Think You'll Never Go Back? The Reality of Returning Home for Expats in Europe

According to a recent article in The Times, around 99,000 Britons emigrated last year, but 61,000 returned. While you might be confident that you'll never go back, the reality is that returning home could happen sooner than you think.‍

If you're an expat living in Europe, you’ve probably said it more than once: “I’ll never go back home. This is where I’m staying.” The European lifestyle, the opportunities, the culture, it can feel like the ideal place to plant roots. But what if I told you that for many expats, the return home isn’t as distant as they think? In fact, you could be just one life event away from becoming a reality.

The Inevitable U-Turn You Didn’t Plan For

Let’s be honest: How many times have you said you’re never going back? It’s a common sentiment among expats, especially in places like Spain, France, or Italy, where the work-life balance and Mediterranean lifestyle can be hard to beat.

‍
But here’s the thing: Life can throw unexpected curveballs, and returning home doesn’t always happen when you plan it. Whether it’s family emergencies, changing job markets, or the inevitable pull of home (sometimes at the most inconvenient times), returning home could be closer on the horizon than you think.

When Life Decides It’s Time to Go Home: Whether You Want To or Not

Sure, you’ve built a life in Europe. But factors beyond your control can quickly shift the equation. Whether it’s an aging relative back in the UK, a change in employment, or simply the reality that the grass isn’t always greener in Europe long-term, there are plenty of reasons why returning could become more of a necessity than a choice.
In fact, some of the most common situations that prompt expats to return home unexpectedly include:

• Family emergencies: A sudden illness or need to care for loved ones back home can bring the need to return swiftly.
• Economic changes: Changes in the job market or taxation in your host country can force you to reconsider your long-term plans.
• Retirement planning: For many, the question of where to retire can make returning to the UK more attractive.

You might be living your best life now, but one change in circumstances could send you rushing to get your finances in order to head home.

Why Even the “Never Going Back” Expats Should Plan for a Return

Even if you have no intention of ever returning to the UK, being prepared for the possibility is crucial. The truth is, even if you plan to stay in Europe forever, your financial plans need to be flexible enough to handle a swift change of course.

Here's why planning for a return matters, even if you’re not quite ready to pack your bags:

• Tax Implications: If you’ve been living in Europe for a while, your tax position is likely very different from what it would be in the UK. Returning home might involve a complicated tax return, capital gains, and potential inheritance tax on assets accumulated abroad. If you don’t plan ahead, the tax implications could be a shock.
• Pensions: You might have a nice European pension, or some benefits tied up in your host country. But what happens when you return to the UK? Will these benefits be taxed differently, or could you consolidate them into a UK pension plan? It’s critical to know your options.
• Residency Rules: The UK’s residency rules are a maze, and depending on your time spent abroad, your tax situation could get complicated when you return. Understanding your residency status, before you have to make that sudden return, can save you from unpleasant surprises. The Statutory Residence Test (SRT) can help clarify this.
• Insurance & Healthcare: What about your insurance or healthcare coverage? Are you covered in the UK if something happens suddenly while you're living abroad? It’s a common oversight, but ensuring your coverage aligns with your home country’s system is critical.

How The ‘Never Going Back’ Mindset Could Be Costing You

We get it: Returning home isn’t in your plans. But let’s consider this for a moment: what if you did have to return quickly? Being prepared can mean the difference between a smooth transition and a financial nightmare.

Consider these common mistakes expats make when they delay their repatriation plans:

• Ignoring Tax Liabilities: Failing to structure your investments or pension plans to accommodate the tax rules in both your host country and the UK could cost you significantly when you do return.
• Underestimating the Cost of Returning: From selling property to converting currency, the costs associated with returning home can quickly spiral out of control without proper planning.
• Leaving it Too Late to Review Assets: Property in Europe, bank accounts, and investments might be subject to different regulations when you leave. Failing to review your portfolio with a financial adviser before heading home could mean hefty tax penalties and lost opportunities.

Be Ready for the Unexpected

You might not want to go back to the UK, but what if the time comes when it’s no longer just an option? Whether it’s a family emergency, retirement plans, or unexpected changes in your life circumstances, being ready is just as important as planning your future in Europe.

‍
The reality is, it can happen faster than you think, and being unprepared for it can mean facing a financial mess you didn’t see coming. Even if you’re sure you’ll never return, planning for the worst-case scenario ensures you’re not caught off guard. We help expats in Europe plan for the unexpected, managing their finances and creating flexible strategies for whatever life throws their way.

Prepare for Tomorrow, Today

If you’re ready to take control and make sure you’re financially prepared for whatever comes next, it’s time to start planning, even if it’s not on your radar. At Skybound Wealth, we understand the ins and outs of expat life in Europe and can guide you through the process, ensuring your finances are structured properly for any eventuality.

‍
Reach out to one of our advisers today to discuss how we can help you prepare for the next chapter, whether it's staying abroad or returning home. Don’t wait for the unexpected to force your hand; get ready for whatever the future holds.