Every year thousands of Brits pack up their belongings and move abroad. They do this for various reasons; sunnier climate, a slower pace of life, or for a better job. Amongst the many things that need consideration when moving abroad, tax is one of the most important as it will affect your income, savings and pension.

When you are thinking about the move, there are two main things that you will need to think about; residency and domicile. If you are from the UK then that is your domicile, and when you move abroad, the new country is your residence.

No matter which country you are moving to, you will be affected by that country’s tax system. Tax is complicated and sometimes confusing, however the UK has what’s known as a ‘double taxation treaty’ with many countries, which means you cannot be taxed on the same money twice. This is because if you move abroad, yet still own a property in the UK, you are still liable to pay tax if you rent it out. You won’t, however, be taxed again on that money in your new country.

If you are working abroad for a UK company, you may be able to pay a lower tax rate, but this will need to be answered by your employer and every circumstance is different. When you become a resident of your new country, you will start paying tax but of course this depends on where you move to, as in some countries you are a resident upon arrival, such as in France, whereas other countries are harder to gain residency in, such as Australia. In order to change your domicile to your new country, you will need to cut every tie you have with the UK, closing all accounts and telling the taxman that you are leaving the UK for good. This can be done by sending off the DOM1 form to your tax office.

If you are retiring abroad then you may be able to have your pension paid into an overseas account. You should also check whether your pension will go up in line with inflation - it is likely to be frozen at a fixed rate if you are moving outside of the European Union. A currency specialist, such as Smart Currency Exchange, will help you make regular transfers from the UK to your new country. If you are moving abroad to work, you will need to send your P45 to your local tax office before you leave the UK, as well as a P85 form which helps you gain tax relief or claim back any tax you are owed before you go.

If you want to keep hold of some pounds, perhaps if you plan on visiting the UK regularly, then it might be worth looking at opening an offshore account. If you plan on keeping shares in the UK, and are subsequently earning income from them, it will be automatically taxed at source.