“Self-made” expats, who do not enjoy the support of an HR department, often have to cut through the “red tape” on their own. This week’s guest author, Florian, gives a few helpful pointers on what to keep in mind when you try to figure out bureaucratic issues.
Nowadays, finding a flatmate, trendy restaurants, good clubbing venues, or a like-minded community has become the easy part of the relocation process. Social media and websites are certainly responsible for this major shift (bravo, InterNations! :)).
By contrast, bureaucratic burdens remain a drag, irrespective of your destination. Despite similar past experiences in Switzerland, Italy, and the US, it took me almost one entire year before I felt comfortable with the administrative environment of my new home: London.
I was not one of these fortunate sponsored expatriates, and I had to go through this hassle alone, learning by doing, just like many students, entrepreneurs, or other adventurers.
This brief guide to relocating to the UK should not be considered a legal advice or a substitute for professional assistance. On the contrary, this is a mere testimonial, so to speak, a chapter in my life story, though admittedly, I came across many of these pitfalls through my professional practice as a lawyer.
The points below are not one-size-fits-all suggestions, but mere food for thought when you prepare your own move.
1) Immigration: The UK is a member of the European Union, and so EU citizens benefit from the fundamental freedom of movement for all people. So there is no need to apply for a visa or any permit beforehand.
If you are not a national of an EU member state, however, you will often need a visa. One word of advice: Investor visas, though quite popular and certainly an important category, are not as easy to get as some relocation companies tend to advertise them.
In any event, investor visas are quite expensive. You can simply forget about this option if you are not ready to invest at least GBP 1million.
2) Residence versus domicile: Residence and domicile are two different legal concepts.
Residence is a concept based on physical presence in the country. Residence is thus factual and objective. Local authorities can apply a statutory residence test, which takes into account both the amount of time spent in the UK and any other ties with the UK.
On the other hand, your domicile is a more subjective concept. In that regard, your long-term intentions (e.g. for staying and settling in the UK) are decisive. A wide range of evidential factors may be relevant.
Why is this important, though? It is always essential to analyse a resident’s domicile carefully, as it has an effect on their financial burden under the three main direct taxes in the UK (income tax, capital gains tax, and inheritance tax).
3) Speaking of taxes: The tax system, known for being quite harsh on high-income earners (top rate amounting to 45%), is in turn highly beneficial for individuals who became resident in the UK without becoming domiciled there.
Non-domiciled residents in the UK are entitled to a more favourable system of taxation, provided they claim what is known as the remittance basis of taxation. In this case, their foreign income will only be subject to taxes in the UK if they transfer – “remit” – it to the UK.
The advantage of the so-called “Res Non-Dom” status is well-known among the expatriate community. However, the fine prints, and the distinction between the remittance and arising basis in particular, are also an abundant source of misconceptions.
One of the most persistent urban legends I came across is that, as a “Res Non-Dom”, you do not have to do or report anything to the UK tax authorities in order to enjoy the benefit of this status – not even complete a tax return! This is completely wrong. If anybody tells you this, you should not put too much trust in their tax advice…
4) Accommodation and council tax: Any resident in the UK is subject to a council tax, levied by the local authorities (borough). Every accommodation is assigned to a so-called “band”, which corresponds to a tax range.
New residents living alone may want to notify the local authorities of their single status to get a reduction of the council tax: The default rate is usually based on a two-people occupancy.
5) Marriage and divorce: You will probably hear at some point that the UK is a good place to get married – but not to file for divorce. You should actually give some credit to this popular wisdom!
English law offers interesting possibilities and large leeway when it comes to enter into customized marital agreements. If you think about tying the knot, don’t neglect the legal practicalities amidst your whirlwind romance!
6) Succession & wills: Succession under common-law jurisdictions (like the UK) and the same under civil law jurisdictions are two completely different animals. The latter offers much less flexibility.
Thus, expatriates with a considerable fortune should consider executing several wills, covering different assets, depending on their location.
7) Doing business: Moving to the UK will also have an impact on the way you do or organise your business. It will be privotal to ensure that any foreign companies are centrally managed and controlled outside of the UK.
The reason? UK tax authorities will treat a non-UK incorporated company as being tax resident in the UK if it is centrally managed and controlled from within the UK. And tax residents – both people and legal entities – are again subject to UK taxation!
8) Insurance: The UK has developed a very sophisticated and competitive insurance market. You can have virtually every aspect of your life insured, ranging from your health to your favourite shirt, at very competitive prices.
This might explain why life insurance coverage is very often used as an efficient tax-planning tool, as a convienent way to set off inheritance tax liability upon death.
“Home is where the heart is,” or so the more romantically minded say. However, relocation to a foreign country is a life-changing event: Although those areas and aspects described above are definitely less romantic than just enjoying the ambience of a new place, they do need to be taken care of.
Once you have dealt with the practicalities, you can relax and feel truly comfy. Then your heart will also feel at home in a new country or city – especially one as great as London!
Florian Rochat is currently practising as a lawyer in London at a major law firm. He has been advising individuals and companies on business law for more than a decade (previously in Switzerland and in New York City). He also knows where to eat a decent Swiss cheese fondue in every country he has ever lived in!
(Photo credit: 1) The “Gherkin”: Florian Rochat 2) St Paul’s at Twilight: Florian Rochat 3) Routemaster Bus, Piccadilly Circus: Andrew Dunn, 2005 4) Big Ben at Dusk: Andrew Dunn, 2004 5) Underground Sign at Westminster: Public Domain)
Florian Rochat says
Many thanks for your comments and feedback! It is highly appreciated.
From my perspective, London is, in every field, a very competitive market. Thus, if you can make it in London, you can virtually make it everywhere.
On the other hand, London global market generates many opportunities, where different languages skills, backgrounds and approach are sought after. This certainly is a blessing for the job seeker coming from abroad.
The necessity to get employer’ sponsorship beforehand, for visa requirements, makes the whole thing even more challenging.
Meeting people in your line of business of industry, in other words: networking is key.
My views on what it takes to pursue a career on an international level? Read my interview in the last issue of The Lawyer magazine (www.thelawyer.com)
rajesh sharma says
Hello dear iam from India and want to work in European country but i dont have much money to go their on my own so what shoul i do ??? Please suggest me some alternativea as i have done graduation Bachelors of Biotechnology from India in 2013(year of completion).
Margit Grobbel says
In this case, it’s probably best to look into employment opportunities in the life sciences in the countries you’re interested in, and try to find a company to sponsor your visa. However, I’m afraid that I work neither in HR nor in bio technology, so I don’t have any helpful tips for the job search – sorry! 🙁
ibrahim ghareeb says
i am ibrahim ghareeb from Egypt.i am validation section head at pharmaceutical company.
i plan to get academic degree in pharmaceutical sciences from any western university especiallly in Germany or UK so i am searching for any opportunity at them.if you know any thing about getting employment sponsorship,please contact me.
thank you very much.
Margit Grobbel says
for such specific questions on local employment opportunities, please ask our members in the respective country. e.g. in the forum for London or the Germany community. Thanks!
Stefanescu Florin says
Hy i would like to ask you what i need to do to rent a place if i am an roumanian and i just wanna go in england and stay for two months or more but i don’t want to stay in the hotel? thank you verry much.
Margit Grobbel says
I think in such a specific case, it’s probably best to ask for advice in one of our expat communities in the UK, e.g. in London:
Blanche A. Nixon says
The previous rules, based on case law and HMRC guidance, will continue to apply for tax years prior to the introduction of the statutory test, including 2012/13. Individuals will, however, have the option to elect to assess their residence position for tax years prior to 2013/14 by reference to the Statutory Residence Test (SRT), for the purposes of determining their residence position under the SRT for the years 2013/14, 2014/15 and 2015/16.
Pamela Rivera Cruzat says
Nice review! Definitely I’ll consider every single advice given. Tks!