It is becoming a real worry amongst people who may have to move abroad for work after Brexit as to how their tax situation could change. Relocating is financially more complicated than you may have bargained for. This is made worse when it may not be your choice to move.
Many of the large banks such as Goldman Sachs, Morgan Stanley, BNP Paribas, Deutsche Bank, Citigroup, UBS and Morgan Stanley are all considering moving to Europe. This could affect 5,000 finance jobs alone.
By moving away from the UK it doesn’t mean that you are no longer subject to UK taxation. It is not a clean break when you move and this is often misunderstood by many.
Certain taxes are still going to apply such as Inheritance tax. This is currently at 40% once you are above your nil rate band and therefore a large tax. If you plan to keep a property in the UK and then buy abroad this could add to the problem as you increase the value of your estate.
If you wanted to rent your property in the UK whilst you are sampling your new life abroad, then tax will be payable on UK income, so your rental income will be subject to tax.
Bearing in mind that a good proportion of people moving abroad may not have planned to do this of their own accord, it is unlikely that they would like to sever all ties with the UK to avoid paying UK taxes as we tend to like to keep our options open and may wish to return to the UK in the future, possibly to retire.
There are further considerations such as logging your time spent in the UK. You may well be called on by HMRC to prove how many days you have spent in the UK in a tax year. This can be wholly frustrating. If you spend more than the allowable time of 90 days in the UK or working for more than 30 of those days you could trigger a tax charge.
Over and above the tax situation, there are other considerations such as how the move will affect life assurance policies. Moving to a different country could mean that you don’t have the protection you need as your life assurance policy could become invalid. New Wills and Power of Attorney will also be needed to cover your assets overseas.
It’s fair to say that should you be one of those affected by a move abroad, either through work or because you have chosen to do so, you should seek professional financial and tax advice at your earliest convenience to avoid falling foul of the rules.
This information is provided strictly for general consideration only. No action must be taken or refrained from based on its contents alone. Accordingly, no responsibility can be assumed for any loss occasioned in connection with the content hereof and any such action or inaction. Professional advice is necessary for every case. Based upon our understanding of UK tax law at July 2018. The value of investments can fall as well as rise and you may not get back the full value of your investment