The last thing you want when you move abroad is a tax bill hanging over your head, or that of your heirs

Where your assets are concerned, forward planning is the most important factor as it will give you the freedom to explore your options and plan your strategy, but remove the need to rush or risk coming up against any tight deadlines.

Louise Somerset, head of tax at Royal Bank of Canada advises that, above anything else, Brits should sit down and work out the implications the move will have upon their UK assets, preferably about four months in advance of their moving date. This allows for the most effective planning and to come up with a strategy they are one hundred per cent comfortable with.

Unfortunately a large proportion of expats believe that even though they are living in one country, they will always be taxed according to UK law. This is true of IHT as if you are UK domiciled then you will always be so unless you take steps to renounce it, however CGT and any taxable income (of which both countries may take a slice) will be relative to your circumstances.

Firstly you need to establish which assets you are keeping, for example the family home in the UK, which you plan to sell and which, if any, you plan to transfer to family members or an offshore outlet.

Somerset advises: “For example, if you have a trust for your children it will be automatically exported unless you stipulate otherwise – something which is likely to trigger capital gains tax (CGT). In this case it is worth considering whether you plan to put the assets into a foreign vehicle, sell them, or appoint a trustee in the UK.”

Senior technical manager at HSBC Bank International, Robert Sheasby also adds: “Tax liabilities can possibly be mitigated on investment portfolios through the use of wrappers such as life policies or sub fund structures, housing a personal portfolio within an offshore umbrella fund. Trust structures and offshore company formation can also be considered in certain circumstances to shield locally situated property from capital taxation.”

However don’t deal with property or larger investments and put the blinkers on as dividends from smaller shares and interest from deposits or savings may be subject to local tax if brought out of the UK.

While most expats are aware of and plan for their tax liabilities in one country, a lot of the time they will completely ignore their ties to the other. This can become an bigger issue for capital gains tax and income tax if not correctly planned for, however if choosing to ally yourself with a different domicile then it’s important you understand that the British laws governing tax are quite lenient in certain areas when compared to those of other European countries.

Taking Spain as a specific example, Spanish laws decree that in the event of your death, your property, if jointly owned, will pass wholly to your spouse who must then pay tax on your 50 per cent share. This is not all as, according to Somerset: “One of the main issues with IHT is that of forced heirship, which is common for a number of European countries. Residents are obliged to hand a certain proportion of their assets over to their children and they cannot pass directly to their surviving spouse, regardless of their wishes.”

This system is somewhat simplified in Britain as assets will automatically transfer over to the surviving partner following the death of one, and if not will be dependent on a Will. In addition, there will only be tax on the portion of the estate which is valued over the £300,000 nil band rate – however this can easily be mitigated against by making use of the free asset transfer allowed under British laws between married couples.

Tax needn’t be something Brits actively avoid dealing with in the hope that it will sort itself out. There are many ways to cope, one option being to speak to an independent tax adviser and another being to go through the channels your bank opens up to you.

All offshore banks offer tax-planning services, although the level of service expats receive depends entirely on the type of banking system they have in place.

Offshore private banking allows individuals of high net worth direct access a range of tax planning services they would not automatically get with standard offshore banking, alongside wealth management, savings, estate planning, and trusts.

This is not to say that standard offshore banking does not provide an adequate service, just that private banking offers expats an bespoke one-stop-shop for all their financial needs, whatever these might be.

Certainly HBSC Bank International offers their offshore customers a means to sort their tax out, or what Sheasby calls a “holistic financial planning review” with an Independent Wealth Manager. One of the main differences is that the Wealth Manager is able to give advice and recommendations to the expat, however it is then the customer’s responsibility to act on it. Private offshore banks will have advisers who are ready to dedicate themselves to your individual predicament from start to finish.

It is also advised that expats make a separate Will in their new country of residence, additional to any already in place in the UK, governing the assets which are held within that particular country. The UK assets may also be included in a British Will to be doubly sure. This will provide expats with a tax ‘safety net’ as there can be issues with both the translation and legalities of a British Will when abroad.

Sheasby concluded: “Wherever local rules permit, we will always recommend that offshore investments are held in a Jersey nominee arrangement as the local probate process allows for a locally written will to fast-track the system. This means that the right money can be put in the right hands at the right time, often within a couple of weeks of an application being made to the Royal Courts.”