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PLANNING FOR RETIREMENT

Moving overseas when you retire:

British residency: If you are abroad for fewer than 183 days in any one tax year, or if you spend an average of 91 days or more in Britain over a four year period, you will be treated as a UK resident for tax purposes. Double taxation agreements: many countries have double taxation agreements with Britain to ensure individuals are not taxed twice on income from their pensions, savings and investments. Details are available on the Revenue web site at www.inlandrevenue.gov.uk

Bank accounts: You will need a bank account. The DWP and your pension company will send your money to the bank if instructed. Remember that your pension will be paid in sterling - so you will have to pay for it to be converted into the local currency. If you are resident abroad, you may prefer to open an offshore account in a tax-friendly haven, such as the Channel Islands or Gibraltar. A standing order could then be set up to fed enough cash through to a local bank as required. Interest on offshore accounts is paid gross and you do not usually have to pay tax until you bring the money back on-shore.

Offshore investments: Many people who want to retire abroad choose offshore investments as part of their preliminary financial planning. These funds are often kick started with a lump sum payment and topped up by regular contributions. They are tax efficient because no tax is payable until profits are brought onshore - this may be to Britain or another country.

State pension: How much state pension you get when you retire abroad depends where you move to. In EU countries or in countries such as America, Israel and Malta the state pension increases in line with inflation as it does here. However, in some locations the pension will remain at the level it was when you left.

Insurance: Life insurance is very important to many financial plans. Provided all premiums are paid as stipulated by the policy, a claim will be met regardless of where the policyholder dies.

Policies such as critical illness cover will not normally pay out if you live outside the EU for more than 13 weeks.It is suggested that those with private medical insurance should discuss their situation with their insurer. In most cases it will be necessary to switch to an international plan which will either pay for treatment overseas, or back in the UK. Would-be expatriates should also find out what is available on the equivalent of the National Health Service. Form E111 from your local DWP office lists reciprocal agreements and a call to the county's embassy (where you intend to retire) should fill in the gaps. Talk to other expatriates about their experiences.

If you are planning ahead and intend to go to somewhere like America, where private health insurance is a necessity, the sooner you take out a suitable transferable policy the better.

Property: Many banks and building societies have branches overseas. They should be able to help you with financial matters, including arranging a mortgage. If you are some time off retirement, you could buy a property now, use it for holidays and then retire there later. Remember that if you have to return to the UK for whatever reason, you may not be able to afford a suitable property. House price inflation in the UK has been high relative to other countries in recent years.

If you do not sell your UK property, but keep it as a base for visits, or a place to return to if the overseas venture turns sour, then arrangements should be made to ensure it remains secure and in good order.

REMEMBER You should not use any information contained on this page as the basis of any action until you have discussed matters with your financial adviser.