If you're an expat returning to the UK after a stint abroad, planning ahead is key, particularly when it comes to handling finances, knowing how taxes will work and finding a place to live.
Whether you’re coming back after a few years or planning your return as a retired expat, this guide will help you keep track of the main things you need to consider for your return to the UK.
Why expats are returning to the UK
Of the 1.2 million people migrating into the country in the year up to June 2024, around 5% were British nationals according to ONS figures.
There are several reasons why expats decide to return to the UK, each of which can affect the things they need to be thinking about when they come back. Perhaps you are thinking about returning to the UK due to the following:
Reconnecting with family and friends: For many expats, returning home is an opportunity to reunite with loved ones. Recent events such as the Covid-19 pandemic have boosted this desire amongst expats.
Brexit making it harder to live abroad: Brexit has had a significant impact on British expats living in the EU. In particular, UK citizens now generally need to apply for a visa for ‘extended stays’ – i.e. longer than 90 days. This in turn can have an impact on job opportunities and other benefits abroad.
Pursuing education opportunities: Some expats may return to the UK to take advantage of the country’s strong educational institutions, either for themselves or their children, particularly as they grow older. According to World Population Review, the UK ranks 12th in the world for its educational systems.
Accessing health benefits: The UK’s National Health Service gives people living in the UK access to free healthcare and prescriptions, which may not be available elsewhere.
Work and career reasons: Other expats may choose to return due to better career prospects in the UK, or simply the desire to be closer to home while pursuing professional ambitions.
Understanding these motivations is important when planning your return, as they could influence the decisions you make on finance, logistics and so on.
Financial considerations for expats returning to the UK
Handling your money safely and securely is one of the biggest factors to consider when returning to the UK. Here are the main things you need to be thinking about.
Getting a UK bank account
If you don’t already have a UK bank account, you’ll need to open one to handle your finances. Compare accounts to find the best options, but bear in mind the specific requirements you need to meet when opening your account (for example, you may be required to give proof of address in some cases).
Comparing money transfer providers
Transferring money from abroad used to be tricky and expensive, but there are now a number of specialist providers that can help you to move your funds quickly and securely, while avoiding hidden fees charged by high street banks. You can compare money transfer providers using our free tool, or check our company reviews section.
Transferring your pension
If you’ve been contributing to a pension scheme while abroad, you may need to reassess your plan going forward. Meanwhile, if you are a retired expat returning to the UK, you’ll need to look at how your international savings, investments and pension funds fit into your new financial situation. Find out how you can transfer foreign pensions into the UK with our handy international money transfer guide for pensions abroad.
Adjust for cost of living
The cost of living in the UK may have changed since you left, so it’s essential to account for any differences in housing, utilities and general expenses. Planning and budgeting for these changes can help you avoid financial stress.
Legal and administrative matters
Moving back to the UK involves several legal and administrative steps that you should pay attention to, as there could be penalties if you are caught out:
Visas and immigration
If you’re a British expat returning to the UK, you may not need a visa, but non-British citizens should check their immigration status and ensure that they have the correct documentation. For expats returning to the UK after living in the EU or other countries, make yourself aware of any changes in residency requirements.
Tax implications for expats returning to the UK
Tax can be a bit of a challenge for returning expats. Your tax residency status will affect how your income is taxed when you return, and you may need to file a tax return. Understanding your tax obligations is key to avoiding penalties. You should review UK tax laws on foreign income and gains, and make sure you are compliant with HMRC’s requirements. Learn more about the tax implications for expats returning to the UK here.
Healthcare
Register (or re-register) with a GP and understand your entitlements under the UK healthcare system. According to UK government rules, you will need to prove that you’ve returned to the UK to live and that you meet the ordinary requirements for residency. Think about whether you need private insurance to bridge the gap until you’ve reactivated coverage.
Housing and accommodation
Before you move, it’s a good idea to think about whether you want to rent or buy a property. Depending on how the market is performing, it might make more sense for you to rent first until conditions for buying become more favourable.
If you have property abroad, decide whether to sell, rent or keep it. Each option has pros and cons but again, it depends on your long-term goals.
If you plan to come back to the UK permanently, it might make more sense to sell up, though be aware that any profit from your sale will be subject to Capital Gains Tax. If you decide to rent abroad, this could provide a steady income but you’d need to make arrangements for managing the property while you aren’t in the country.
If you already own property in the UK, you should make yourself aware of any changes in property taxes or ownership rules. It may be beneficial to hire a financial advisor to work out the best course of action.
Career and employment
If you are not a retired expat and are looking to re-enter the jobs market in the UK, this can be incredibly exciting, but also daunting. Here are some things to remember.
You may already have researched the UK jobs market and identified opportunities in your chosen field, but if not there are plenty of online aggregator sites for job postings.
You can use online websites that cover a wide variety of opportunities, such as Indeed, or more specialised websites such as Welcome to the Jungle, which focus on roles at tech companies or startups.
Make sure you update your Linkedin profile and CV to reflect the scale of your international experience. Chances are your network of contacts (both professional and personal) in the UK will have gotten smaller, so think about attending networking events and engaging with groups on social media to help ease your return to work.
If you are looking to start or transition a business to the UK from abroad, make sure you understand the rules for doing so – particularly regarding self-employment, taxes and licences – as these might be different to those you are used to in another country.
Compare providers to send money to the UK
Returning to the UK, whether for personal reasons or to retire, can be a logistical headache, but it doesn’t need to be. By preparing ahead of time and understanding the key challenges you may face, you can ensure a successful and seamless reintegration into life in the UK.
One area where we can help is ensuring that you are able to transfer your funds across borders smoothly. We can help you avoid costly fees and long delays and get the best possible provider to suit your needs. Compare money transfer providers now.
