Are you a British citizen currently living abroad and considering moving back to the UK? With all the political, social and economic upheaval of the last few years, it’s understandable if you’re one of the many British expats returning to the UK or considering doing so in the next few years.

There’s a lot to consider when moving across borders, from the physical relocation to dealing with tax rules and financial planning. We’ve put together this guide for the major changes you will need to prepare for.

Will I be allowed to move back to the UK?

British citizens have the right to return to live in the UK, although it can take several months to re-establish entitlements such as free NHS care, benefits and housing. You’ll need to arrange to pay UK tax on your income and other earnings once you resume UK residency.

Before returning home permanently, you’ll need to make sure that you still have access to the income and pensions that you live on abroad. You'll also need to make sure you can transfer your assets back to the UK. You'll also need to check whether you can transfer insurance policies or whether you'll need to secure new cover as a UK resident.

It’s worth getting your finances in order in the current UK tax year before you intend to move to take advantage of tax savings. By planning ahead, you can ensure any savings or assets you've accumulated whilst living abroad are sufficiently protected.

Financial considerations

There are many financial considerations for British expats returning to the UK, from understanding tax status to repatriating funds and managing property ownership.

Arrange a UK bank account

If you didn’t keep a bank account open in the UK when you moved abroad, you’ll need to open one before you return so you can start transferring funds into it before you get back.

If you’ve been out of the country for many years, you may find that your old bank account has been closed due to inactivity and that you now don’t have enough of a recent credit history to be eligible for services like overdrafts, credit cards or loans.

You might also want to close any non-UK current and savings accounts so that any accumulated interest on these is not taxable on your return to the UK. Consider the effect the exchange rate will have on your money when converted back into pounds sterling, and bear in mind that many banks' exchange rates are considerably less competitive than using a currency specialist when converting your foreign currency.

Notify HMRC of your return

As a British citizen moving back to the UK, you may need to register your return with HMRC. You’ll need to complete a self-assessment if you are self-employed or have other income such as money from renting out a property or income from savings, investments and dividends.. Make sure you’re aware of the relevant filing deadlines for tax returns. If you have lived outside the UK for more than five years, you’ll be subject to different tax liabilities for income and capital gains.

Sell overseas assets

If you own assets abroad like property and cars, you'll need to decide whether you want to sell them before you return. You may also want to restructure your assets to take advantage of tax efficiencies and limit capital gains tax on the sales.

It's also wise to consult a tax expert before you leave. They can inform you of any rules or legislation that may apply to you as a returning British expat. It's also a good idea to use a foreign exchange specialist when transferring the proceeds of a sale. They will guide you on any FX tools you can use to make the most of your money, such as a forward contract, which lets you lock in a favourable exchange rate to then be used at a later date.

Update pension details

If you receive a UK pension while a resident overseas, you’ll need to contact the International Pension Authority to let them know you’re returning to the UK. You should also notify your local government’s social security agency, such as the Department for Work and Pensions (DWP) so they can update their records.

The UK State Pension you’re eligible to receive is based on your National Insurance contributions. If you have paid into a private pension, you'll receive that too, all of which is taxable if it goes over a certain threshold.

Property in the UK

Whether you own property in the UK that you currently rent out, or if you need to buy a new property on your return, making arrangements for where you will live on your return comes with important considerations.

Compare mortgages

When buying a new property in the UK, a British citizen returning to the UK can face challenges as most mortgage lenders only lend to applicants who have had a UK residential address in the past three years. You’ll need to research and compare offers for expat mortgages.

Expats can arrange repayment and interest-only mortgages, with rates depending on individual circumstances.

Seek professional advice

If you are planning on buying a new property in the UK, you’ll need to consult an expert who can advise you on the most tax-efficient way to manage the purchase. As establishing a home in the UK is one of the main determining factors for UK residency, a specialist expat financial advisor can advise you on the timing of the purchase.

Healthcare

It’s essential to ensure you’ll have access to healthcare on your return to the UK, especially if you need treatment or medication.

Transfer medical records

Before leaving your previous country of residence, arrange to transfer copies of your medical records from your local healthcare provider to the UK, written in English. You should also ensure you have enough medication to tide you over until you can register with a GP.

Register with the NHS

If you are an expat returning to the UK, you'll need to register with a GP near your home. You’ll be required to provide proof of your eligibility to receive free non-emergency NHS healthcare, which will include supplying evidence of UK residence and employment status.

Other things to consider

There are many other tasks you'll need to complete ahead of your return to the UK, including applying for visas for family members, securing a place for your child in a local school or nursery, exchanging your overseas driving licence for a UK licence, and re-joining the electoral roll.

School enrolment

If you have school-age children, contact your local education authority and local schools to secure them a place. You may want to time your move back to the UK so your children can start school at the beginning of a new term or academic year.

Arrange visas for family members

As of 29th March 2022, all UK citizens moving back to Britain with non-citizen family members need to arrange a valid family visa before arriving in the UK.

Clear Currency can help with your foreign exchange needs

There are many financial considerations for returning UK citizens. Transferring money into the UK from abroad can be complicated. Your funds can be affected by currency exchange rates and transfer fees and subject to income or capital gains tax, so planning is essential to protect your assets. Clear Currency specialises in helping people to mitigate currency risk and save more of their money when making international payments.

A Guide for Expats Returning to the UK after Living Abroad