Planning and preparation
Financial planning for ex-pat workers is fundamentally different from that for UK-based workers. Taxation is the key point of difference, governing a plethora of decisions about savings and investments, how you are paid in the new country, even the time of year you leave the UK. Protection products like life and medical insurance can be more expensive for overseas workers because of the risk levels involved.
 

For individuals who are non-UK resident, these offer interest free of UK tax, although tax may be due in the country of residence, and they usually have a better rate of interest than their onshore counterparts. For as long as you keep your funds offshore, and so long as you don't make withdrawals while a UK resident, your money will remain free of UK tax. Keeping your money offshore can be a good option if you are planning to retire overseas. The tax position in the country of residence must always be fully looked into. Also, with an offshore bank account you have a choice of different currencies - useful if your overseas salary is not paid in sterling.

Pensions and investments  Your requirements will depend on what sort of pension provision your employer is prepared to make on your behalf while you are abroad. If the company runs a generous international pension scheme, many of your long-term investment needs are likely to be catered for. If this is not an option, you will have to fund your own provision. With offshore pension provision (which effectively means contributing to an offshore savings plan) you elect to save as much as you like in a low tax-free environment, whereas in the UK the amount you can save into a pension is capped. With an offshore "pension", you can take the money out as and when you need it, and you are not obliged to buy an annuity.

Repatriating your money For a non-UK resident offshore investment money is only taxed when you repatriate it into the UK. If you are a member of a company pension scheme, you must take care when contemplating a foreign move, as your eventual provision could end up fragmented and insufficient, especially if you switch countries frequently. To avoid the pitfalls, you should negotiate the right package up-front. Ask for a full statement of retirement benefits and check for gaps in the provision. As every country's tax system is different, so pension rules vary. Different countries have different tax concessions for their pension arrangements and this can make it impossible to repatriate your foreign scheme without repaying the tax savings.

Life assurance
If you're sent abroad by an employer, check that the company fully replaces any cover you already have in place. Remember, if you have been a member of a UK occupational pension scheme, you will probably also have had life insurance of up to four times the value of your salary. In the new country this cover may be separate from the pension.

Your existing UK policy may not extend cover while you are abroad. This should be reviewed prior to departure.

Private medical insurance (PMI)
PMI is necessary in most foreign countries and your insurer should offer you a 24-hour help line. Ideally, your PMI provider should also offer you direct settlement, preferably through a system of pre-authorisation, so that you don't get involved in long waits for reimbursement.

It's also advisable to find the most generous emergency evacuation cover, preferably one that will fly you and your family home, then back abroad again.

This is a very complex area of financial planning and we strongly recommend that you talk to us first before considering investing or working offshore. For complete Independent Advice, please e-mail or contact us.