Guide to financial planning for expats moving to the USA
Moving to another country, particularly outside the European Union, takes a lot of planning when it comes to finances. It’s important to tie up UK-based affairs, as well accounting for moving costs and new living expenses.
The USA is a popular destination for British expats, as its vastness offers so many opportunities, cultures and climates to explore. However, there can be a lot of red tape to cut through to be able to settle in the US as an expatriate.
The first step in relocating to the USA is sorting an appropriate visa. This may be arranged through a place of work/employer sponsorship, which is the most likely route on the path to a Permanent Residence Card. It can be a long, hard process to be granted the right to live and work in the USA long term, so start early. There are various visa fees applicable and these need to be budgeted for.
There is also the actual cost of moving such a long distance, and the time involved in getting a shipment from the UK to the USA. It can be cheaper to sell some goods, such as furniture or cars, and buy new in the States, but there will inevitably be goods that need to be transported. Specialist removal companies like Cadogan Tate are experienced in all areas of packing, transport, storage, shipping, customs and liability, so it is certainly worth investing in to get precious belongings safely to their new destination. It can take anything from two to six weeks for transit depending on where in the USA the shipment needs to reach. Find out more about moving to the USA and what you can take.
Key financial issues
UK-based financial affairs should be tied up in advance of the relocation as much as possible. This includes things like paying off all credit cards and loans, closing unnecessary accounts, informing the HMRC of the departure, and selling or renting a UK home.
Quite often there will be large sums of money from the sale of a UK home that need to be transferred for use in the USA. With exchange rates to consider, as well as high fees, a sizeable amount of cash could be lost in the transfer through high-street banks. As such, consider using a transfer specialist to get the best possible rate.
A US bank account will be required, and the easiest solution is to have an account with an international bank that enables banking in different currencies. This is helpful if things like mortgages need to be paid back home, or to transfer money to family staying in the UK. It’s also useful for accepting income from the UK, such as a pension, or rental incomes. Bear in mind that having UK financial commitments and income can make taxation more complicated, so seek professional advice on the best ways to manage this, particularly in regards to investments and savings. Look for a specialist in expat financial management.
One of the biggest costs to plan for is accommodation. It’s wise to rent first to get used to the area and the lifestyle. Rent will have to be paid a month in advance, and a deposit will be needed. It’s best to secure a property before leaving the UK if possible, as it makes necessary credit checks easier. Renting can help while building up a US credit history, which will help buying further down the line a little easier.
Other costs to think about include education, especially if an international school is going to be used rather than state school, as this can cost a lot. In the USA, health insurance is also essential and this is a high cost that needs to be accounted for if it is not included in a relocation package.