The good news is that with careful planning, you can limit the damage and reduce the danger of a shock tax bill or hefty financial penalties.
One of the easiest ways of doing this is to hold shares, funds and other investments in an offshore account based in a reputable and regulated international centre such as Luxembourg. That way your income and growth can roll up free of tax until you are ready to withdraw it.
However, if you have assets back home, especially property, you are likely to have tax and reporting obligations over there.
It is worth brushing up on your home country's rules, as every tax authority takes a different view
You can make your portfolio more tax efficient by using an investment platform operating in a stable, well-regulated offshore centre.
For example, Internaxx is based in Luxembourg, an ‘AAA’ rated financial centre known for its stable economy and strong investor protection, so your assets will be safe.
Investing offshore allows any income and growth to roll up free of tax, with your gains only becoming taxable when you cash in your investments.
This puts you in control as you can realise those gains at a time of your choosing and in the most tax-efficient jurisdiction, whether your home country or anywhere else. If you also generate savings interest or royalties back home, or dividend income and capital growth from shares or funds, you will probably have to pay local taxes on them and need to plan for the cost.
Paying tax back home
As a general rule, property is taxed in its physical location, rather than where you are resident.
So if you own property back home then you are likely to pay tax on any rental income, capital gains from a profitable sale, and local authority and property taxes, no matter how long you have been living away.
Tax rules can change from year to year so you need to keep up to date with the latest developments, which may change over time.
Those with multi-jurisdictional estates should make sure they have written a proper will, to avoid a shock inheritance or estate tax bill when they die.
Expats typically pay income tax on their employment earnings in their country of residence, with a few exceptions.
In most cases, residency is determined by the 183-day rule, which states that if you spend more than six months in a particular country, you are resident there and subject to local taxes.
As always when it comes to tax, there are exceptions to every rule. Other factors may come into play, such as where your main work or business is based, where your bank accounts are held, the location of your property and other assets, and whether your family is living with you.
A handful of countries take a tougher line, by taxing non-residents as well, the US being the most glaring example.
It is one of the few lands that claims the right to tax its citizens wherever they reside in the world. Expats can exclude a certain amount of foreign earnings to avoid double taxation, but must nonetheless file a return to the Internal Revenue Service.
From March 2020, South Africa is planning to charge its expats income tax at up to 45% on their foreign employment earnings, if they exceed one million rand. These are now two of the most punitive tax regimes in the world for expats.