# Contents of Ex-Pat Package ?



## Spy (Mar 14, 2009)

Hi all,

My UK company is looking to set up a US company and want me to move to California for approx. 2 years. I have a family (wife and 2 young kids under 10).

As the company does not have an existing package or experience in this area, it is likely to be negotiable.

Given this, I would be grateful if you could offer some advice.

What should a typical ex-pat package consist of and what should I look out for in terms of gotchas e.g. tax liabilities etc.

All help and advice gratefully appreciated.

Thanks,
Spy


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## Bevdeforges (Nov 16, 2007)

There's no right or wrong about expat packages - and in the current economy, I suspect companies are trying to "economize" by cutting corners, but here are a few of the typical items to include:

1. tax equalization - usually done with aid of a large accounting firm or employee benefits firm. This means that they will reimburse you for all additional taxes you incur from the various elements of your expat package (i.e. over and above what you'd pay on your salary back home). Trick is that this reimbursement is taxable to you, too - so it's a tricky calculation. Usually includes tax preparation services for at least federal and state income taxes.

2. Moving costs and possibly a housing allowance, if you are trying to keep your home back in the UK. (I.e. they pay for housing in the US while you rent out your UK home for two years). Moving allowance usually includes an extra month's salary at each end of the deal to cover miscellaneous costs of replacing electrical appliances and other small household items.

3. Often private schooling costs for your children, with a view to keeping them current with the school system in the UK (i.e. an "international" or British school).

4. Provision of a car while you are in the US - includes insurance and maintenance but may or may not include petrol and day to day running costs.

5. Home leave once a year for the family to return to the UK.

One thing to consider - be very clear about your vacation allowance while in the US. Standard US vacation consists of only two weeks. On expat packages, you may be allowed a month for home leave. But make sure your vacation allowance is spelled out or you could be surprised.

You should also be careful to clarify what the company will do for health insurance and retirement plans while you are in the US. Health insurance plans vary greatly in the US and can have hefty co-pays - but staying in a UK based plan will do you no good while in the US. If you plan on returning to the UK, you should see if you can remain in whatever plans you have back home to avoid having to pay for gaps in your service when you return.

I'm sure others will think of other issues to be aware of.
Cheers,
Bev


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## Spy (Mar 14, 2009)

Thanks Bev.

From your post, does that mean that I should expect my employer to continue paying for my UK health plan as well as a US health plan ?

Also, do you, or others know what a reasonable amount would be for housing costs or how it might be calculated ?

As regards car, would they normally pay for two cars (one for me to get to work and one for my wife to take the kids to school etc) ?

Finally, as regards salary, I have a few more Qs:
- Where would the salary normally be paid, in the US or UK ?
- Has any one had part of their salary paid to an off-shore account to minimise the tax liability (and the remaining part paid in the US (or UK?) to live on ?

Thanks


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## Bevdeforges (Nov 16, 2007)

Spy said:


> Thanks Bev.
> 
> From your post, does that mean that I should expect my employer to continue paying for my UK health plan as well as a US health plan ?
> 
> ...


In my experience (i.e. once with an expat package) - I doubt you can or should ask your employer to pay for two health care plans. It's a bit different when coming from the US as some private health care plans will pay for care and treatment "overseas" if you're on a limited term assignment and not permanently resident there. Your UK health care is kind of a waste of expenditure while you're in the US, as there is no US health care plan that can offer any level of "reciprocity." This is one issue where it's worthwhile for the employer to consult with a benefits company or international accountancy firm.

Housing costs - the US government posts housing costs for various "overseas" posts. The UK government may do the same. These are often used as a starting point for private companies doing overseas transfers.

Car - no, one "company car" seems to be the limit. If you want or need a second car for the wife, you generally have to buy or lease that yourself (on the theory that you'd have to buy your own personal car back home). 

Salary - Until and unless your company has a US office, you may have to be paid in sterling in the UK. But you're still liable for US taxes on the whole salary, and you'll have to arrange to have your "spending money" sent to you on a regular basis, which costs you in bank transfer fees. But, if you have the tax services set up, they (usually an accounting firm) will handle things like quarterly estimated payments. It would actually be far easier (for you) to have your salary paid through the US office, with all the appropriate withholdings taken out. Any special deals (there are some treaty provisions regarding where you pay your social insurances during a "temporary" assignment) should be the problem of the tax advisors to work out because otherwise things get dreadfully complicated.

Also - note the fine print on ads for those offshore accounts. Citizens and/or residents of the US are very often excluded from holding accounts like that, due (I suppose) to the US position that they have every right to information about "US persons" (i.e. residents or citizens) and their bank accounts overseas. You'll have to report all overseas bank accounts to the US Treasury Dept. while you are resident in the US anyhow, so the offshore account won't really be worth the bother.

Have your employer talk to their accountancy firm to recommend who should handle the expat benefits package. (Normally companies get a different firm from the one that audits their books.)
Cheers,
Bev


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