Pensions And Property Investment For An Expat

expat network

Pensions And Property Investment For An Expat

I am planning to move back to New Zealand some time in the future, having been in the UK already for 15 years.
I am self-employed and have no pension plan or property, so I reckon I need to get these in place with a view to taking a rental income from the UK property when I return to NZ.
Do you think these are good ideas?

Philip Teague, managing director of the expat and emigration division of financial advisers Alexander Beard Group,.took up the challenge of answering these questions.

“I can’t give very detailed answers as I don’t know a huge amount about your situation,” said Philip. “That said, here are my thoughts with regard to some the decisions you need to make.

“ First of all, property can be a good source of regular income. The points to consider are that property is very illiquid. It can take a while to get your money back out. Rental income can be at risk should your tenants leave.

“You may also find it difficult to manage a property while living in another country. However there are firms which can manage this for you. You also need to consider the tax implication of this income for the UK and NZ.

“Secondly, UK pensions are attractive due to tax relief. As you are self-employed, your company can make a contribution that would be a tax deductible expense. You personally can make a contribution of 100% of your salary (if you are salaried, up to £40,000) or a gross contribution of £3,600 including tax relief if you receive no salary. You can continue this £3,600 gross contribution for five years of non UK residency.

“If at some stage in the future, you move to New Zealand, accrued funds can be moved with you if appropriate.”

Moving Abroad Checklist

Initial Considerations

Will your partner be travelling with you?

If so, what will they be giving up in your present home and will they be able to continue with their career in your new home? You will need to check whether a separate visa is required for your partner to work or if your visa gives that right. If they are unable to work you will need to decide on the effect on your finances and what alternatives are available to give a fulfilling life (home business, training, voluntary work).

Are you taking family with you?

Moving with family raises many exciting opportunities, but also can create challenges. The HSBC Expat Explorer survey indicates that expat kids can take six months to settle in to their new country (see article). Getting young or even older children to prepare to move and leave their friends and family behind can be a challenge and should be thought through.

The options for education is another area that needs to be thought through.

Moving your child to a new country with a different education system can be a great opportunity to broaden their experience, but if they are close to key exams the timing can make this inadvisable. If you do take your family with you, it is important to decide between joining the local school system or choosing an international school.

Where will you be living?

Whether you will be living in a house or apartment, furnished or unfurnished, these decisions will affect what you need to take with you. The time you are planning to live overseas will also affect whether you should leave your property at home empty, rent it out or sell it. See the article Sell, Store or Ship.