Should You Keep Your UK Bank Account After Moving Abroad?
Moving overseas can mean making a long list of financial decisions. What happens to your home? What do you do with your pension? How will you transfer money between currencies? And, perhaps less obviously, should you keep your UK bank account?
For many British expats, keeping a UK current or savings account can be useful. If you still have income, property or financial commitments in Britain, having an account here may make managing them simpler.
But keeping a UK bank account isn’t automatically the right choice for everyone. Your bank’s rules, the country you’re moving to, the type of account you have and your wider financial circumstances all matter.
GoSimpleTax take a look at what to consider before deciding whether your UK account still has a place in your financial life overseas.
Why might you want to keep a UK bank account?
Leaving the UK doesn’t necessarily mean leaving all your UK financial commitments behind.
You might continue to receive:
- a UK State Pension or private pension
- rental income from a UK property
- interest or dividends from UK savings and investments
- other UK income
You may also still have bills to pay in Britain, such as a mortgage, insurance or other regular commitments.
Keeping a UK account can therefore provide a straightforward place for money coming into and going out of the UK, without having to convert everything into another currency.
Your UK State Pension, for example, can be paid into either a UK bank or building society account or a bank account in the country where you live.
For someone who expects to maintain a financial connection with Britain, keeping an existing account may therefore be convenient.
But don’t assume you can simply keep everything as it is
One of the first things to do before moving is to check your bank’s rules.
Banks and building societies have their own policies regarding customers who become resident overseas. The position can also depend on the country you’re moving to and the particular products you hold.
That means you should contact your bank before you move and ask:
- Can I keep my current account if I become resident in another country?
- Do you need my overseas address?
- Will my account or fees change?
- Can I continue using online and mobile banking?
- Are there restrictions on any savings, credit or investment products I hold?
- What happens if I later move to another country?
Don’t assume that because you’ve had an account for years, everything will continue unchanged after you become an overseas customer.
There have been cases where UK financial services have been affected by banks’ ability or decision to continue servicing customers in particular overseas countries, so it’s worth checking your own provider rather than relying on what another expat has been told.
The biggest question: where will your money actually be used?
The answer may be different depending on how you live.
Imagine you’re a British expat living in Spain. You might receive a UK pension or rental income into a UK account, while your everyday expenses; food, utilities, rent and other bills, are paid from a Spanish account.
Having both accounts could make sense.
Your UK account could deal with your UK financial commitments, while your local account handles your day-to-day spending.
However, moving money between the two introduces another consideration: currency exchange.
If your income arrives in pounds but your expenses are in euros, dollars or another currency, exchange rates and transfer charges can affect how much money you ultimately have available to spend.
A bank account that is convenient isn’t necessarily the cheapest way to exchange currency, so it’s worth looking at the overall cost rather than simply asking whether you can keep your UK account.
What if you still own a property in the UK?
This is particularly relevant for British expats who don’t sell their UK home when they move overseas.
If you rent out the property, you’ll still have UK rental income to consider. UK rental income remains within the UK tax system even when the landlord lives abroad. The Non-Resident Landlord Scheme can also apply where the landlord’s usual place of abode is outside the UK.
A UK bank account can make receiving rent and paying UK property-related costs straightforward, but the banking arrangement doesn’t remove the underlying tax responsibilities.
Depending on your circumstances, you may also need to report the income to HMRC through Self Assessment.
The important point is that your banking arrangements and your tax position are two separate questions.
Does keeping a UK bank account make you a UK tax resident?
No, having a UK bank account does not, by itself, make you a UK tax resident.
UK tax residence is determined using the Statutory Residence Test, which considers factors including the amount of time you spend in the UK, your work and your connections with the UK. Each tax year is considered separately.
Your bank accounts can form part of the evidence HMRC considers when looking at someone’s circumstances, but they are only one piece of evidence among many. They don’t decide your residence status on their own.
This is an important distinction for British expats.
You could live overseas, keep a UK bank account and be non-UK resident for tax purposes. Equally, someone can live abroad and still be UK resident for tax depending on their circumstances.
So don’t close, or keep a bank account because you think it will determine your tax residence. Work out your residence position separately.
What about interest on your UK savings?
If you keep savings in a UK bank account, don’t forget about any interest they generate.
The tax treatment of UK savings interest depends on your circumstances and residence status. HMRC has specific rules for investment income received by non-residents, while UK residents will generally need to consider their worldwide income.
If you’re living overseas and continue to receive UK income, you may still have UK tax obligations. HMRC specifically identifies income such as UK rental income, pensions, savings interest and wages as income that can remain relevant for people living abroad.
Whether that means completing a UK tax return will depend on your individual circumstances.
Could you be taxed twice?
Potentially.
If you’re living overseas, your country of residence may tax income that also has a UK tax connection. Double Taxation Agreements between the UK and other countries can provide relief in certain circumstances, but the rules vary according to the particular agreement and type of income.
For example, UK pensions, bank interest, dividends and rental income can all have different treatment under the relevant tax rules.
This is another reason not to assume that moving your money from a UK bank account to an overseas account automatically changes where tax is due. Where your bank account is held and where you are tax resident are different questions.
So, should you keep your UK bank account?
There isn’t one answer that applies to every British expat.
Keeping one could make sense if you:
- receive UK income
- own UK property
- have regular UK bills or financial commitments
- receive a UK pension
- regularly spend time in Britain
- expect to return to the UK in the future
You might decide you don’t need one if your financial affairs are now entirely overseas and maintaining the account creates unnecessary fees or administration.
The important thing is to look at how you actually use your money, rather than assuming that becoming an expat means you should either close every UK account or keep everything exactly as it was.
A simple checklist before you move
Before leaving the UK, consider:
1. Check your bank’s overseas policy
Find out whether your account can remain open at your new overseas address.
2. Review your accounts and products
Check whether moving abroad affects any savings, credit or other financial products.
3. Work out where your income will be paid
Think about pensions, UK rental income, investments and other UK income.
4. Compare currency costs
If you’ll regularly convert pounds into another currency, look beyond your bank’s account fees and consider exchange rates and transfer charges.
5. Separate banking from tax residence
Keeping a UK account does not determine whether you’re a UK tax resident. Consider the Statutory Residence Test separately.
6. Keep good records
Bank statements and other financial records can be important when dealing with UK income and completing a Self Assessment or UK tax return, if one is required.
The bottom line
For many British expats, a UK bank account can remain useful long after they’ve left the country. But it shouldn’t simply be left on autopilot.
Check that your bank will continue to provide the services you need, think about where your income will be paid, consider the cost of moving money between currencies and make sure you understand any UK tax obligations that remain.
Most importantly, don’t confuse your banking arrangements with your tax residence. Moving overseas can change your UK tax position, but your bank account isn’t what decides it.
If you do still have UK income to report and need to complete a Self Assessment tax return, having your bank statements and other records organised can make the process much easier.
