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Expatriates return home for many reasons, they may have reached 60 and wish to retire in their home country, their children may be heading to university and they want to be nearby, their contract of employment may have ended or they simply have had enough of the expatriate lifestyle. There are a plethora of books and articles available regarding becoming an expatriate, but what do we need to do when we repatriate?
Moving back to the UK after a long spell abroad can be daunting, particularly as there are so many financial implications to consider when relocating. Before returning to the UK, you will need to have a thorough review of all your money matters, including what to do with bank accounts, pension schemes and how your tax position will alter.
If you have bank accounts held overseas, then you can continue to keep these as offshore accounts. However, since the introduction of the EU Savings Directive in July 2005, when you move back you will become a UK resident, and you will have to declare any interest that you earn. Any tax due on this interest must then be paid to the Inland Revenue. This means that if you are expecting any interest payments around the time you are moving, try to ensure they are paid before you come back to the UK, as tax is charged when interest is received and not when it is earned.
For those looking to retain tax-efficiency on their ravings and investments, they should consider an offshore investment bond. Not only will this 'tax wrapper' defer income and capital gains tax, if structured correctly the bond can allow you to draw a tax-free income into the UK and assist with inheritance tax planning - ideal for those looking to retire back to the UK.
When you arrive in the UK, you should request the Inland Revenue form P86. This will enable the taxman to confirm your residence status and make sure that you have the correct allowances for the tax year. An Inland Revenue spokesman said: "This form should be completed if you have come to the UK for the first time, or after a period of absence. It helps us decided your residence treatments for income and capital gains tax purposes, give you correct income tax allowances and, if relevant, review your tax domicile position. After completion, you should send the form to the tax office that deals with your tax." You can download the P86 form from the Inland Revenue website at www.inlandrevenue.gov.uk.
You will need to keep proper records when you get back to the UK, so that if you have to fill out a self-assessment tax return, you will have all the necessary information to hand. Tax returns must be submitted to the Inland Revenue by September 30 if you want the taxman to work out how much money you owe on your behalf, or January 31 if you are happy to do the sums yourself.
To make things easier for yourself when you get back to the UK, you should take out a bank account there as soon as possible, so that you have easy access to funds for day-to-day expenses.
As far as pensions are concerned, a spokesman for Lloyds TSB advised: "If you have been contributing to a pension overseas or your company has been contributing on your behalf, it is important to ascertain under exactly what circumstances it will be paid to you, and in what form. Many tax-efficient pension schemes can be arranged in the UK."
A spokesman for Age Concern said: "The UK pension is payable anywhere in the world but only people living in certain countries receive the annual pension increases. If you have not been getting these increases, your pension will be up-rated to the current rate if you return to the UK."
On returning to the UK, older people with low incomes and limited savings may qualify for income-related financial assistance through benefits such as the Pension Credit, Housing Benefit or Council Tax Benefit. Pension Credit can help with weekly income, Housing Benefit provides help towards rent, and Council Tax Benefit can reduce Council Tax payments. To be eligible for these benefits, you must be "habitually resident" in the UK, Republic of Ireland, Channel Islands or the Isle of Man. A spokesman for Age Concern explained: "Habitual residence is not defined in law and each case will be considered on its merits. However, you will be considered habitually resident immediately on arrival in the UK if you are resuming a previous residence in the UK, the Republic of Ireland, the Channel Islands or the Isle of Man. This means you will not normally be affected by the test if you have lived in the UK, moved to live in another country and then return to live in the UK again."
You should also contact the International Services department at the Inland Revenue National Insurance Contributions Office and the Department for Work and Pensions about your return move and give them your contact details overseas and in the UK.
Insurance policies will also need to be reviewed prior to returning to the UK. Contact any private medical insurance and life insurance companies with which you have policies and find out whether your plans are still suitable in the UK. You should also register with a UK GP as soon as possible and arrange for any medical records held overseas to be sent to your new practice.
Once you know where in the UK you are going to settle, you must contact the local council in the area you are moving to, as you will be liable for council tax and must also join the electoral roll.
Useful contacts: If you have a query about your pension when you are abroad, you can contact the Pension Service International Pension Centre at: International Pension Centre, Tyneview Park, Newcastle-upon-Tyne NE98 1BA United Kingdom (telephone +44 191 218 7777).
If you are living outside the UK and have questions about your National Insurance Contributions, the contact details are: Inland Revenue Centre for Non-Residents, Room BP1301, Benton Park View, Newcastle-upon-Tyne, NE98 1ZZ. If you are in the UK you can telephone the Centre for Non-Residents on: 0845 915 4811.
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