National lockdowns due to the Coronavirus pandemic delayed many people making the move to start a new life abroad. Now that the ‘traffic light’ travel system has come to an end and we are edging ever closer to normality, some are ready to make the final steps to confirm their emigration.
Currently, you can travel to any country without having to quarantine on your return. The green and amber lists have been merged, and the red list culled, so the world really is your oyster.
Yet, despite the arrival of this new-found freedom, questions around finances and safety will still come to the forefront, leading to confusion if the correct information is not at hand.
Here is all you need to know about whether you can retain an Isa following your move away.
What happens to my Isa if I move abroad – can I keep it?
Q I am planning to emigrate later this year and would like to know what will happen to my Isas.
I have cash Isas and stocks and shares Isas and would like to continue paying into these accounts once I’ve moved abroad. Is that possible?
AB, via email
British citizens who move abroad face a string of financial dilemmas. Whether you can, and should, move your money out of the country is a major decision for many.
You have saved in an Isa for years, enjoying its tax-free benefits, and would like to continue this once you have moved.
However, the rules state that when you move abroad you are no longer able to pay into your Isa after the end of that tax year. So if you were to move in September 2021, you would not be allowed to pay in any funds after 5 April 2022, when that tax year ends.
After this date you are no longer a British tax resident and will not be eligible for an Isa.
The only exception to this rule is if you are a Crown employee working abroad, such as a civil servant, a diplomat or a member of the armed forces.
Those moving abroad should tell their Isa provider when they cease being a British resident.
The good news is that once you’ve moved abroad your existing Isas will remain open and you will continue to enjoy tax relief on any cash or investments you hold in your accounts.
You can also transfer your Isa to another provider, even if you are no longer a British taxpayer.
However, you must double check what the tax rules are in your new country. While Isas are recognised as tax exempt in Britain, other nations may not offer such generous tax breaks to citizens.
This could mean that you are liable to pay tax in your new country on the money earned from your Isa.
As your accounts will remain open and active, if you were to become a British resident again you would be able to resume paying cash into your Isa again, up to the annual limit of £20,000.
Ask the expert: Can I have two Isas?
