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

Title:
(never shown)
Firstname:
(never shown)
Surname:
(never shown)
Email:
(never shown)
Nickname:
(shown)
Comment:
Validate:
Enter word:
Topics
Latest Comments
  • Vinwake
    Re: Learning for Free in Retirement
    I am looking for somewhere in East Anglia where I can study A level English as a retired person. I need a tutor to provide…
    13 September 2019
  • Graeme
    Re: Travel Concessions for Over 60s
    I’m 64, and have just moved to a village outside Cambridge. Do I qualify for discounted bus travel in Cambridge?
    3 September 2019
  • Gordon
    Re: Clubs to Join in Retirement
    My friend is allowing me to use her email for contact. I’m feeling isolated due to my age and have been sick, which has kept me…
    3 September 2019
  • LIZ
    Re: Clubs to Join in Retirement
    Hi. There must be a few people,late 60s -70s living in or near the market town of Diss Norfolk who would like to meet new…
    31 August 2019
  • EAW
    Re: Clubs to Join in Retirement
    I will be moving to South Derbyshire in a few months.Retired I would like to find like minded people to socialise with.Maybe…
    25 August 2019
  • Franio
    Re: Clubs to Join in Retirement
    I am a recently bereaved male aged 77 and would like to be acquainted with a meet-up club in my area (Droitwich / Bromsgrove…
    19 August 2019
  • roberto69
    Re: Clubs to Join in Retirement
    i am a 70 year old very young man looking for friendship aand maybe more i am from aberdeen in scotland i hope you can publicise this
    17 August 2019
  • Magobsie
    Re: Learning for Free in Retirement
    I'd like to have a place that could be my sponsor in teaching me cake baking, even wedding cakes. I'm staying in Pretoria and…
    7 August 2019
  • Sunbeam
    Re: Clubs to Join in Retirement
    Hi, I'm a early retiree at 56 years old and my husband is 61 years old and been retired for 18 months. We would like to meet new…
    2 August 2019
  • Ronnie
    Re: Clubs to Join in Retirement
    I am a young 67 year old female who has just moved to Liverpool. I am retired and looking to meet new friends. Are there any clubs…
    31 July 2019