For some people retirement planning in Cheshire or Oswestry, there may be a temptation to move to warmer climes. An estimated 1 million UK pensioners already live overseas, but how easy is it to join them in 2026?
Whilst recent changes to inheritance tax and non-dom status may have triggered interest, there are obstacles to be aware of too. There are inevitable linguistic, cultural and visa challenges facing any expat, and it is important to be aware of entry restrictions which will vary by country and local criteria for existing savings, healthcare and pension and investment provisions.
In terms of tax, wealth advisers now recommend that expats have a solid action plan in place before moving abroad. It is a good idea to withdraw your tax-free lump sum and to check liability for capital gains tax prior to emigration to most EU countries, after which your taxable status may change. These will vary by country.
Spain has a wealth tax in place that is more punitive in some regions than others, whilst the French variant targets worldwide property assets worth in excess of 1.3 million euros after five years in the country. When it comes to inheritance tax, Portugal and Italy are known for offering more favourable regimes.
With all countries, it is important to ensure you comply with the UK’s Statutory Residence Tests that were introduced back in 2013. It is crucial you understand the significance of the 183-day tax residence rules in your new country of abode, especially when transferring pensions into the overseas Qrop scheme. Pensioners living in Europe will still benefit from the state ‘Triple Lock’, but private pensions kept in the UK will normally be subject to local taxation.
