SUN, SEA, SAND & SAVING MONEY

RITISH PENSIONERS have moved to India to escape the crippling cost of retiring in THE SECOND BEST EXOTIC MARIGOLD HOTEL, and it’s a very attractive prospect, particularly as depicted in such an uplifting fashion in the hit movie.

But remember that in real life retiring overseas isn’t just about sun, sea, sand… and elephants. There are practical issues to consider as well.

As Benjamin Franklin once famously said, the two great certainties in life are death and taxes. You can’t escape either by moving abroad, but you may live a longer, happier life in a sunny climate!

You can also take steps to reduce your exposure to punitive UK taxes, says Richard Way, an expert on Britons moving overseas.

“Council tax and taxes on life’s little luxuries are considerably lower inmany expat hotspots, which means that relocating does make financial sense for many retiring Brits.” assets to your spouse when you die, and youmay need towrite a separate will. You need to tell HM Revenue and Customs that you aremoving overseas. This allows any pension to be paid without tax deducted, although it will be taxed in your country of residence instead ( provided it has a double taxation agreement with the UK).

HMRC will also tell you of any continuing tax liability you may have in the UK, despite living overseas. Any income from your UK pension or other investments may stretch further overseas, but remember, its value could rise and fall in line with currency movements.

You can still claim your State pension if you retire overseas but in around 170 countries, including India, it won’t be uprated in line with inflation. Instead, it will be frozen at the point you cease to be resident in the UK.

Many Britons are astonished to find that their State pension will be frozen in popular expat destinations such as Canada, South Africa, Australia orNew Zealand, despite a long- running campaign by expats.

Yet the State pension will be index- linked in countries with which the UK has a reciprocal pensions agreement, including the US, Israel, Jamaica, Barbados.