With the global financial situation seemingly impacting each and every one of us, we thought we should impart some essential offshore banking advice for expats and would-be expats today.

For example, is the offshore world a shelter from the current fiscal turbulence and credit crunch, should you open an offshore bank account to avoid currency problems such as the falling dollar or the strengthening euro, and what advice should you take before you leave the UK and go and live abroad?  All these questions and more are answered below…

As a would-be expat you need to keep in mind that the number one reason why expatriates fail to make a go of a new life abroad is because of financial issues.  Therefore, you need to ensure that you have a realistic financial plan in place before you relocate that can weather the likes of the current global financial downturn.

Getting financial advice before you go is a good idea.  You need to ensure you have got all your fiscal affairs in order, that you have a realistic idea of how much your relocation is going to cost you, what your new day-to-day cost of living is going to be like and that the job you are going to do or the pension income you are going to receive will bring in enough each month to allow you to live comfortably within your means.

Additionally, expats who have relocated are advised to seek financial advice once they are living abroad as well – this is because certain expats can take good advantage of the wealth of offshore savings and investment schemes that there are available.  What’s more, once you have been non-resident in the UK for a certain period of time, you lose out on the tax saving advantages of placing money in pensions or ISAs and so it can make sense to explore what other alternatives are available to you such as QROPS – Qualifying Recognised Overseas Pensions Schemes.

When it comes to

Those who are moving abroad will find that keeping a bank account open ‘back home’ in the UK allows them to keep paying any mortgage in the UK or bill or standing order that they have committed to that much more easily.  What’s more, a UK bank account is essential for anyone who may one day repatriate because it helps to keep some form of credit history open and it will help the individual in question when it comes to proving their identity for getting anything from a new mobile phone contract to a rental contract on a property back in the UK.

The one thing to bear in mind is that anyone hoping to lose their British domicile status for inheritance tax purposes is generally not advised to keep a UK bank account open.  But remember, everyone’s personal circumstances are different and professional advice should be sought on a case-by-case basis to determine the most advantageous course of action.  This article does not constitute advice.

Finally, the main negative impact that the current global financial situation is having on expats and would-be expats is that they are finding it harder to raise international mortgages or even UK mortgages to buy property abroad.  Other than that, offshore banking is not impacted and there doesn’t seem to be an increased trend of expats moving money offshore.  There are certain currency advantages that expats with pounds sterling in their bank account can take advantage of however, such as buying real estate in dollar based economies.  But then a currency advantage today can be a currency disadvantage tomorrow!

So, the main advice for expats is get your finances and financial perspective in order before you move abroad and think twice before you cut banking ties with the UK.