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Abbey International Offers Guidance To Expats

by Carla Johnson, Investors Offshore.com, London

19 July 2007


Abbey International has published a guide for expats with the emphasis on how to deal with property left at home, covering financial and tax aspects as well as practical issues.

If a posting is for six months or more, says Abbey, then the issue of leaving property in the UK becomes a dilemma. If you plan to sell your home it can save a lot of worry and administration, but you do take the risk that British property prices may rise while you are away, so you might not be able to afford to get back onto the all important property ladder so easily.

If you decide to keep your property and rent it out, you might want to use a property manager to find and manage tenant, collect rents, pay out costs such as property insurance and forward your mail. Full service management companies can also be on call to deal with burst pipes and life’s emergencies that you would rather avoid, particularly if you are a long way away. These services, however, don’t come cheaply and you can expect to pay between 15 to 25 per cent of the monthly rental income in fees to agencies.

Think about the tenants to whom your home will appeal, says Abbey, and plan ahead as to when you will market it. Too late in the summer and you will miss out on families who are relocating and need to find accommodation close to schools before the start of term. Waiting until the winter months means that you will have a far smaller pool of potential tenants as few people like to move before Christmas.

If you do decide to rent out your home, any rents you receive may be liable for tax and should be declared to HM Revenue & Customs. Full details of the non resident Landlords scheme, including how to apply for tax exemption on rental income, can be found on the HM Revenue and Customs website at www.hmrc.gov.uk/cnr/nr_landlords.htm.

You will also need to let your mortgage company know that you are sub-letting your home. Check the small print on your loan contract, as some banks and building societies may charge a higher mortgage rate if your property is changing from main residential to rental use.

Insurance is also an important consideration. Some insurers will provide cover for your rental income once a tenancy agreement has been signed and it is also possible to find cover for empty properties. Whatever you do, your buildings and contents insurer should be kept informed. If you leave your property empty, your policy will be likely to stipulate that you appoint a “responsible person” living nearby to hold a key and ensure that the property shows “signs of normal occupation”. If you are renting it out, you may find that your insurer will ask you to take out a separate policy for contents cover while tenants are in.

After you have decided what to do with your UK base, you now have to think where you will live when you first move abroad. When planning your relocation, you may want to start by moving into short-term, hotel or employer-provided accommodation and then find a longer-term rented house or apartment once you know the location. Buying abroad is a big step, so only buy if you are confident that you can make a long-term commitment to a country and understand all the tax and personal implications of buying before you do so. Most expatriates live in rented property, but increasingly in areas such as Dubai, long term expatriate are now buying new flats.

First of all, think about the complexities of buying in the UK, the detail of leases, land searches, property title and then remember that you will have to face similar challenges abroad, but all in another language. If you are buying a property abroad, it is worth looking for an institution that has arrangements in place with English-speaking lawyers and surveyors, unless you are fluent in the local language. There may be tax implications if you bring any sums of money into the country where you are going to live, so it is a good idea to keep records of the inward transfer and of what you then do with the money.

Don’t forget the simple things either. It is also important to book a removal firm well in advance, and you will need to decide whether a relocation service or an international removal service will be more suited to your needs. A relocation service will help with other elements of the move, including helping you find a house or school for your children and even providing help and advice about the new culture you are moving to. An international removal service, on the other hand, will just do the basics involved with moving your possessions rather than a more complete service that a relocation firm offers.

Ask about relocation expenses – your company may be able to help or may have arranged preferential rates with a removal company. They may also have negotiated deals on temporary accommodation overseas for individuals or families in your situation.

If you are renting out your home, then you will need to set up a bank account which can be easily run from abroad. If the internet is going to be your only form of banking, then you need to pick your provider carefully, as support and functionality differ widely. Abbey International’s Internet Banking Service offers features including simple navigation, real time money transfers between accounts and a website that is clear and simple to use, giving 24/7 access to your accounts from around the world. The bank offers a range of accounts in three currencies - sterling, US dollar and euro.

The Call account, for example, might be an option for you to deposit rental income received from sub-letting your home, because it gives unlimited access to your money with no notice required for withdrawals. Alternatively, if you do not need instant access to your money, then Abbey’s Base Rate Tracker Term account – Issue 6 is currently offering 6.05% gross p.a on deposits of £10,000 or more. The rate is linked to the UK Bank of England Base Rate. The term is for a maximum of one year fixed term so your money isn’t tied up for a long period of time and the account is designed especially for expatriates. The interest paid on maturity will be credited to your account on 6 May 2008 and please note that partial withdrawals before maturity are not permitted.

Jane Matthews, Head of Marketing & Business Development at Abbey International said: “For expatriates, keeping track of their savings rates when they move abroad during periods of frequent interest rate changes can be confusing and time consuming. Our Base Rate Tracker range of products offer a clear solution to this, with a guarantee that interest rates will change within two banking days of any change in UK Base Rates. With such a transparent structure and ease of access via our internet banking service, we believe that our Base Rate Tracker accounts are one of the most attractive products available.”

Abbey International has developed a range of accounts tailored to the particular needs of offshore customers, combining competitive rates of interest with the advantage of an offshore base. Abbey International is headquartered in Jersey, which is widely recognised as one of the best regulated offshore centres in the world. Abbey International is a registered business name of Abbey National International Limited, which is a wholly owned subsidiary of Abbey National plc.


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