The Mediterranean lifestyle draws British retirees craving 300 days of sunshine in the Iberian Peninsula, while mountain lovers flock to Switzerland’s alp-framed valleys and lakes straight out of a film set. But whether it’s the Algarve or the Alps, long-term planning is crucial to creating a blissful life abroad.
“Financial planning has a significant long-term impact on our well-being, even more so than a pay rise or existing wealth assets,” notes HSBC Expat (HSBC Expat, ‘Financial planning and Quality of Life’, 24 September 2024).
This is a reminder that money isn’t just a measure of success—it’s a framework for living well. For expats, the right strategy means being able to fully embrace your new life abroad without financial stress lingering in the background.
Around 1.2 million British expats live in the EU, many seeking sunshine, better work-life balance, and more affordable lifestyles.
Take James and Catherine, both in their late fifties, who sold their serviced offices business in the Midlands five years ago. After three decades of dedicated work, they wanted a fresh start in Portugal for retirement.
Today, their mornings begin with dog walks along the beach near their coastside villa, while summers are filled with family gatherings. When the MacBook opens, it’s not for board meetings but for causes they truly care about.
What’s their secret? They didn’t leap abroad without a plan. Instead, James and Catherine prioritised cross-border financial planning, carefully considering:
Tax residency scenarios
Pension structuring
Investment diversification
Property ownership abroad
By working with an experienced wealth manager, they created a strategy that protected their assets, optimised their tax exposure, and secured their long-term lifestyle goals.
“Investment planning for expats requires a comprehensive approach that considers both short-term objectives and long-term goals” (Private Client Consultancy).
James and Catherine sold their UK family home and reinvested in a villa in Almancil, Portugal. This move helped them:
Avoid UK inheritance tax (IHT)
Minimise Portuguese succession tax
Retain capital for diversification
By planning strategically, they ensured their wealth worked for them today while preserving their legacy for tomorrow.
As Brits living more than 183 days per year in Portugal, James and Catherine became subject to Portuguese tax rules. To optimise their situation, they applied for Non-Habitual Residency (NHR), securing:
A flat 20% tax rate on certain foreign-sourced income
Tax advantages on international investments
Relief through the UK-Portugal Double Taxation Treaty
These measures allowed them to structure their wealth efficiently while avoiding double taxation.
If they had chosen another European country, their tax scenario would have been very different. In some jurisdictions without a dual residence agreement with the UK, even spending between 16 and 183 days in Britain could trigger UK tax residency.
Every jurisdiction has unique tax rules, and misunderstanding them can significantly erode wealth. That’s why expert advice is essential before making the move.
James and Catherine also safeguarded their pensions through a Qualifying Recognised Overseas Pension Scheme (QROPS). This allowed them to:
Transfer part of their UK pensions abroad
Access up to 25% tax-free lump sum withdrawals
Protect their funds against UK inheritance tax
By combining a global investment platform with QROPS, they created a flexible pension strategy tailored to life abroad.
Succession is one of the most overlooked aspects of expat life. James and Catherine stayed one step ahead by:
Creating an international will and trusts
Discussing inheritance plans openly with their children
Ensuring their assets will pass on smoothly without bureaucracy
As HSBC Expat notes: “By organising our wealth to provide for our loved ones, we can leave a lasting positive legacy.”
The lesson is clear: detailed financial planning sets the foundation for a meaningful life overseas. With assets structured correctly, expats can eliminate the stress of future financial uncertainty—from healthcare costs to succession.
By understanding both UK and European jurisdictions, and regularly checking in with a wealth manager, British expats like James and Catherine can:
Protect wealth from unnecessary taxation
Enjoy a fulfilling lifestyle abroad
Ensure their financial strategy evolves with changing laws
In the end, it’s not just about moving abroad—it’s about unlocking a future where wealth enables the life you’ve worked so hard to build.
