So you’ve decided to move to France. It’s a very exciting time, if a little daunting. And there is so much to do, from packing and planning to saying goodbye and organising logistics.
But whether you’re moving abroad for a new job and a fresh new start, or retiring and looking forward to taking it easy, one thing that is really important to sort out before you move is the financial side of things. Jennie Poate at Alexander Bates Campbell Europe Limited, a company of Independent Financial Advisers specialising in wealth preservation and management, tax, financial and succession planning for private clients and their families, throughout Europe, explains why you should get good financial advice before you make the move.
The Importance of Using a Financial Adviser Before Moving Abroad
At this stage, you may be tempted to do things yourself. After all, how hard can it be? Or you may take the view that there is not that much to sort out financially and you’ll handle it all once you get to your new home. However, navigating not one, but two tax systems, one of which may be in a foreign language and organising your finances in a way that enables you to live the life you want, worry free, is not necessarily as straightforward as you think.
A financial adviser can guide you through the quagmire of regulations in different countries and help you make informed decisions that that protect your financial position and help you ensure you get the best out your finances. With this in mind, here are the main things that a financial adviser can help with if you move abroad.
1. Tax planning and compliance
Tax rules vary from country to country and it’s really important to understand the rules that apply to you and make sure you comply with them. If you don’t, you could face serious penalties. Just to make the situation slightly more complicated, in 2024/5, the UK tax rules for the payment of Inheritance Tax are changing, and from 6 April 2025 will depend on an individual’s tax residence rather than on domicile.
A financial adviser can help demystify the tax laws that apply to you and help you with:
- Tax residency and compliance
Tax residence and domicile are different. Tax residence relates to where you are living in a tax year and is therefore short term, whereas domicile is more long-term and refers to the country which you consider to be your permanent ‘home’ over the course of your life. Where you are tax resident or domiciled will affect what tax you pay and in what country. A financial adviser can help assess your tax residency and status, ensuing you are compliant both in the UK and in the country you move to.
- Tax planning
Once you know what tax regime/s applies to you, your financial adviser can assist with tax planning. There may be foreign-earned income exclusions, tax credits or offshore accounts that you can take advantage of, or it may just be a case of organising your financial assets in the most tax efficient way possible, bearing in mind your unique circumstances.
The importance of getting your tax affairs in order should not be underestimated in terms of giving you valuable peace of mind and ensuring you don’t pay more tax that you have to.
2. Cost of living and budgeting
Wherever you are in the world, you need to have a realistic budget for your day-to-day spending and a contingency plan in case something goes wrong. A financial adviser can help you asses and optimise your various income streams and your assets and then help you prepare a budget for your new life abroad. This not only provides peace of mind, but it also means you will know how much you can afford to put away each month in terms of savings, etc. as well as how much you can afford to splash out on luxury items or perhaps a trip home to see relatives.
There are also always things that you don’t plan for or expect, such as legal fees, building work or an unexpected medical bill but your financial adviser can help you ensure that you’re able to manage financially should the worse arise.
3. Healthcare and insurance planning
Each country comes with its own healthcare system and insurance requirements and you need to make sure you know what these are so that you can make sure you are covered. You may need to take out private health care insurance and if that is the case, the right policy will depend on a number of factors including your age, health and history. Of course, you will probably need other insurance such life and property insurance and a financial adviser will be able to recommend the right person to speak to enable you to obtain the policies you need to purchase and which are the best policies for your situation.
4. Managing currency exchange rates
Currency exchange rates can and do fluctuate but this is something that often gets overlooked. A prolonged or profound change in currency rates can have a big impact on your savings and investments which in turn can affect your long- or short-term cash flow.
If you’re working with a financial adviser, they will be able to again recommend a trusted company about this so that you can plan accordingly and minimise the risk to your finances. This may mean holding multiple currency accounts or using other ways to safeguard your assets and oncome against damaging fluctuations.
5. Investment strategy and portfolio management
You may be wondering what the best thing to do with your wealth is when you move abroad, or you may think that your investments don’t need much thought at the moment. However, it’s important to bear in mind, that like tax, every country has its own rules about investments.
A financial adviser can assess your existing investment portfolio and strategy and advise you on the impact on this of moving abroad. There are multiple factors that may mean you need to adapt your strategy and these include:
- Re-evaluating your financial and personal goals or helping you to define these for the first time
- Assessing your capacity for risk bearing in mind your move
- Assessing the investment rules and opportunities of the country you’re moving to
- Planning for currency fluctuations
- The impact of a move on your pension
6. Estate planning
With such a big event as moving country, it is easy to forget your estate planning which includes updating your will, planning for who will inherit from you and planning for Inheritance Tax.
Once again, the country you move to will probably have different laws about wills and inheritance so reviewing these is of the utmost importance if you want your wishes to be carried out. Your financial adviser will be able to check that your estate planning documents comply with the laws of your new country and make sure your wishes are implemented in a way that ensures they will be carried out when you die. This may include recommending an international notaire/solicitor to help you achieve this.
Moving abroad is a great opportunity but in order to get the most out of your time abroad, it is so important to take care of your finances. Luckily, navigating the different rules and regulations and making the right decisions for your future doesn’t have to be overly complicated if you get some help. Knowing you are tax compliant, and have enough money, even if the worst happens is an important first step to enjoying a happy and fulfilled life abroad.
Contact Jennie Poate at: jennie@abc-eu.com to find out more and arrange a consultation.
This communication is for informational purposes only based on our understanding of current legislation and practices which is subject to change and is not intended to constitute, and should not be construed as, investment advice, investment recommendations or investment research. You should seek advice from a professional adviser before embarking on any financial planning activity. Whilst every effort has been made to ensure the information contained in this communication is correct, we are not responsible for any errors or omissions.
ABC-EU are members of Nexus Global (IFA Network). Nexus Global EU is a division of Blacktower Financial Management (Cyprus) Limited (BFMCL) and Blacktower Insurance Agents & Advisors Ltd (BIAAL). ABC-EU is an Appointed Representative of BFMCL which is licensed and regulated by the Cyprus Securities & Exchange Commission (CySEC) – Licence No. 386/20. ABC-EU is an Appointed Representative of BIAAL which is licensed and regulated by the Insurance Companies Control Service (ICCS) – Licence No. 5101
