Home > Retiring Overseas > Returning to the Uk After Retiring Abroad: A Case Study

Returning to the Uk After Retiring Abroad: A Case Study

By: Garry Crystal - Updated: 5 May 2010 | comments*Discuss
Returning To The Uk Retirees Tax Living

Returning to the UK after retiring abroad is a situation that many retirees have to face. Ill health, deteriorating finances and family considerations are a few of the reasons why many retirees living abroad return to the UK.

Moving Abroad during Retirement

Robert Thompson, 68 was one of the tens of thousands of Britons who move abroad every year. “I had been living in the Algarve for almost eight years since I took early retirement at 55. I loved the lifestyle, the climate, the golf, and made the decision to move there when my wife died.” said Robert. “It wasn’t too hard making the move as my wife and I used to holiday there a couple of times a year and knew other couples who had also retired there.” For Robert, the decision to move back to the UK was prompted by his daughter’s ill health.

Preparing to Move Back to the UK

When Robert’s daughter was diagnosed with primary progressive Multiple Sclerosis at 32, Robert made the decision to move back to the UK.

“I knew my daughter Grace would have good medical care but as a single parent I knew that she would need help as time progressed.” Robert owned his own two bedroom apartment in a small resort next to Albufeira on the Algarve coastline. “Selling up wouldn’t be a problem as this is a popular area,” said Robert, “but in the end I made the decision to keep the property and let it out to holidaymakers.”

Planning Before Moving Back to the UK

Letting out his accommodation in Portugal instead of selling would mean that Robert had some extra income. “The Algarve coastline is popular all year round thanks to the climate and I used a local letting agency to handle the details, “Robert said, “I thought this would be both a good income and be someplace for holidays for the family throughout the year.” On his return to the UK Robert was going to be living with his daughter and his nine year old granddaughter. “I saw my property in the Algarve as an investment and didn’t want to get rid of it. I do see it as a family home and something to leave to my family.”

Habitual Residence Test When Returning to the UK

Many retirees who move back to the UK after living abroad will have to face the government’s Habitual Residence Test (HRT). Retirees who have been living abroad for more than two years and are looking to immediately claim benefits on their return will be subject to the HRT test. “The only income I would be receiving was my pensions, which were easily transferable and the income from my property abroad, “said Robert. “As I wasn’t selling my property abroad I wasn’t going to have to pay tax from the sale such as Capital Gains tax.” But Robert did still sit the HRT and had enough evidence to satisfy the authorities.

Tax When Letting Property Abroad

Anyone who is letting property abroad and living permanently in the UK may need to pay tax on the income received. There are many considerations and tax treaties between the UK and the country abroad will be a factor. A double tax treaty between the UK and a European Union country means that income tax will be paid in both countries but the EU country tax will be deducted from the UK tax. “Tax on my property abroad could have been a minefield of red tape, which is why I placed the matters in the hands of a financial advisor.” said Robert. Robert’s bilingual accountant was able to employ a number of tax breaks such as offsetting letting agency fees and insurance costs against the taxable income.

Culture Shock When Returning to the UK

“It did take time to readjust to living back in Manchester, “said Robert, “and it wasn’t just the climate. There were a number of small changes such as registering with a new doctor and changing my will but I also had to get used to the culture again and the faster paced way of life.” Reverse culture shock affects many retirees moving back to the UK after living abroad for a number of years.

It does take time to adjust and although it seems strange, many returning retirees do feel like a fish out of water at first. “Even though I had visited many times since moving abroad I was surprised that it took time to settle back. But I did have a reason for returning, my daughter and granddaughter were something to focus on, and their welcome did make the transition a lot easier.”

You might also like...
Share Your Story, Join the Discussion or Seek Advice..
Why not be the first to leave a comment for discussion, ask for advice or share your story...

If you'd like to ask a question one of our experts (workload permitting) or a helpful reader hopefully can help you... We also love comments and interesting stories

(never shown)
(never shown)
(never shown)
(never shown)
Enter word:
Latest Comments
  • Rock an Roll guy
    Re: Clubs to Join in Retirement
    Hi I'm wondering if there's a mixed lunch group or club I'm asking on behalf of my 75 year dad
    7 December 2018
  • Rob
    Re: Clubs to Join in Retirement
    I've been retired for 6 months now and it's driving me bonkers. I use the gym every day and walk between 2 and 5 miles a day six…
    3 December 2018
  • Bella
    Re: Clubs to Join in Retirement
    I’m live in Scarborough. I’m looking for a group to do keep fit. Not to fast has I just had a operation and I’m in my year years of…
    3 December 2018
  • Jay
    Re: Clubs to Join in Retirement
    Both I and my partner are in our seventies and live in Lincoln although neither of us come from here. We have been together four…
    29 November 2018
  • Chichi
    Re: Clubs to Join in Retirement
    Hi, I m looking for a club to join . I m a retired 71 year old widow ,active in Durban area Just company to socialise feeling lonely
    28 November 2018
  • Auds
    Re: Clubs to Join in Retirement
    I live near durham city, i am married but my husband has his own interests that doesnt involve me, i would like to have a friend…
    22 November 2018
  • Betty
    Re: Clubs to Join in Retirement
    I need some social life list once-twice a week.i
    21 November 2018
  • Twiggy
    Re: Clubs to Join in Retirement
    My husband passed recently I am looking for a pensioners club or a club with various activities my husband and I ran a club for 30…
    19 November 2018
  • Bojomess
    Re: Clubs to Join in Retirement
    Messagaebfir Delly where do you live anywhere Loughborough
    17 November 2018
  • Bojo
    Re: Clubs to Join in Retirement
    I would like to join a club I’m recently widowed and moved to the Loughborough area but due to my husbands health problems…
    15 November 2018