Coming Home: 10 Financial Steps for Expats Returning to the UK

I have been living outside the UK for 23 years.

I rarely get homesick. But last weekend it hit me hard.

While I’m not packing my bags just yet, I realise that many expats eventually do.

Thinking of returning to the UK?

Prepare yourself to face a unique set of financial challenges and opportunities.

It is always best to start planning as early as possible. Here are 10 financial action points to get you started.

Residency Status

Determine your residency status for tax purposes.

The UK uses a Statutory Residence Test (SRT) to determine if you are UK resident for tax purposes.

Statutory Residence Test (SRT)Download my FREE SRT Flowchart

The UK uses the Statutory Residence Test (SRT) to determine whether you are a UK resident for tax purposes. Check your status now . . .

Open or Reactivate a UK Bank Account

If you closed your UK bank account when you left, or if it’s been dormant for a long period, you might need to open or reactivate it.

This is essential for your daily transactions, direct debits, and salary payments.

Review Your Tax Liabilities

It pays to understand the tax implications of assets held overseas and ensure you comply with UK tax laws.

This might involve declaring foreign income or gains.

If you have been living somewhere like Dubai or Saudi Arabia, it could mean crystalizing any gains before you return.

Notify Relevant Authorities

Inform HM Revenue & Customs (HMRC) about your return to ensure that you are on the correct tax code.

You can do this by completing a Starter Checklist form (this used to be called a P46).

This brings you back into the UK tax system and lets HMRC know of any income you’ve earned and tax you’ve paid.

Also, if you receive benefits or have any debts, such as student loans, make sure they are informed.

Re-establish Credit

If you’ve been away for an extended period, your credit score in the UK may be outdated or non-existent.

Consider using credit-building tools or credit cards to re-establish a good credit history.

Healthcare and Insurance

Depending on how long you’ve been away, you might need private health insurance until you re-qualify for the National Health Service (NHS).

Also, review other insurances, like home, car, and life insurance.

Pensions and Retirement

Review and consolidate any pensions you have from abroad.

Determine if transferring them to a UK pension scheme is possible or beneficial.

If you have a UK pension, make sure you understand its current status and any contributions or benefits you’re entitled to.

Estate Planning

Update or create a will that’s valid in the UK.

Assets held overseas might require different considerations, so seeking appropriate legal advice can be valuable.

Property and Mortgages

If you own property abroad, consider its financial implications, such as rental income, taxes, and whether to sell or keep it.

If you’re buying a property in the UK, understand the current mortgage market and the requirements for expats or those who’ve recently returned.

Professional Financial Advice

Consider seeking guidance from a financial advisor familiar with the opportunities and pitfalls faced by returning expats.

This can help you navigate tax implications, investments, and other financial matters to ensure you make the most of your return to the UK.

💡 Check out Return Ready Roadmap™. It is my dedicated service for expats returning to the UK.

FAQs – Expats Returning to the UK

What is the Statutory Residence Test (SRT)?

The SRT is the official UK framework used to determine whether an individual is a UK tax resident, based on days spent in the UK and various ties to the country.

Do I need to inform HMRC when returning to the UK?

Yes, you must notify HMRC by completing the Starter Checklist form to ensure correct tax coding and reintegration into the UK tax system.

Can I use my old UK bank account again?

Potentially yes, but if the account has been inactive for years, it may have been closed or frozen. You may need to reactivate it or open a new one.

What happens to foreign income when I return to the UK?

Foreign income may become taxable in the UK upon your return. You should assess whether to realise gains before becoming a UK tax resident again.

Is my overseas credit history recognised in the UK?

No, UK credit agencies typically do not recognise foreign credit history. You’ll need to rebuild your credit using UK tools and services.

Do I automatically regain NHS access upon returning?

Not always. Depending on how long you’ve been away, you might need to reside in the UK for a certain period or use private health cover initially.

Should I update my Will when moving back to the UK?

Yes, especially if your existing Will was drafted under foreign law. A UK-compliant Will ensures your assets are distributed according to your wishes.

Can I transfer my overseas pensions to the UK?

It depends. Some pensions can be transferred to UK schemes or QROPS. Review the tax and currency implications with a specialist before proceeding.

How do I prove UK address for financial services?

Commonly accepted proofs include utility bills, tenancy agreements, or official letters from government bodies. This is crucial for banking and credit.

Do I need a UK financial adviser after returning?

Yes, ideally one who understands cross-border finances. An adviser can help with pension transfers, taxes, and reintegration planning tailored to expats.

Talk to an Expert

Ross is a qualified Chartered Financial Planner and Pension Transfer Specialist.

He has been a cross-border financial adviser for 25 years and specialises in helping British expats manage their finances with clarity and peace of mind.

If you would like to have a no strings chat with him, please get in touch.

Contact Ross