Expats Offshore Financial Planning
Andrew Coyne maps out the financial planning route the expat returning
home should take
It is often said that when buying a property the three most important
things to bear in mind are location, location and location. Similarly,
it is tempting to argue that the three most important things for
an expatriate to bear in mind when returning home are taxation,
taxation and taxation.
Expats Offshore Financial Planning & HSBC
The smart thing to do, of course, is to start planning for your return
before you leave the UK. If you have been given decent notice of your
departure it may be worth getting in touch with one of the banks which
offer ‘out and back’ schemes, such as HSBC Bank International
- formerly Midland Offshore - and Lloyds TSB bank (Jersey). The
benefit of such schemes - sometimes described by the banks as expatriate
‘clubs’ is that you will get advice on a number of areas
- including taxation - under one roof. The tax advice usually comes
at a cut-price rate from a tie-up it has arranged with a leading
accountancy firm. The bank will present you with a glossy brochure
telling you what you should do and when you should do it and give
you some general information about taxation, residency and domicile.
Expats Offshore Financial Planning & The Tax Situation
If you join up to such a service, more specific details about the
tax situation in the country you are going to will be forthcoming.
The bank will also be able to give you a financial healthcheck and,
crucially, help you to avoid the many financial pitfalls which await
if you are not prepared. Neville Benbow at HSBC Bank International
in Jersey explains that his bank’s out and back service -
which is free of charge - may well entail an appointment with a
financial planning manager in the UK as a starting point, and runs
all the way through to an expatriate’s return when onshore
accounts can be set up.
Expats Offshore Financial Planning - HSBC
Unsurprisingly, HSBC stresses that a careful review of tax affairs
is necessary. Its service can introduce clients to accountancy firm
KPMG. The bank also offers a tax fax brochure for expatriates, which
is free of charge, as are its tax fax guides covering 70 countries.
Banks such as HSBC reap the reward from the fact that they offer advice
before people leave the UK. “When people are moving abroad the
last thing they want is to set up a new banking relationship,”
Benbow says. Don’t underestimate how much there is for
you to think about. Benbow gives the fact that “you may have
to pay UK National Insurance contributions for the first 52 weeks
you are away unless there is a reciprocal agreement in place,”
by way of an example.
When a client is planning to return to the UK, HSBC would usually
suggest the closure of offshore bank accounts. “You wouldn’t
have to pay tax on income in your savings account whilst you were
overseas but you will once you are back in the UK,” Benbow
says.
Expats Offshore Financial Planning & Offshore Accounts
The timing of their closure could be crucial. If you have a large
sum in an offshore account, for example, where the interest is payable
half-yearly, you will be liable for UK income tax on the whole half-year’s
interest if you return in, say, November and the interest payment
is made in, say, December.
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