If you’ve moved to a new country, the first thing on your mind is probably where to keep your cash, how to pay tax, and whether you can still save tax‑free. Good news – you don’t need a finance degree to sort it out. Below are the basics that every expat should know, from opening an ISA to handling cross‑border taxes.
A lot of expats wonder if they can still use an Individual Savings Account (ISA) while living overseas. The short answer: you can, but the rules are strict. You must be a UK‑resident for tax purposes or a Crown employee posted abroad. If you qualify, the ISA works the same way – your interest, dividends, and capital gains stay tax‑free.
First, check your residency status with HMRC. If you’re classified as a non‑resident, most banks will close your existing ISA and won’t let you open a new one. However, some specialist banks and offshore platforms accept non‑resident clients, especially if you’re a UK citizen. Look for providers that specifically mention “expat ISA” or “non‑resident eligibility” in their terms.
When you find a suitable provider, you’ll need proof of identity, a UK address (even a former one works), and your tax identification number from the country you’re living in. The application usually takes a few days, and once approved you can start contributing up to the annual limit (£20,000 for the 2024/25 tax year).
Tax can feel like a maze, but breaking it into three steps helps: know where you’re taxed, claim reliefs, and keep records.
Step 1 – Determine your tax residency. Many countries use the “183‑day rule” to decide if you’re a resident. If you’re a UK tax resident, you’ll still owe UK tax on worldwide income, though you may qualify for the foreign‑earned‑income exemption or double‑taxation agreements.
Step 2 – Claim reliefs. The UK has treaties with over 130 countries. These treaties prevent you from paying tax twice on the same income. For example, if you earn rental income in Spain, you’ll pay Spanish tax first, then claim a credit on your UK return.
Step 3 – Keep good records. Save payslips, bank statements, and any foreign tax receipts. Using a simple spreadsheet or a cloud‑based accounting app makes it easy to pull the numbers together when it’s filing season.
Don’t forget the deadline – UK self‑assessment returns are due by 31 January each year. Filing early gives you more time to sort any unexpected tax bills.
Beyond taxes, consider currency risk. If you earn in euros but keep savings in pounds, exchange‑rate swings can eat your returns. A low‑cost multi‑currency account lets you hold, spend, and convert money when rates are favorable.
Finally, stay aware of local banking rules. Some countries limit the amount you can transfer out each year, or require extra verification for large deposits. Speaking with a local accountant who knows both UK and host‑country law can save you headaches later.
By following these steps – checking ISA eligibility, understanding residency, and keeping clean records – you’ll keep more of your hard‑earned money and avoid costly surprises. Expat finance isn’t rocket science; it’s just about knowing the right questions to ask and where to find the answers.
Thinking of moving from the UK to the US with an ISA in your name? This article breaks down what actually happens to your ISA, what you can and can't do, and the tax traps to avoid. Learn how US rules clash with UK benefits and what steps you need to protect your money. Get real-life tips that make it easier to make smart choices about your ISA. No complicated jargon, just practical stuff you should know before booking that flight.