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Living abroad: the key steps for managing your finances

Living an international lifestyle creates a whole world of new opportunities. Enhanced career prospects or better pay and benefits are among the main reasons for moving abroad.

Living abroad: the key steps for managing your finances
Photo: Getty

But new opportunities don’t come without challenges. Embracing your freedom to live abroad or across borders could make it harder to plan a path towards financial freedom.

While your language skills and cultural norms may inevitably become caught between places, personal finance is one area you can keep control of. The Local, in partnership with Barclays International Banking, presents the key steps to building a more secure future – no matter where you call home.

Start planning your future today: find out if you qualify for Barclays International Banking 

Digital banking: track your day-to-day outgoings

From same-day deliveries to social media, we live in an age of instant gratification. But when it comes to money, it makes sense to plan for the future.

You can start by ensuring you have a complete view of your finances right now. That may be easier said than done, however, if you use multiple accounts and cards issued in different countries.

Doing all your digital banking in one place could help you better understand your outgoings. If the cost of living in your new location is high, you want to avoid the trap of splurging all your income. If it’s lower than you’re used to, you could make that count by setting some of your salary aside in a savings or investment account.

Currency exchange: be flexible, move fast

You don’t have to be a forex trader to win or lose big on currency fluctuations. If you’re planning a life abroad, the question of how and when to transfer money deserves some serious thought.

This is especially true if transferring large sums because, for instance, you want to buy a property or perhaps close a savings account. Even with smaller transfers, you can make the money work for you by thinking ahead and being flexible about when you trade.

You may want to set an alert for your target exchange rate in a foreign exchange app so you don't miss a favourable market movement. Knowing exactly how you’ll make a transfer is also crucial. Barclays International Banking's foreign exchange service allows you to trade in multiple currencies – with rates that get better, the more you convert.

Savings & Investments: select your strategy

Living internationally requires you to grow as a person. But what if negotiating culture shock and red tape deprives you of the mental energy needed to grow your savings?

Try not to get overwhelmed by having money in more than one country. Think about what matters to you and select a strategy to match your goals. 

Start simple: for instance, save a fixed percentage of your income each month – and use automated transfers so it’s done before you can spend it!

If you’re investing, consider the risk-reward ratio and pick a strategy. Maximising long-term growth to fund an early retirement is very different from seeking safe, regular returns to support you and your family as you set up a new business.  

Find out today how Barclays International Banking can support your international lifestyle

Property & Family: trust matters 

Few decisions shape your life more than buying a home. If you’re discussing your future with a partner, you need to plan ahead wherever possible. Your dream home won’t come cheap. Nor will any kids!

Photo: Getty

In many countries, you still have the chance of securing a mortgage with a fixed, long-term low interest rate. But if you’re new to a place, take time to understand the local conditions – asking a few locals what they consider to be a good deal might offer valuable insights.

If your thoughts are turning to your legacy, you may want to take professional advice on estate planning and local inheritance laws. Trust is key when it comes to the more personal aspects of personal finance.

Tax & Pensions: pay attention not penalties

As an international resident, you’ve almost certainly attracted the attention of more than one tax authority. So, make sure you know exactly where you’re liable to pay tax.

If you’re an employee abroad, the hard work may be done for you with tax deducted from your salary each month. But if you’re self-employed, plan for the tax bills to come – and how they’ll differ from what you’d pay in your home country. 

Some workers, such as cross-border commuters or those on temporary postings, could be at risk of double taxation. Check any rules you’re not sure of with the relevant tax authority to avoid waking up at 3am in a cold sweat. 

You may also want to check the legal retirement age in your adopted country. Want to consolidate your pension? Look into official transfer schemes, such as the qualifying recognised overseas pension scheme (QROPS) for people who want to move UK savings abroad.

Barclays has been managing clients’ money for more than 330 years and has regional expertise across the globe. Click here to find out how Barclays International Banking can help you move towards all your financial goals, wherever life takes you.

 

For members

MONEY

EXPLAINED: How to make a will in Austria

Making a will can be a daunting process, especially when living overseas. The Local spoke with lawyer Maximilian Harnoncourt to understand more about getting your affairs in order as an international resident in Austria. Here's what you need to know.

EXPLAINED: How to make a will in Austria

Making a will in Austria

Under Austrian law, a will is a legal document that states who should inherit which assets when someone dies.

According to the legal website Erbrecht-ABC, the easiest way to make a will is for someone to write it themselves by hand and then sign it. This is known as eigenhändiges Testament and can be done without the presence of a notary, lawyer or witness.

A will can also be typed (fremdhändiges Testament) but still has to contain, “This is my last will and testament” in handwriting. 

READ ALSO: EXPLAINED: Property buying rules for international residents in Austria

In the case of a typed will, the law states it must be witnessed by three people who then sign the document.

Then there are notarial or judicial wills, although these types of will are rare. 

Any special process to be aware of?

Lawyer Maximilian Harnoncourt, from Schneider & Schneider Rechtsanwalts, said that anyone making a will in Austria should formally register it with a notary or lawyer so that it can be submitted to the Austrian Central Register of Wills

Harnoncourt told The Local: “The advantage of going to a lawyer or a notary is that professionals will make sure that the formal requirements are met and that your will is valid.

“Since lawyers and notaries are obliged to record the will in a register, you have the guarantee that the will is actually taken into account after your death.”

However, it’s worth noting that the Central Register of Wills does not contain actual wills. Instead, a lawyer submits an official record of the creation and filing of the will to ensure that when someone dies, the will can be found.

READ NEXT: Visas and residency permits: How to move to Austria and stay long-term

Can foreigners make a will in Austria?

Under Austrian law, anyone living in the country (even international residents) can make a will.

Harnoncourt said: “In principle, people living in Austria can make a will according to Austrian laws and are treated the same as Austrians.”

But the validity of an Austrian will overseas depends on where the person was living when they died or if there are additional assets to be considered, as Harnoncourt explains.

He said: “Whether a will is valid abroad can only be determined on a case-by-case basis. The question is mostly relevant if you move to another country or if there are assets in another country.

“In principle, in the EU (there are special rules for Denmark and Ireland), a will is also valid in another EU country if it is valid according to the regulations of the country in which it was made.

last will and testament

(Photo by Melinda Gimpel on Unsplash)

“However, you should always seek advice from a lawyer if you have significant assets abroad or if you intend to move your residence to a non-EU country.”

So, is it actually worthwhile for international residents to make a will in Austria?

Harnoncourt says yes – especially if you want to distribute your estate differently to Austrian inheritance laws (more on that below), or if there are special instructions.

He said: “As an international resident you can choose whether Austrian laws or the laws of your citizenship shall apply. For example, to avoid mandatory portions going to children under Austrian laws.”

FOR MEMBERS: Everything you need to know about Austrian inheritance laws

What is Austria’s inheritance law?

In Austria, if a will is not made, the entire estate will go to the heirs due to Austrian succession of inheritance laws.

This means the children (or grandchildren) will inherit two thirds of an estate, while the spouse is eligible for one third. Since 2017, parents are no longer included in forced heirship (known as Pflichtteilsrecht) in Austria.

If there are no heirs or life partner, then the Federal Government handles the estate of the deceased.

Additionally, there is no inheritance tax in Austria, but there is a real estate transfer tax, which is 3.5 percent of the purchase price of a property.

How much does it cost to make a will?

As with most things related to law, making a will is not free. But the costs can vary depending on the type of will made and whether you need legal advice.

The Austrian federal government website states there is a one-time fee of between €300 to €500 to hire a notary and register a will. This covers the cost of advice, professional drafting, filing and registration in the Central Register of Wills.

The cost of filing a will that is handwritten without any legal advice is around €100, plus expenses and sales tax.

The cost of hiring a lawyer to handle a will can vary and there will still be a one-time fee to submit the will into the Central Register of Wills.

Useful vocabulary

Will – das Testament

Inheritance – das Erbe

Notary – der Notar

Lawyer – der Rechtsanwalt

Useful links

Find a notary in Austria at notar.at.

Austrian Bar Association (Österreichischer Rechtsanwaltskammertag)

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