Moving to Corfu - Case Study

Curt and partner Shelley had long wanted somewhere sunny to escape to. Holidays were spent as far away as Thailand, but when it came time to actually buying, they settled for Corfu.

“When it came to choosing a place to buy abroad it was a long process, all in all I think it took us a couple of years to finally pinpoint Corfu.” Shelley recalls. “We always knew we wanted to live abroad in a better climate with a better way of life. But of all of the places we have been to, the Greek Islands were always towards the top of the list.

“So we talked about what exactly we wanted from our surroundings and particularly about the sort of life we wanted to lead. There were disagreements along the way, for instance climate. Curt would prefer tropical, year round sun and sea with coral reefs, I wanted somewhere with seasons, but we both wanted long, sunny summers and short winters” laughs Shelley.

Both agreed too that they wanted peace and quiet, with enough land to be able to grow their own veggies and for Shelley to have a garden. “We wanted a safe place with a low or non existent crime rate and we also wanted to live a more environmentally sustainable way, plus in a place that preferably had English as a native language” explains Shelley. But finding somewhere with everything wasn't going to be easy and, in the end, compromises had to be made.

“Thailand is our first love, we adore it there, but the uncertain political situation and the difficulty in non-nationals buying out there put even Curt off” laughs Shelley. “We also considered the Caribbean, but I was adamant that I wasn't going to live somewhere where my house could be demolished annually by a passing hurricane.

“Following that we looked at a couple of different states in America, Florida and Arizona. Curt is American by birth and could go to live there tomorrow and work without it being an issue. We have many friends who own property in Florida and they are totally amazed that we have not chosen to go there” adds Shelley, “but the constant threat of crime, the humid weather and our friend’s horror stories about rattle snakes and alligators in their gardens made it unsuitable.”

Finally it was down to Spain or Greece. A few holidays to a number of Greek islands, including time spent zipping around Corfu on a motorbike, finally decided them. The north western corner was a definite contender; nicer, quieter and greener, with many lovely villages. After a lot of thought, Curt and Shelley settled for Sidari, 45 km from Corfu Town and the airport.

Sidari is a family orientated town where there are quite a number of expats. “It’s a bit chaotic for us in summer” said Curt, “but I have a swimming pool business and I am thinking of doing that in Corfu, so there needs to be some sort of market for that.”

Out of season there are very few people there. “We popped up to a small local café in December and the sum total of people there were six Brits” laughed Curt. “It is pretty chaotic in season and we may avoid it in the heart of summer, but by the end of the season it turns into a small, friendly town.”

“We got chatting to agents in Corfu about our dream home, and they very honestly said it wasn’t going to happen” confesses Shelley: “We wanted an old house to do up, away from any roads, near a good beach, sea views, close to a town, in the centre of its own ground of about 2 acres.”

Curt liked the agent’s suggestion of buying a piece of land and building a house from scratch in a traditional style. Wisely they decided to go with advice from local people: “Even so,” says Curt, “you do still need to keep an eye on what’s going on and basically use your own common sense too.”

Shelley admits “I wasn't happy about it, but Curt was all for it so we started looking at some of the plots they had on their books. We didn't really intend to buy anywhere on that visit, just pinpoint an area and go back later to investigate further, but on the last day, the very last plot they took us to was perfect. I mean perfect....distant sea views, tucked away on a hillside at the back of Sidari so no one will ever find us - let alone bother us - but only a five minute drive into a town with a supermarket, dentist and doctors”.

They rushed back to the estate agent’s offices to try and get the ball rolling only to come up against the first hurdle: Curt’s nationality prevented him from owning property in Greece. With the help of their estate agent and a good lawyer, even this hurdle was overcome, and about 3 months later, after many phone calls, emails and faxes the deeds arrived. Just before Christmas, Shelley became the sole owner of a couple of acres of Greek hillside.

“I have to admit I have handed most of the process of sorting all of this over to Curt, and opted out, and to be honest I couldn't quite believe we had done it” laughs Shelley. That was not quite the end of the problems though.

Paying for the property became the next issue. Newsletters from the Greece Buying Guide had made mention of Smart Currency Exchange and Curt decided to investigate this option. Talking to dealers, he found that not only were their exchange rates far better than his high street bank but that transfer costs were eliminated too.

Curt continues: “After my initial money transfer, the follow up at the currency company was excellent. I spoke to various individuals, all of whom were friendly and to the point. All my initial concerns were answered and I found the actual process extremely easy. They talked me through the whole process, even advising on the wisdom of ‘forward buying’ – locking the currency in at that day’s rate for a time in the future.”

As to the future, Curt and Shelley can’t wait to move ahead, but the UK property market downturn is holding up their plans. “So far we are only at the stage of erecting the concrete frame. We went out for a week in December to see the progress and for the first time stood on what is going to be our patio. Unfortunately this is as far as we can go until we sell our house here in the UK, which is proving difficult, to say the least!” says Curt.

But Shelley is optimistic: “With the fantastic help we get from our estate agent, our local builder, our lawyer and, of course, our currency company - Smart Currency Exchange - we know we can trust all of them to do all they can to take care of the nasty, boring end of the transition, so that Curt and I can concentrate on the adventure ahead. Bring it on, I say.”

Pensions when moving abroad

Hello – and how are you?

It’s been a lovely quiet week for me. However, the weekend is looking busy, with ‘Satchmo Remembered’ at the V&A Café on Friday – Louis Armstrong’s music. And then on Saturday I am going to see what is described as a top-notch comedy cast of Mackenzie Crook, Ralf Little and Olly Alexander as a trio of slackers who spend their days loitering outside a Vermont coffee shop. All this at the tiny theatre at Shepherd’s Bush. It’s great ‘cos you can actually lean out and touch the actors should you so desire – I won’t – I promise! I saw the lovely Joseph Fiennes here – it’s a great venue and my son is joining me so that should be enormous fun.

So – are you still thinking of buying a home abroad? And are you actually going to be moving permanently? Reason I ask is that today, with our finances sorely strained as they are, it’s important to know how this will affect taxation on any pension you may receive from the UK.

Once you're a resident abroad what you need to ascertain is how your new home country and the UK will divide up the tax. Even if you are a non-resident of the UK, you are taxed on income earned in the UK – and this includes any pension emanating from the UK - but does that mean that you end up paying twice?

This is where those vitally important Double Tax Treaties (DTT) come into play. There are specific provisions in Double Tax Treaties that can impact on this, and in particular there is a distinction made between government and non governmental pensions.

You would need to review any applicable Double Tax Treaty between the UK and your new country of residence very carefully before rather than after moving: any relief available depends upon the terms of each DTT. And of course you will need to know exactly how to set about making sure that you do the right thing to avoid any duplication of tax. If a benefit applies you can then make a claim with HMRC for the pension to be paid either:

- Without tax deducted
- With tax deducted at a reduced rate of tax as laid down in the DT Treaty

You should take expert and detailed advice on this – if you need help finding a reputable IFA (Independent Financial Advisor) please call the OGC Resource Centre on 0207 898 0549 and they will help to find one. I think it’s really important to think about this before you even think of moving –after all, you may be reliant on your pension income and you need to budget well in advance.

I will chat to you next week: winter is just around the corner and already it feels to me that the colder weather is on its way. I am looking forward to a holiday I have planned in sunny Morocco in October…!

Best wishes,

Carol.

Emigrating Overseas?

Hi there: how are you? Summer seems to be receding further and further away…roll on my holiday to Morocco in October, where the weather no doubt will be lovely!

I have been chatting to a number of people recently about emigrating: many are the reason they give but one of the chief ones seems to be lack of employment here in the UK. When you hear news like social housing firm Connaught, which employs 10,000 people, going into administration on Wednesday it is food for thought indeed. But the question is: will it be any easier to find employment abroad - and how will you set about doing this?

First, the nuts and bolts. EU citizens are not required to have a work permit in order to work in the EU. However, you will need proof of residency once you do get a job. To do this you usually apply to the Immigration Department. Non-EU citizens are generally required to have a work permit and a residence permit in order to be employed abroad and can be a harder nut to crack.

There is no doubt about it: first prize is either to get a transfer abroad via your present form or to line up a job before you move. You may think of contacting the local embassy of the country you are thinking of moving to for assistance, or perhaps find yourself a blog or Internet site that deals with getting jobs in the country you are planning to move to.

If that fails, what next?

As an English speaker, the first job that springs to mind is that of teaching English – of course this only really applies in countries where the first language is not English.In most countries there is a desire to learn English, not the least as it is generally considered the business language of the world.

While still in the UK you can search for teaching jobs in publications such as the TES (Times Educational Supplement) and the Guardian EFL pages on Tuesdays. Alternatively, certain ESL (English as a Second Language) websites like ESL employment and tefl.com can be useful. Upon arrival you can try local newspapers or perhaps employment agencies or international companies. Some British Council offices are helpful too as they produce lists of local schools and can point you in the right direction.

Tourism is another promising field of employment that you could try; jobs here are mainly available in the summer. You may think that this sort of work won’t pay the bills for ever but at least you can be looking around while earning a few cents.

For business related opportunities, the bigger cities should be your focus.


How to seek out jobs:

• English periodicals. Here you will find a selection of jobs from teaching to secretarial, advertising and sales

• Job agencies, especially in the larger cities. Remember to have your CV and references to hand

• Ask around - try that friendly shop owner, or pop into an Estate Agent...if they don’t have anything, they may know someone who has. Personal contacts can be very helpful when looking for a job

• Contact working expats, either personally or through the Internet: they have been where you are and may well be able to help

• Place ads in papers, bar notice boards, at the golf course, in shops etc.

Other options:

• A large number of UK recruitment agencies have permanent bases abroad – ask large employment agencies in the UK before you move if they have an office in the country you are moving to

• Try informal methods of recruitment such as word of mouth, networking and speculative applications, especially for small and medium-sized companies.

Self-employment

If you are an EU national or a permanent resident with a residence card you can work in a EU country as a self-employed person or a sole trader. As such, you must meet certain legal requirements and register with the appropriate organisation.

Getting started in your own business

Just a few very basic points:

• If you plan to run your own business, give careful consideration to where you will be living in relation to your customers

• Make sure that you are doing something that is different, something that will benefit your potential customers and make them more inclined to deal with you

• Be sure that there is enough demand for your product or service and that there are sufficient customers to keep you in business

• There are very few businesses that are profitable from the start. It’s therefore very important that you budget for start up costs and that you have sufficient funds to keep you and your family going until the business starts to make a profit.
  

Need any help at all? The friendly team at the OCG Resource Centre chat to people moving abroad on a daily basis and may be able to help. Call them on 0207 898 0549 - there is no cost or obligation at all and you may find just the information you need.

I hope this has given you a few ideas. I’d love to hear if your plans include working abroad and, if so, what your strategy is?

In the meanwhile, I am going to get back to my job of happily tapping away on my computer in the good old UK! Take care until next week,

Carol.

Non-Resident Status in the UK

Hey there – how are you? I am off to an outdoors Blues concert tonight…very brave of me I might add! The last one I attended saw me sitting like a ghostly wraith in the pouring rain, in a waterproof poncho thoughtfully provided by concert hosts. It was most enjoyable but did I ever get the mother and father of all colds! Wish me luck tonight…

A question I am often asked these days by people who are moving abroad is this: exactly when are you considered to be a UK resident, or to turn this question on its head, when are you considered a non-resident? This has become one of the most controversial and worrisome aspects of emigration recently, largely due to the tax implications that accompany it.

Evidently, according to a recent Court of Appeal decision in the long drawn out Gaines Cooper saga, it is no longer enough to conform to the rules as laid down by HM Revenue & Customs. These laid down that, to prove non-residency, you needed only to show that you didn’t spend more than 90 days a year on average in Britain over four years.

Now the taxman is allowed to scrutinise in more detail whether non-residents have made what they consider to be enough of a break from the UK.

So…how do you make sure that you qualify for non-resident status?

In most EU countries an individual is not considered a resident unless 183 days are spent there each year. In the UK, it is 90 days on a rolling four-year average, although you can spend up to 183 days in any given year. Things like visiting offspring or grandchildren in the UK will count toward your 90-day limit. Incidentally there are dispensations if you are visiting someone because of an emergency. If a member of your family is terminally ill for example, you may be able to stay for more than the average 90 days over four years. However, you would not be able to stay for more than 183 days in any given year without risking your status.

But this is no longer the only criterion; continuing connections with the country will now be taken into account, and this can be a very grey area.

Keeping a house or a car in the UK, maintaining membership of a private club, or even regularly attending social events such as Royal Ascot or Wimbledon can now be used against you in terms of proving your non-resident status. Needless to say, this new vigilance has largely been brought about in an effort to check up on those seeking to avoid the new 50% tax rate imposed on the super-rich.

Individuals must prove an intention to leave the UK permanently or indefinitely. Recent Court decisions on residence tend to be in favour of HMRC and there is no doubt that they are actively pursuing cases where, in its view, the taxpayer has not done enough to demonstrate that they have ceased to be UK resident.

What does this mean to you? Well, the bottom line is that you need to sever as many ties with the UK as possible. It is no longer sufficient just to stay abroad for the obligatory period and tally up days spent in the UK. You have to be able to demonstrate a complete break with the country.
To do this you may want to consider adopting the following measures:

Property in the UK:

• Sell your UK property or let it out for at least 12 months - do not leave it unoccupied
• If you are letting the property, ask a UK agent to deal with the property on your behalf
• Pay all property bills before you depart the UK
• Notify your house insurers that you are emigrating and adjust the insurance accordingly
• Notify your mortgage lender that you are emigrating
• Notify your local council that you no longer reside at the property
  

Business matters in the UK:

• Consider resigning from any UK company directorships or company secretarial positions
• Consider disposing of your UK business interests altogether
  

Other UK matters:

• Notify your UK doctor and dentist that you have left the UK
• Cancel your UK sporting and social club memberships
• You would be wise to appoint an attorney in the UK who is empowered to deal with your UK affairs
  

Taxes

• Send the completed form P85 to HMRC, declaring that you are a non-resident
• You would be well advised not to return to the UK for an entire tax year if possible to emphasise the break in residence
• Do not return to the UK for more than 90 days a year in subsequent tax years, remembering to factor in travel days in this number
  

Finances

• Cancel all UK credit cards and reduce balances in your UK bank accounts
• Pay all UK accounts and close them. Demand evidence that they are closed in the form of a letter of acknowledgement
• Consider transferring pension arrangements overseas.
  

Cars

• Sell your car and cancel your car insurance and subscriptions to motoring organisations
  

In your new country of residence - once you have moved abroad:

• Establish employment or business links in the new country if you are planning to work there
• Obtain a residence permit where necessary
• Contact the local tax authorities to inform them that you have become a resident
• Purchase or rent on a long lease a property locally and buy a car there
• Register with a doctor and dentist in your new country of residence and open a local bank account
• Establish social and cultural connections in your new homeland. Perhaps join clubs, register children at schools etc.
• Have a will drawn up in your new country of residence
  

What you need to do is make sure that you have effectively cut off ties with the UK in terms of living here. The overall pattern of your life must reflect your declared non-resident status and the fact that you have left the UK for the foreseeable future.

Carol
http://www.GreeceBuyingGuide.com