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Coming home: How to prepare for your return home from overseas

What happens when a period of living and working abroad comes to an end? It could be sooner than you expected. Around 4% of people return home within a year, although most spend between 5 and 10 years overseas. There's been a steady exodus from the United Arab Emirates after the pandemic, and significant departures from Hong Kong, China (Covid) and Singapore (cost of living). Brexit also forced any British citizens who didn't have settled status in the European Union to leave the EU too. 

In some cases, coming back home is a relatively sudden decision brought on by homesickness, family circumstances, health issues or changes in the cost of living. For others, there's time to plan as the end of a contract looms, residency rules change or new opportunities present themselves back home. 

The irony is that many people find it just as hard to resume the life they left behind as they did to adapt to a new culture overseas. Here's what to expect and how to prepare. 


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Reverse culture shock

Especially if you've been away for a decade or more, it can be hard to slide back into normal life in a country that has changed, or to readjust to old customs. 

No more everyday luxuries. If you've been living in a country where domestic help, childcare, laundry, private security and other services are affordable and available, it can be a sobering experience to suddenly find yourself fully responsible again. 

Rule changes. From how to dispose of your household waste to where you can drive and park, there's a good chance that new laws or ways of doing things will catch out anyone who's been overseas for long. 

Cost of living. You might have kept up to date with the value of your home currency, but it can be a shock to see how much everyday items have increased in price, particularly if you've been in a low-cost country. 

Gentrification (or decline). Head back to your old stomping grounds and you might discover that the landscape and character have changed forever and that it no longer feels like home. 

Friends reunited. Plugging back into the social network you left might not be as seamless as you'd hoped. 

How to prepare: Leave your overseas life behind mentally as well as physically and commit to re-adapting to home again. 

Find work after repatriation

If you're lucky, you're returning home to the employer who sent you overseas in the first place. But many senior executives find it hard to reintegrate, especially to a workplace transformed by digitisation, automation and even environmental, social and governance (ESG) or diversity, equity and inclusion (DEI) commitments. Many skilled professionals become frustrated that their overseas experience is not valued or understood. One study in Australia found that 83% of recruiters were reluctant to recommend repatriated job-seekers because they had higher salary expectations too. 

Repatriating to a domestic work environment can be brutal. On the way out, there was an employer helping with housing, schools, transport, and administration. On the return journey, there's often little to no support. 

How to prepare: Start pre-networking, reaching out and getting recommendations before you return. 

Establishing your tax residency 

Under the 183-day rule applied in many countries, your tax residency would have been transferred to your overseas country after six months of living and working abroad. That came with some big benefits if you were in a low-tax country, such as the UAE. Once you return home, however, you'll need to notify tax authorities that you are once again a resident for tax purposes. 

In the UK, you'll have to notify HMRC and register for self-assessment if you're self-employed. As a tax resident, you'll have to pay tax on your UK income and gains and any foreign income and gains. Crucially, if you returned to the UK after five years or less overseas, you'll be liable for tax on any capital gains, pension-related lump sums, or life insurance policies earned overseas. 

American citizens living abroad are already required to file annual returns on global income with the Internal Revenue Service (IRS), which will probably have incorporated a foreign earned income exclusion to avoid double taxation. Once you're back in the USA, you'll report income as usual. 

How to prepare: Seek professional financial advice on the tax consequences (and obligations) of repatriating foreign income or assets, as well as transferring assets to family members or friends. 

Registering for healthcare cover

Are you still covered? If you leave the UK for more than three months, for example, you may no longer be entitled to automatic free non-emergency healthcare unless you can prove habitual residence in the UK. You'll also have to re-register with doctors and dentists using form GMS1 and will have to update any private health or life insurance policies to your new residency status. 

If you're a US citizen, it's important to sign up early for Medicare to avoid late-enrolment penalties or higher premiums. As an American living overseas, you can apply for an exemption from the Affordable Care Act (ACA) contributions, by filling out Form 8965, but you'll need at least 10 years of contributions to qualify for Medicare coverage, which starts at 65. 

How to prepare: Wherever you're moving from or to, make sure you know when you're overseas medical coverage expires. 

Banking back home

Leaving your domestic bank account open is a shrewd move if you want to manage local payments (eg. for rental property), maintain your credit score, or transfer money to and from your overseas bank account. But your bank may block or close your account if it's inactive for long, and under post-Brexit passporting rules, many banks were forced to close UK accounts of holders living overseas permanently.

Bear in mind, however, that if you're using your domestic bank account overseas, you'll typically be paying higher fees on your international money transfers, and your bank may not support some overseas transactions. 

How to prepare: Be transparent with your bank before you go and when you return. Keep your account open if you can, but send your money internationally with CurrencyFair. 

Repatriating your pension pot

You will normally need to choose which country you receive your pension into, and into which account. Thanks to bilateral agreements, it's relatively straightforward to receive your domestic pension overseas, providing you have sufficient years of contributions. You may have to pay local taxes on income from foreign pensions, however. 

When you're coming home, you'll need to notify the International Pension Centre to establish what you're entitled to in pension and other benefits, and should seek financial advice on consolidating any private or state pension funds accumulated while living and working abroad. 

How to prepare: Pension reform is a pressing international issue, so keep up to date with any rule changes or financial instruments available for building your pension pot - even if you're still a few years away from retirement, and save money on your international pension transfers with CurrencyFair. 

Finding somewhere to live 

Assuming that you don't have a property to return to, one of the biggest headaches will be finding temporary or permanent accommodation for your family. Without a credit history or recent references, you might struggle in an already saturated rental market, and you'll have to set aside a substantial sum to cover moving costs, deposit, agency fees and first month's rent. 

How to prepare: That becomes much harder when you're coming back from a country with a low cost of living, so move your money home with the lowest-cost option, and choose the best rates to repatriate your money with our CurrencyRate Exchange

Returning with spouses and children 

Beware of finding love and starting a family while living and working overseas, at least if you ever want to move back home. Although obtaining a passport for children overseas is usually straightforward, many expats don't realise that their foreign spouse does not have an automatic right to join them back home. 

US citizens will have to file a Petition for Alien Relative with the Department of Homeland Security, apply for a Green Card, and attend an interview at a US embassy or consulate. UK nationals will have to apply for the Spouse Visa, which costs £1,538 and has a minimum income requirement to satisfy. 

How to prepare: Gather supporting documents early - including photos and Whatsapp conversations, in some cases - as proof of a legitimate, authentic marriage. 

Sending money overseas

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This information is correct as of April 2023. This information is not to be relied on in making a decision with regard to an investment. We strongly recommend that you obtain independent financial advice before making any form of investment or significant financial transaction. This article is purely for general information purposes.

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