Investing while living abroad: 5 key considerations

Living abroad can offer some unique opportunities. As well as providing the chance to enjoy a different lifestyle to that in the UK, becoming an expat or spending time overseas can open up other investment opportunities. If you are living overseas, or planning a move, these key considerations are important to bear in mind.

  1. Currency risk & repatriation

Living overseas can leave you at the mercy of fluctuations in currency markets, particularly if you are investing, planning to buy an overseas property or need to maintain payments back in the UK which may involve regularly receiving or sending money internationally. You might also be receiving money regularly, such as a pension, or rental money from a property you own in the UK. As these will be paid in GBP you’ll need to make sure that their value doesn’t decrease due to changing exchange rates. There are steps you can take including using a dedicated currency service, so it’s worth planning your finances ahead and taking advantage of forward contracts. Do also note that some British banks may not be happy to continue to hold your account if you live overseas due to new Brexit rules. It’s important to do some research to understand your options. The same is true if you are returning home after time abroad and moving investments or funds back into the UK.

  1. Expat-friendly financial organisations

It can be extremely useful to work with a specialist financial adviser, who is used to dealing with expats. Living abroad means that all aspects of your finances could be more complex, due in part to regulatory differences and the wide range of financial products available. For example, you may need a Will both in the UK and in the country in which you are living to protect your assets properly. As a result it’s important to work with a financial adviser who has good oversight of the different tax and financial issues which can arise if you’re living and working overseas.

  1. Research tax implications

The UK tax implications of living overseas can be complicated. Careful planning is important to help ensure you’re paying the right UK taxes, and making the most of the financial opportunities available to you as an expatriate. The key factors to be aware of concern your residence and domicile status. These determine how your UK tax is calculated so it’s important to speak to an expert, and work out your exposure to different forms of UK tax. For example, living overseas may mean that you don’t need to pay UK Income Tax but you could still face Inheritance Tax on your worldwide assets, including any overseas property.

  1. Utilising a global portfolio

It’s no surprise that a global approach to your investments can give your portfolio much broader scope. Ultimately extending your horizons gives you a chance to browse across all asset classes; not just those in your country. You may have more opportunity to vary your investments and take advantage of growing markets. It can feel daunting, but consider the options of a global portfolio in the context of some of the most popular stock market indexes – the FTSE All Share Index tracks around 600 companies whilst the FTSE Global All Cap Index gives exposure to 7,200 companies. Greater diversification can enable you to create a more robust portfolio and make the most of your global viewpoint.

  1. The role of property in your portfolio

Many British expats choose to hold onto a UK property whilst living overseas. Keeping hold of the family home can enable you to generate an income by renting it whilst you’re living abroad, and there are some schemes such as the Non Resident Landlord Scheme, which help you to do so tax-efficiently. Holding onto your UK home also ensures that you have a base to return to when and if you choose to come back to the UK. But property can also have a wider role as part of your portfolio; in fact holding property (whether it’s in the UK or overseas) as part of your investment portfolio is a pretty attractive option for many people especially as it provides a much more tangible asset than stocks and shares. Property can also act as a buffer against stock market volatility, rising interest rates and inflation.

Expat investment portfolio management from The Fry Group

Over the years we have worked with thousands of people living abroad to help build investment portfolios and manage them over the long-term. Our intention is always to create long-term trusted relationships so that we understand your requirements, and offer professional, transparent advice which best suits your individual circumstances wherever you are in the world, get in touch to find out more.


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