When moving abroad, to begin living an expatriate life, there are many elements that British expats need to consider before making the transition, writes Stuart McCulloch, head of market Middle East at The Fry Group.
In the midst of finalising any new working and living situation in the Middle East, here are some of the key areas we highlight to clients before making a move:
- When relocating to the Middle East, British citizens will likely no longer be part of the employers’ pension scheme. It is therefore important to look at allocating a monthly sum into an investment portfolio that’s right for you. This will allow you to enjoy savings that have also been able to compound over time, enabling you to reach your financial goals and a comfortable retirement;
- When picking an investment platform and financial planning firm while living in the Middle East, consider how your chosen investments will work for you if you eventually return to the UK ;
- Ensure you let HM Revenue & Customs know when you started your non-residence period; for the purposes of UK income tax, this will ensure you aren’t taxed in the UK for income earned overseas;
- If you decide to rent out your UK property, you will need to report the income. If you sell your UK home, you may still incur some form of capital gains tax (CGT) and a CGT tax return will need to be submitted within 30 days of the sale;
- When considering health insurance for you and your family, it is important to determine if your cover extends to your family as well as yourself, or if this is something you need to pay additionally for. Your life insurance may also be affected by your move to the UAE and therefore worth determining any changes before moving;
- Ensure your Wills are up to date and establish a UAE Will should anything happen to you or your family while living in the area – seeking professional advice on this is important;
- If your child (and we assume you) has lived overseas for some time, there is no guarantee of securing home fee status in a UK university. There are no hard and fast rules and each university is left to make their own decision but if you have maintained ties with the UK, providing evidence of this could be key.
Meet the Gardeners
James and Elanor Gardener moved to Dubai following an offer James received from his current employer. The opportunity included a move overseas to experience the Middle East market and the chance to take on a more senior position.
James and Elanor are both lawyers, working full time and obtained positions with firms located in the Dubai International Financial Centre (DIFC).
They have two children: Harry (19) and Sophie (15). Harry remained in the UK as he was in his second year of university, while Sophie came with them to see out her final three years of school in Dubai.
In the lead-up to the move, James received support from his employers who covered his flight costs, and heavy cargo allowance for the household items they wanted to ship. He was also offered hotel accommodation for the first two weeks of his time in Dubai while he found a permanent home for the family.
Elanor was starting a position with a new firm and therefore did not receive any moving benefits through her new employer. The Gardeners were thankful that many of their moving and initial accommodation costs were taken care of by James’ employers.
School and university fees
Prior to the move, Elanor and James also had to consider schooling for their daughter and the costs they would have to factor in.
In Dubai, there are no state-funded or grammar schools as there are in the UK and therefore, they needed to do their research and factor in the yearly costs of the top schools in the region.
On average, for the good schools in Dubai, they would look to pay around AED100,000 per year (£21,230, $27,223, €24,675).
The plan is for Sophie to return to the UK when she completes her schooling, at which point the family may be subject to international university fee rates.
Property considerations
When leaving the UK, James and Elanor made the decision to rent out their property.
To pay the necessary tax, they were required at the end of the tax year to complete a self-assessment based on the value of the income received from the property.
Upon becoming non-resident, they informed HMRC of their non-resident status so that they received the rental income without the deduction of UK tax which was then later be paid (if required) through the self-assessment.
Within their first few weeks in Dubai, the family viewed villas and apartments in various locations, and James and Elanor calculated their monthly rental commitment and the additional consideration that many Dubai landlords would require six or 12 months rent upfront.
With no housing allowance from their employers, James and Elanor had to factor these yearly costs against their other outgoings.
James and Elanor decided to take advice on Wills.
They created Wills for both countries where they have assets including their UK home and other assets as well as their overseas investments.
This article was written for International Adviser by Stuart McCulloch, market head of Middle East at The Fry Group – the company was recognised as the best overall adviser firm at the Best Practice Adviser Awards, hosted in partnership with Quilter International
Wilfred T. Fry (Personal Financial Planning) Limited, trading as The Fry Group (DIFC Branch) is regulated by the DFSA.
Disclaimer: The information within this case study is of a general nature and should not be deemed as advice.’
