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 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

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

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.