03 Jun 2014
Last year around 320,000 people left the UK to live abroad, according to the Office of National Statistics, with Spain, the US, France and Australia among the expat hot spots. If you’re thinking of working or retiring overseas, there are a number of practical considerations to take into account.
British citizens don’t need a visa to move to a country in the European Union but getting the right paperwork can be difficult if you’re going further afield, for instance to America or Australia. For those going for work, you often need to be sponsored by your workplace or have a skill which is needed.
Robert Turner of removal firm John Mason International suggested checking lists of skilled occupations in demand regularly as they often change. You may also wish to consider moving somewhere more remote. “It may be easier to get a visa to such a location as there are likely to be skills shortages, for example in Nova Scotia, Canada,” explained Mr Turner.
Outside the EU, those looking to retire abroad usually have to prove that they are wealthy enough to support themselves or be sponsored by a local resident.
While a warmer climate may be better for your health, the cost of health care can be significant, especially in North America. In the European Union, you will need to apply for a European Health Insurance Card(EHIC) to receive emergency treatment at a reduced cost or sometimes for free. In Australia, Medicare is the publicly funded scheme which exists alongside a private health system.
Having health insurance is often a condition of being granted a visa. It also pays to be aware of the rules and regulations for individual countries – for example, tough new regulations in Spain mean that some expats taking early retirement there have been blocked from free medical treatment.
When buying a new home overseas, check the cost of tax and legal fees which can often add 6-10 per cent to the purchase price. There are also ongoing taxes which vary depending on the region.
Jordan Tilley of foreign currency broker UKForex said: “In Spain, property tax in Huelva comes top at 1.16 per cent, more than twice that of Albacete, the lowest at 0.4 per cent.”
The tax may differ for residents too. For example, taking Italian residency means you’ll pay 3 per cent purchase tax and lower ongoing property taxes, but second home owners pay 9 per cent when buying and higher ongoing taxes, according to Italian agency Ultissimo.
Capital Gains Tax
Prepare yourself for capital gains tax (CGT) on any profit you’ve made when you come to sell your home. “You may be taxed in the UK and your new home country,” said Leah Feagan of Halo Financial.
“Some countries, like Canada, have agreements with the UK so that you only pay one lot of CGT.”
Although the state pension increases every year in Britain, you only get a rise if you move to a country that is in the European Economic Area or Switzerland or a country with an agreement with the UK. Those living in countries such as Australia and Canada have long complained aboutfrozen pensions, with some reporting that they have been forced to return to the UK as a result.
David Black of Consumer Intelligence noted: “It seems very unfair that those who have immigrated to certain countries don’t qualify for any future increases.”
Not only will you need to change a lump sum into your new local currency, but you may need to transfer money regularly between the two countries, perhaps for education fees or a pension. Foreign currency brokers charge lower fees and offer better exchange rates than using your UK bank.
Cost of living
Look into the living costs before deciding which country to settle in. Although property prices abroad are often cheaper than in the UK, day-to-day living may be the same or more expensive. Check out the cost of food, petrol, entertainment and energy.
Remember that living in a tourist area will be pricier than less popular areas. And don’t assume the exchange rate will stay the same. The pound has risen strongly against the South African rand and the US dollar in the last year. You can protect yourself against currency fluctuations by fixing the rate you’ll receive with a forward contract for up to 24 months ahead.
You may wish to return to the UK occasionally and family and friends will like to visit you. Look at the cost of flights and consider how close you are to an airport.
If you are sinking most of your savings into a property abroad, check the inheritance laws. Speak to an international solicitor to make sure you can leave your assets to your family as you wish and find out about inheritance tax.
Canada, Australia, New Zealand, South Africa and the US are popular places to settle overseas because English is the common language. But if you’re going to a non-Anglophone country, learning the local language will be an enormous advantage. It not only makes it easier to socialise, but helps if you need to go to the doctor or deal with estate agents and solicitors.
Original article can be found at: http://www.telegraph.co.uk/expat/before-you-go/10870167/Ten-things-to-consider-before-moving-abroad.html