Retiring Abroad, options?

Johnny_Doe

The idea was to find a country with cheap property to release equity in my UK property (no mortgage) which would increase cash savings/pension considerably so living in both UK/France isn't really economically viable. 

Also the question on tax payable in France - in the UK I was hoping to completely or vastly reduce my tax liability by taking the 25% TFLS and then staying under the tax free threshold, and topping up income via ISA's/Cash.. 7.5% tax on the entire pension would fare worse than the potential tax free uk option?

Also on income tax, Is it the same in France ie only pay tax (14% I think) on the amount over the tax free allowance 10000 euros? I'd be in drawdwon potentially withdrawing 10000 euros per year..

Many Thanks

BuildTheWall

MalMonroe said:

Johnny_Doe said:

Afternoon all,

For many years I have wanted to escape the UK (various reasons I'd rather not go into) and retire abroad where I get more "bang for my buck" and can retire earlier on less of a pension. (I'm 49 looking to retire at 55, if not sooner)

I have checked many countries, including, US/Canada/EU inc France, Sweden, Spain/Philippines/Vietnam/Thailand but there appears to be no option that fits all the criteria! I'm can compromise on the weather (especially Canada as I can travel across to the US for a few months of the year) but no index linking SP is a no go (unless I can find a property at least £100k less to make up for the loss of pension earnings..?

Main Criteria:

1. Index linked state pension
2. Good healthcare
3. Cheap housing (Canada and France have some real bargains!)
4. Generally a better cost of living than the UK..
5. English speaking ideally but can compromise (ie France)

Brexit has produced a "curveball" in that I'm not sure where index linking SP will end up and cant find much info on this online?

US is SP index linked but almost impossible to retire to unless you invest £1 million dollars in a local business!! Where's the "special relationship??

Canada would have been perfect but they don't support SP index linking!

Philippines seems to fit most criteria (supports SP index linking) but I have concerns over healthcare outside Manila.. many speak English so that's good.. and cost of living is good.. but my overall gut feeling isn't quite there as some areas are a bit 3rd world, same with Vietnam.. Thailand doesn't index link either..

Options seems to be running out for Brits retiring abroad!

Any advice greatly appreciated! TIA

Retiring to some of the countries you mention is nigh on impossible. The US and Canada, for example. It's a shame but you can't just decide to move there and then go because there's an immigration process to go through.

And for Thailand, you have to prove that you can afford to live there - my friend who married a Thai lady a few years ago now lives there and every year he has to prove that his income is stable and he can still afford to live there. Healthcare isn't as good as it is here and you have to pay through the nose for it. 

I have friends living in Toronto and Vancouver and neither place has cheap housing. Unless you want to live in some of the less desirable places, of course. Vancouver has the best weather. 

You also have to consider the lifestyles of some of the places you mention. 

In my younger days, I emigrated twice. But twice I returned to the UK. One is never so patriotic as when one is living in another country. And that saying about the other person's grass always being greener? True.

Couple of other things some people underestimate:
1) Better to choose a place where you have at least  a few close friends. Retirement at a new place can be lonely. 

2) the argument that applies against a holiday home can also apply here - sometimes it’s easier to travel and stay at new places if you are not committed to a place abroad. This can especially be tricky if you have to fulfill residency requirements. 

For some, 90 days in EU limit per year is good enough - allows them to explore a new place every year!

nigelbb

MacMickster said:

nigelbb said:

 Maintaining a house in UK & France gives you the best of both worlds. You can to a degree to your advantage choose where you are tax resident & travelling from one residence to the other can be easily achieved the same day.

Since Brexit you can only visit the Schengen area for a maximum of 90 days in any rolling 180 day period. so you will always remain tax resident in the UK.

If you are retired it's straightforward to get a 12 month visa then apply for residence. The minimum level of income required is modest (net of about €15,000/year).

nigelbb

BuildTheWall said:

nigelbb said:

It doesn't have to be a binary choice of UK or somewhere abroad. I lived & worked in France for 15 years. I never thought that I would return to live & work in the UK until I did. I still work part time in the UK but live the other half of my time in France. In about 3 years I will give up work & liquidate the SIPP that I am stuffing with all available spare cash from my earnings. I will pay 7.5% income tax & the money liberated will pay off my UK mortgage. My house in France is already paid for (house prices in much of France are unimaginably low compared to the UK eg €50K for a cottage which would cost £300K in South East Englands

The pandemic has made travel difficult over the last 15 months but the end is in sight. Maintaining a house in UK & France gives you the best of both worlds. You can to a degree to your advantage choose where you are tax resident & travelling from one residence to the other can be easily achieved the same day.

Won’t you be paying income tax in uk  on the sipp that’s being liquidated? And that can be at the additional rate?

Not if you are tax resident in France.

nigelbb

BuildTheWall said:

nigelbb said:

It doesn't have to be a binary choice of UK or somewhere abroad. I lived & worked in France for 15 years. I never thought that I would return to live & work in the UK until I did. I still work part time in the UK but live the other half of my time in France. In about 3 years I will give up work & liquidate the SIPP that I am stuffing with all available spare cash from my earnings. I will pay 7.5% income tax & the money liberated will pay off my UK mortgage. My house in France is already paid for (house prices in much of France are unimaginably low compared to the UK eg €50K for a cottage which would cost £300K in South East Englands

The pandemic has made travel difficult over the last 15 months but the end is in sight. Maintaining a house in UK & France gives you the best of both worlds. You can to a degree to your advantage choose where you are tax resident & travelling from one residence to the other can be easily achieved the same day.

Also if u let out the uk home you’ll have to pay capital gains tax when you sell it. 

Why would you want to let out your home in the UK if you are living in it for up to half of the year?

BuildTheWall

nigelbb said:

BuildTheWall said:

nigelbb said:

It doesn't have to be a binary choice of UK or somewhere abroad. I lived & worked in France for 15 years. I never thought that I would return to live & work in the UK until I did. I still work part time in the UK but live the other half of my time in France. In about 3 years I will give up work & liquidate the SIPP that I am stuffing with all available spare cash from my earnings. I will pay 7.5% income tax & the money liberated will pay off my UK mortgage. My house in France is already paid for (house prices in much of France are unimaginably low compared to the UK eg €50K for a cottage which would cost £300K in South East Englands

The pandemic has made travel difficult over the last 15 months but the end is in sight. Maintaining a house in UK & France gives you the best of both worlds. You can to a degree to your advantage choose where you are tax resident & travelling from one residence to the other can be easily achieved the same day.

Won’t you be paying income tax in uk  on the sipp that’s being liquidated? And that can be at the additional rate?

Not if you are tax resident in France.

You will be a non resident in uk and will have to pay tax on uk income. 

nigelbb

BuildTheWall said:

nigelbb said:

BuildTheWall said:

nigelbb said:

It doesn't have to be a binary choice of UK or somewhere abroad. I lived & worked in France for 15 years. I never thought that I would return to live & work in the UK until I did. I still work part time in the UK but live the other half of my time in France. In about 3 years I will give up work & liquidate the SIPP that I am stuffing with all available spare cash from my earnings. I will pay 7.5% income tax & the money liberated will pay off my UK mortgage. My house in France is already paid for (house prices in much of France are unimaginably low compared to the UK eg €50K for a cottage which would cost £300K in South East Englands

The pandemic has made travel difficult over the last 15 months but the end is in sight. Maintaining a house in UK & France gives you the best of both worlds. You can to a degree to your advantage choose where you are tax resident & travelling from one residence to the other can be easily achieved the same day.

Won’t you be paying income tax in uk  on the sipp that’s being liquidated? And that can be at the additional rate?

Not if you are tax resident in France.

You will be a non resident in uk and will have to pay tax on uk income. 

If you are tax resident in France you would only pay UK tax on UK income as defined in the UK-France Double Taxation Convention (commonly known as the Dual Tax Treaty or DTT). This includes income from employment in the UK, certain pensions derived from employment in local or central government & rental income from UK property. It does not include private ie non-government pensions including the state pension as this income will be only taxed in France.

jimi_man

MalMonroe said:

Johnny_Doe said:

Afternoon all,

For many years I have wanted to escape the UK (various reasons I'd rather not go into) and retire abroad where I get more "bang for my buck" and can retire earlier on less of a pension. (I'm 49 looking to retire at 55, if not sooner)

I have checked many countries, including, US/Canada/EU inc France, Sweden, Spain/Philippines/Vietnam/Thailand but there appears to be no option that fits all the criteria! I'm can compromise on the weather (especially Canada as I can travel across to the US for a few months of the year) but no index linking SP is a no go (unless I can find a property at least £100k less to make up for the loss of pension earnings..?

Main Criteria:

1. Index linked state pension
2. Good healthcare
3. Cheap housing (Canada and France have some real bargains!)
4. Generally a better cost of living than the UK..
5. English speaking ideally but can compromise (ie France)

Brexit has produced a "curveball" in that I'm not sure where index linking SP will end up and cant find much info on this online?

US is SP index linked but almost impossible to retire to unless you invest £1 million dollars in a local business!! Where's the "special relationship??

Canada would have been perfect but they don't support SP index linking!

Philippines seems to fit most criteria (supports SP index linking) but I have concerns over healthcare outside Manila.. many speak English so that's good.. and cost of living is good.. but my overall gut feeling isn't quite there as some areas are a bit 3rd world, same with Vietnam.. Thailand doesn't index link either..

Options seems to be running out for Brits retiring abroad!

Any advice greatly appreciated! TIA

And for Thailand, you have to prove that you can afford to live there - my friend who married a Thai lady a few years ago now lives there and every year he has to prove that his income is stable and he can still afford to live there. Healthcare isn't as good as it is here and you have to pay through the nose for it. 

Not only that but non Thai people are not allowed to own property in Thailand, so unless one of you is Thai (in relation to the OP) then you'd have to rent permanently. May or may not be an issue.

Personally Thailand is one of my favourite places in the world, but I'm not sure I'd want to live there.

SouthCoastBoy

BuildTheWall said:

MalMonroe said:

Johnny_Doe said:

Afternoon all,

For many years I have wanted to escape the UK (various reasons I'd rather not go into) and retire abroad where I get more "bang for my buck" and can retire earlier on less of a pension. (I'm 49 looking to retire at 55, if not sooner)

I have checked many countries, including, US/Canada/EU inc France, Sweden, Spain/Philippines/Vietnam/Thailand but there appears to be no option that fits all the criteria! I'm can compromise on the weather (especially Canada as I can travel across to the US for a few months of the year) but no index linking SP is a no go (unless I can find a property at least £100k less to make up for the loss of pension earnings..?

Main Criteria:

1. Index linked state pension
2. Good healthcare
3. Cheap housing (Canada and France have some real bargains!)
4. Generally a better cost of living than the UK..
5. English speaking ideally but can compromise (ie France)

Brexit has produced a "curveball" in that I'm not sure where index linking SP will end up and cant find much info on this online?

US is SP index linked but almost impossible to retire to unless you invest £1 million dollars in a local business!! Where's the "special relationship??

Canada would have been perfect but they don't support SP index linking!

Philippines seems to fit most criteria (supports SP index linking) but I have concerns over healthcare outside Manila.. many speak English so that's good.. and cost of living is good.. but my overall gut feeling isn't quite there as some areas are a bit 3rd world, same with Vietnam.. Thailand doesn't index link either..

Options seems to be running out for Brits retiring abroad!

Any advice greatly appreciated! TIA

Retiring to some of the countries you mention is nigh on impossible. The US and Canada, for example. It's a shame but you can't just decide to move there and then go because there's an immigration process to go through.

And for Thailand, you have to prove that you can afford to live there - my friend who married a Thai lady a few years ago now lives there and every year he has to prove that his income is stable and he can still afford to live there. Healthcare isn't as good as it is here and you have to pay through the nose for it. 

I have friends living in Toronto and Vancouver and neither place has cheap housing. Unless you want to live in some of the less desirable places, of course. Vancouver has the best weather. 

You also have to consider the lifestyles of some of the places you mention. 

In my younger days, I emigrated twice. But twice I returned to the UK. One is never so patriotic as when one is living in another country. And that saying about the other person's grass always being greener? True.

Couple of other things some people underestimate:
1) Better to choose a place where you have at least  a few close friends. Retirement at a new place can be lonely. 

2) the argument that applies against a holiday home can also apply here - sometimes it’s easier to travel and stay at new places if you are not committed to a place abroad. This can especially be tricky if you have to fulfill residency requirements. 

For some, 90 days in EU limit per year is good enough - allows them to explore a new place every year!

Yes, this is my plan in early years of retirement. I expect to spend 2 to 3 mths of the year in Australia, and may be 1 or 2 mths in Spain, This is where Airbnb is really useful. Obvously all that is dependant on covid restrictions