Our guide to helping clients move abroad

Heath Reidy finds out how to help a client who is preparing to move abroad.

For clients preparing to move abroad, the ‘to-do’ checklist can seem endless. Getting their financial affairs in order can become a particular strain.

Luckily, they have a trusted adviser to help them. But what exactly can you, the IFA, do to make this process run as smoothly as possible?

Steve Carruthers, managing director of Blevins Franks, an integrated tax planning and wealth management service, says the key for advisers is understanding the jurisdiction in terms of insurance, tax and pension allowances.

You need to know what policies, such as life insurance, can continue as normal and which ones will need to be reviewed.

“Each country has its own special way of dealing with these sorts of things and you have to truly understand how the system works within the country the client is going to live. Unless you have that knowledge you will probably provide the client with the wrong advice,” he says.

Tax

When it comes to tax, Danny Cox, head of advice at Hargreaves Lansdown, says a good starting point is consulting a tax specialist.

He says it is important to know details such as at what point the client officially becomes a non-UK resident and how they should go about informing HMRC to see whether or not there are opportunities in tax gains for them.

“There are so many different tax rates and taxation agreements between the UK and other countries,” he says. “It might be beneficial for the client to make gains while they are still a UK resident because the rates of capital gains tax might be lower in Britain than the country they are moving to. But it might also be better to make those gains when the client is abroad.” 

Carruthers says it is a good idea to advise the client to choose a bank that has representation in both the UK and the country they are moving to so the client can freely move monies between their accounts at minimum cost. 

Pension

When it comes to sorting out a client’s pension, Carruthers says the golden rule is, if the client is thinking of taking a lump sum of money from their pension, make sure they take it out before they leave the UK. While it will be tax free in the UK, it may not necessarily be abroad.

With pensions in general, he says to look at the UK pension position your client is in and then compare it to a possible transfer to a Qualifying Recognised Offshore Pensions Scheme (QROP). This is an overseas pension that can provide good retirement planning, providing the scheme does not break any of the UK taxman’s rules.

However, IFAs must have a G60 qualification to legally provide any advice on QROPs.

Providing ongoing advice 

When a client moves abroad, you can continue to provide advice to them if they live outside the EU, but Carruthers says you need to think about whether or not working this way is practical. While he says having an overseas client is doable, it can be more difficult to maintain a strong working relationship with them.