With this year’s torrential rain, many UK residents are contemplating moving abroad to sunnier climes.

Whether you are planning to leave for just a few years, or heading for a permanent move, your finances should be one of the top things to get sorted before you move to ensure you avoid a financial headache.

Here at MoneyTowers, we have put together a list of the Top Five money considerations you might want to think about before you head off to a foreign country to live.

Currency Risks
You need to think about what currency you want your money to stay in – either the local currency, or the British pound. Many experts advise you move your money into the local currency of the country you are moving to, but ensure that this is the right move for you.

If the exchange rate changes significantly, any interest accrued may be wiped out even if you keep a sterling account. Ensure you are covered for if the exchange rate moves.

If you are retiring abroad and have a British pension, or you are planning to transfer large sums of money from a British bank in pounds into local currency, find yourself a specialist currency exchange who will be able to give you good rates and who won’t charge high transfer charges.

Banking
If you are with a bank who have branches in both the UK and abroad, you should not have too many difficulties. However, if your bank does not have branches abroad, think about how you are going to access your British bank account. Online banking is a definite plus here as it is 24 hours a day and there will be no problems with lack of local branches or the time zone difference.

Remember that if you are planning to stay in the country for a long period of time, opening up a local bank account is a good idea – wages can then be paid in and bills paid easily.

Pensions
The country you choose to retire in can make a big difference to your pension income, so make sure you are aware of all the issues before you move. According to the Department for Work and Pensions, around 1 million Brits have their pensions paid abroad.

If you move to another country in the EU, you are eligible for the full UK state pension and it will continue to increase in line with inflation. If you retire to an non-EU country, check to ensure you are still eligible for the full UK pension. It is worth noting that if you retire to countries such as South Africa or New Zealand, your pension will not increase in line with inflation.

Taxes
Taxes are a complicated area and we advise that you take professional advice before moving. Generally speaking, you will be taxed wherever you are considered a resident – if HM Revenue & Customs consider you a UK resident, you will have to continue paying UK taxes. You will also be liable for British taxes if you spend over 183 days in the UK, or if your visits to the UK average 91 days or more over a 4 year period.

If you become a resident in another country, and become a non-resident in the UK, you will be liable for taxes in your new home country. If the country has a double taxation treaty in place with the UK, you will only ever be taxed in one place – either the UK or your new country, not both. It is worth checking whether the country you are moving to has this in place or not.

Different countries will have different will and inheritance rules so it is advisable to contact a professional in the country who can give you more specific advice.

Health Insurance
You will need to register yourself with the country’s social security system when you move. This means that you will be able to benefit from the services that the government offer such as any healthcare services.

It is usually advisable to get some form of private medical insurance to ensure that you get top-notch treatment if you ever fall ill. Remember that even in some state hospitals in other countries, you may need to pay for some treatment costs therefore medical insurance is usually well worth getting.

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