Working Abroad - 10 mistakes made by expats

Ten Worst Mistakes Made by Expats:

Gavin Pluck, European director at Guardian Wealth Management, warns of the 10 worst mistakes people from the United Kingdom make when moving abroad:

• People often underestimate the cost of living in a new country by assuming the cost of essentials in a new country will be comparable to those in their country, but countries like Switzerland can be far more expensive than the UK.
• Likewise, correctly estimating moving costs means taking into account foreign exchange rates, as well as fixed and one-time costs such as legal fees, expenses for purchasing and renting property, and local administrative fees and taxes.
• Being in new, exciting surroundings may lead to overspending to take in the new cultural experience, without keeping enough funds on hand for emergencies.
• To meet financial obligations retained in the UK, expats need to factor in exchange rate fluctuations, and should try to obtain a six- to 12-month fixed exchange rate when possible.
• It is equally important to understand the local tax system and how taxes will affect the family budget. An experienced international financial advisor can help develop a sound financial plan.

Other important legal and financial considerations include:

• Updating wills that will be recognized in the new country of domicile.
• Setting up an overseas bank account to avoid excessive bank charges for domestic payments.
• Informing the HMRC by completing Form P85 to avoid having to pay taxes in both the UK and the new country of residence.
• Life insurance policies should be checked and updated to be sure they provide coverage outside of the UK.
• National insurance contributions to pensions set up in the UK must either be maintained if planning to return later in life, or an alternative pension plan should be set up.

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