Why we all need a guide for that new life abroad

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The Independent Online

No more pints of bitter for me. No more bacon butties and no more Northern Line in the London rush-hour either. I have chucked all that in for a new life in France.

I am not alone. By the end of this year, more than 300,000 Brits are expected to have left Old Blighty for foreign shores. The Office for National Statistics says a third will end up in the European Union and a third will go to Commonwealth countries, leaving the remainder sprinkled over the rest of the world.

If my experience is a guide, few will have prepared their finances and that will almost certainly cost them. Julia Whittle, international investments manager at the IFA Chase De Vere, says: "It is important to look at all your investments and financial arrangements. Your needs and the laws you are subject to will change when you switch countries, and you will have to reflect that in your financial setup."

I am ashamed to admit the only financial arranging I did was to tell my bank and fund managers my new address. Still, it could have been worse. National Savings says one in seven people who move home lose touch with their savings. That adds up to £11.4bn each year, much of it never reclaimed.

I did ask my bank if there was any problem with me living overseas and holding on to my accounts. There was not. I signed up to my bank's online service to keep track of my money from France, and by the time I arrived there was a host of credit card and savings account statements waiting. I also asked them for a letter saying what a great customer I had been: this proved useful when opening a French account. So, job done?

Mrs Whittle says: "You should tell your UK banks you are no longer paying UK tax, so they can pay interest without taking tax at source. You will have to pay tax in France on your earnings and you don't want to be double-taxed. The same goes for almost all countries."

I looked into opening an offshore account. The rates were better than those offered by UK banks and interest is paid gross. But the charges were higher and I was already enmeshed in the painful world of trying to convince a French bank to give me an account, so I let it slide.

I did one other thing. Knowing I would still be paid in pounds and I would need to convert them into euros, I opened a Nationwide Building Society current account. The debit card with the account allows me to take money out at local cash machines without fees or hidden exchange rate penalty. It is the cheapest way to get money out of the UK and you can withdraw as much as £500 a day.

But I have paid a price for my decision to stick to the pound. It has fallen 14 per cent against the euro in the past year, leaving me a euro-pauper, so curse you, Gordon Brown and your five tests.

David Wells, the Lille-based director of Abbey National France, says: "It makes sense to keep a good percentage of your money in the currency you use every day to protect against currency fluctuation." For those who own a property in the UK and want to hold on to it, moving countries has an added complexity. Mortgage lenders will want to know about your move, particularly if you are planning to rent out your home. Alan Oliver, of the Nationwide Building Society, says: "We won't make you change your mortgage because you want to rent the property, I don't think any lenders will, but it is important to tell your lender in advance."

Mortgage lenders may ask that the property be let by a professional letting agency. The Association of Residential Letting Agents has a list of approved agents. Home and contents insurance will have to be transferred to a commercial policy because the home is no longer owner-occupied.

Then there is the taxman. Hours spent on the phone to the Inland Revenue, the majority of them on hold, have left me wishing I had spent more time organising my tax situation while I was still in the UK.

The main issue seems to be deciphering my residential status. As a rule, if a person is out of the country for more than one tax year (6 April till 5 April) then they do not pay UK tax that year.

That rule is blurred for people like me, who return to the UK regularly, or who are not sure they are moving away permanently. Those with doubts can get advice from one of the Inland Revenue pamphlets covering tax and foreign residents, details below, or by calling the Inland Revenue helpline. The form to for those leaving permanently is a P85, available from the Inland Revenue's website or by calling a tax office. Fill it out before you go.

National insurance is another headache. Those living in another European Union country and planning to come back or returning regularly may continue to pay NI in the UK, preserving their state pension. So filling out an E111 form will ensure you remain covered. If you are living outside the EU or in the EU but not planning to return here, you are unlikely to have this option. Call the National Insurance Centre for Non-Resident Services.

One final word of advice. You can do a lot of this once you have landed in your new country. I did. But my first month's phone bill was a whopping €300 (£211). It really is worth your while sorting it out before you leave.


* Make sure your bank, fund managers and pension managers have your new address;

* Tell your mortgage lender you are leaving and planning to rent your property. Change your insurance;

* Tell the taxman you are leaving by filling out a P85 and call National Insurance to tell them you will no longer be paying contributions;

* Review your investment portfolio and think about how you might change it so it continues to be tax-efficient, meet your financial goals and operate at risk levels you are comfortable with. Beware exchange rate risk;

* Make sure you have health insurance in your new country. If you are not covered, or not sure, consider taking a short-term private policy;

* Have a plan to get money to your new country. Open a local account as soon as possible.


* Unclaimed Assets Register 0870 241 1713 www.uar.co.uk

* Association of Residential Letting Agents 0845 345 5752 www.arla.co.uk

* Nationwide Building Society 0800 302010 www.nationwide.co.uk

* National Insurance Centre for Non-Resident Services: 08459 154811

* Inland Revenue International Tax Office: 0151 210 2222

* Inland Revenue leaflets and general inquiries 0151 472 6196 www.inlandrevenue.gov.uk

* Inland Revenue International Q&A www.inlandrevenue.gov.uk/internationals/faqs.htm

* British Embassies and Consulates 020 7270 1500


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