Returning to the UK after working abroad should be a joyous and happy occasion. But get key timings wrong and your move will be no fun at all, and could hit your pocket too, says Trevor Charnley, managing director of Smart Currency Exchange, which specialises in international property purchase and relocation. For a smooth move, timing is everything.
- Ship or shop?
Start planning removals six months before you go, getting a few quotes. The more you take the cheaper it gets, with a container load across the world costing roughly £4,000 and taking up to around 15 weeks door to door.
If that seems a lot of money, consider what a new sofa and a set of bicycles for the family will cost (but do ensure there is no soil on any sporting equipment, or it could be turned away). The process for moving your possessions should start as early as six months before you plan to arrive, getting several quotes from well insured removers.
For personal possessions “for your own use” you will not be charged UK tax (“duty”). The removals company will ask you to fill in form ToR01, Application for Transfer of Residence relief. You should apply before your goods leave the UK, sending the form to HM Revenue and Customs (HMRC). They will send you a unique code to give to the shipper or removals company, who will make the UK customs declaration for you.
- Pets pose problems
A ferry trip from France or a drive from Spain or Italy with your dog or cat will cause few problems, and the pet passport scheme still operates for incoming pets from the EU. A 23-hour flight from Australia, however, requires more planning.
Most importantly, don’t get a puppy or kitten in the weeks before moving. A puppy can’t be vaccinated for 12 weeks and then you need to add 30 days for it to become effective.
- Financial security is all
Your first task will be to organise a UK bank account, which can be problematic until you have an address here. However, an account should be available that you can open from the UK subject to confirmation in person when you arrive.
Another vital job will be getting back into the UK tax and national insurance system. In general terms, if you’re moving back to the UK full time after more than a year abroad you will become a UK tax resident again. You will then be liable to pay tax on your income and gains in the UK and also on foreign income and gains.
If you are receiving an income from abroad, for example from renting out your overseas home while you settle in, movements in the exchange rate will mean that your income changes every minute, which makes budgeting very hard.
For example, rental income of $2,500 from a home in the USA per month, when it arrived back in the UK over the past year would have varied in value from £2,070 to as little as £1,770, due to the exchange rate changing. You can smooth that out by fixing an exchange rate for the year ahead with a forward contract. It will all help to add certainty to your budgeting.
- Healthcare, pensions and benefits
When you come back to the UK you will normally be entitled to the same healthcare, pension and benefits as if you had never left.
However, you will need to prove that you are here for good and that means passing a residence test. Essentially you will be asked to prove you are going to “make the UK the centre of your life” with, for example, documentation showing you are establishing a home here and severing ties abroad, such as buying a home here and selling one abroad, or similar for renters.
- Buying a British home
For many of us, returning to the UK is about re-establishing roots by buying a home you’ll come to love.
Beware on timing again, however, because if you buy a home in the UK before returning you may be classed as a UK resident before you intend to be. Do consult your tax specialist first.
Buying a property in the UK takes around two to three months on average, for all the legal processes. This poses the risk, again, that exchange rates change mid-transaction. To take the example of an executive relocating from the USA, a £500,000 British property when bought using currency converted from US dollars will have cost between $604,000 and $690,00 over the past year.
For more information, you can read Smart’s new guide, Returning to the UK.