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Relocation from UK to US advice

Relocation from UK to US advice

Old Aug 24th 2004, 8:34 am
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Default Relocation from UK to US advice

Hi,

My company has asked me (and wife and 2 young boys) to relocate to the Washington DC for 2-3 years. As the company is small (20 staff max) and quite young, it does not have a formal HR/relocation package.

We currently own a house - and I am reluctant to sell as it is in a very desirable location next to the sea. Renting it out would be the best option here, either furnished or unfurnished. In DC, I guess we would rent.

Because all this is new to me, what sort of things are reasonable to expect from the company in terms of financial/legal assistance (these are in no particular order).
Can we expect a paid-for fact finding/house finding trip?
What do we need in term of visas, etc?
Will I be expected to pay for the rent in US (friends at larger companies have accomodation paid for them).
What are the tax implications (in UK and US)?
Can I expect paid for trips back to the UK - once, twice a year?
Silly question - wife does not drive, I assume it is easy to pass in US?
Can I buy a car on HP straight away? Even if I rent? Can the company lease one for me?
Is the company liable for all/any moving/storage costs?
Should my income be the same, just converted from £ to $? Or can I expect them to reduce my pay inline with similar skilled jobs in US.
What about other benefits such as healthcare, will these be more expensive?

Sorry for lots of random type questions, but I want to build up a series of questions (with likely answers) to put to my employers.

Many thanks for any helpful replies!

Regards,

Simon.
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Old Aug 24th 2004, 12:49 pm
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Default Re: Relocation from UK to US advice

Simon, good move getting questions like this answered before you start the negotiations with your employer over your relocation package. I'll answer the ones I can:

>Can we expect a paid-for fact finding/house finding trip?

Yes, that's a reasonable expectation. I relocated to join a company in the US who had not done and international relocation before, and they paid for a trip for me, my wife and children to look at the area. They arranged a (dreadful) realtor to take us around and show us houses and apartments.

>What do we need in term of visas, etc?

Assuming you've worked for the company for more than a year (? need to check that) then your best bet is an L1 visa which is for intra-company transfers. Details here (I just did a Google search for "L1" - probably better links out there):

http://www.workpermit.com/us/employer_l-1.htm

Remember that in all this, the visa is the most important thing to get right. If the company hasn't done this before, then make sure they get an experienced immigration lawyer (US based) to do the application - shouldn't cost more than a couple of thousand dollars.

>Will I be expected to pay for the rent in US (friends at larger companies have accomodation paid for them).

That depends very much on how senior you are in the company and what the rest of the package is like. For a 2-3 year trip, you can ask and all the worst that can happen is they say no!

>What are the tax implications (in UK and US)?

I'll leave that to somone more experienced in such things. There's a tax treaty between the two countries, so you should never be taxed twice on the same income. Generally you should be better off if you are "resident for tax purposes" in the US(which you will be, automatically, if you're in the US for more than 180 days in one calendar year, but can elect to be even if you're here for less I think), and pay US rather than UK income tax. If in doubt, have your company put you in touch with a US tax advisor (one with International experience, not H&R Block!), and have them pay for some advice for you.

>Can I expect paid for trips back to the UK - once, twice a year?

Again, what do you do, and how senior are you? I'd think you're really pushing it on this one though!

>Silly question - wife does not drive, I assume it is easy to pass in US?

Stupidly, scarily, dangerously easy to pass. Don't think she'll be able to drive just because she passes her test over here! I would worry that, with the state of public transport in the US (I'm in TX, so know nothing of Washington DC) your wife will be a virtual prisoner at home until she can drive though.

Oh, and expect to pay HUGE amounts for auto insurance for your first 6-months to one year. You would possibly be better off if your wife has a UK drivers license before you go out there, but even with one you can expect to pay anywhere up to $3000 for 6 MONTHS (!) for insurance on one car, since you'll have no driving history here and no US license when you first need insurance.

AIG do a service now where you pay a fee of around $500 (I think) and they will give you very reasonable US auto insurance on your UK diving history and an unsecured credit card. This is an amazing service in my view - well worth the money given the trouble you'll have with lack of credit history here - and I'm just annoyed it wasn't available when I came over. Get your company to pay it for you

>Can I buy a car on HP straight away? Even if I rent? Can the company lease one for me?

Yes, or yes, or yes. My company doesn't do company cars, but them leasing me one would have been easiest. We bought one car with cash from our relocation payment, and one on finance after I'd got bank accounts and a SSN sorted out. You can search the forum for advice of others on buying cars direct from companies like Internationl Car Source (?) who will give you credit on a new car even before you have a Social Security Number.

Which reminds me, you need to read the forums about SSNs, as they're missing from your question. Your wife, with no SSN, will find many things like getting a bank account difficult (but not impossible), and you'll need to file for an SSN immediately you arrive in the US to avoid complications with banks (and to get paid by your company!).

>Is the company liable for all/any moving/storage costs?

Some. All? Again, how senior are you? How much do they want you to go there? We were given what seemed to be a very large amount of cash and told to arrange our relocation ourselves. We spent far more than we were given. But we were moving to a company that had just hired me, and they didn't know how much to pay.

>Should my income be the same, just converted from £ to $? Or can I expect them to reduce my pay inline with similar skilled jobs in US.

Reduced?!? Are you sure people with similar skilled jobs are paid less than you? Search Goolge for a price-of-living calculator, and use a few of them (I don't believe any one is really accurate, but they give a vague idea) to find out if you'll need more or less in DC.

Certainly you shouldn't take a pay-cut. In fact, that could weaken your visa case - the company needs to prove that they have reason to move you to the US rather than hire an American for the job. I would always ask for a raise when making a move of this magnitude for a company.

>What about other benefits such as healthcare, will these be more expensive?

That, I guess, is your biggest understatement! Read these forums. Learn about US healthcare. Then ask to see full details (not a summary) of your company's healthcare plan in the US. You could easily find that if your salary is translated pounds-to-dollars you're still $500 or more per month worse off once you've paid for a healthcare plan. You need to educate yourself about this because it'll be a major negotiation point with your employer.

Give me a little more idea of what you do, and how important it is for your company to get you over there, and I'll have a better idea of how you stand on some of these questions.

Good luck!
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Old Aug 24th 2004, 1:43 pm
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Default Re: Relocation from UK to US advice

Originally Posted by simonbuk
Hi,

My company has asked me (and wife and 2 young boys) to relocate to the Washington DC for 2-3 years. As the company is small (20 staff max) and quite young, it does not have a formal HR/relocation package.
Since you have a wife and family, you probably will not want to live in DC but the surrounding areas. MD, northern VA are extremely expensive places to live and with horrendous traffic. Please check out the cost of renting apartments and houses.

We currently own a house - and I am reluctant to sell as it is in a very desirable location next to the sea. Renting it out would be the best option here, either furnished or unfurnished. In DC, I guess we would rent.
Based on the experiences of other Brits on assignment overseas, it would be best not to sell your home in the UK. Should things go wrong and you need to return to the UK, you will have a place to live. I personally know of an L-1 recipient who had to move him and his family back to the UK in about a 4 week period.

Because all this is new to me, what sort of things are reasonable to expect from the company in terms of financial/legal assistance (these are in no particular order).
These days, I don't think you can expect anything these days. It'll be pretty negotiable since so many employers are cutting back on sending employees on assignment these days. This is particularly pertinent in your case, since your job will be based in DC which is an extremely expensive place to live and work. I really do hope your employer has some kind of budget for sending you to the US 'cos this will be expensive.

<<snip>>
What do we need in term of visas, etc?
This is not a question that you should be asking. Any HR department worth its salt would be telling you what type of visa you and your family will need.

<<snip>>
What are the tax implications (in UK and US)?
When discussing your assignment, I strongly recommend your employer shelling out for a reputable tax accountants to prepare your taxes for the years you are overseas plus the year you return to the UK.

<<snip>>
Should my income be the same, just converted from £ to $? Or can I expect them to reduce my pay inline with similar skilled jobs in US.
What about other benefits such as healthcare, will these be more expensive?
<<snip>>
Your employer should subscribe to something like Mercer.com which provides reports and data for employers who have employees working overseas. Your employer needs to identify the differentials in cost of living, health, cost of education, etc. and Mercer has all this kind of info. It's not cheap but the data is updated and they can provide custom reports, e.g. comparison with your current location vs. where you'll be moving to.
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Old Aug 24th 2004, 1:47 pm
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Default Re: Relocation from UK to US advice

Don't even think about taking an overseas posting if you will be financially worse off.

Expat packages for the US are not normally as generous as for Africa, the Middle East and Asia, but this is what we get:

Prior to taking an assignment: one 'look-see' visit for the potential expat and spouse. (No airfares paid for children, we left ours with their gran!)

Full family healthcare package (husband has to make a contribution each month, can't remember how much but I think it's between $50 - $100 which is quite normal in the US. You have to pay a co-pay each time you see the doc or get a prescription, generally about $10 to $15 for a normal GP visit). The company was with United Healthcare but changed on 1st Jan to 'Aetna'.

A rent allowance (not very generous either) ....however we bought a house and put the allowance towards our mortgage (which is why I think the company isn't very generous with the rent allowances!).

One flight to the UK each year for 'home leave'. These are for economy class. (Children in the UK at boarding school or full-time education until the age of 21 get two free flights a year). It's very important to get into your contract that they will provide flights home in case of death so one can attend a funeral or extreme serious illness in a close family member in the UK (defined as parents, grandparents, close family siblings). The company will pay for spouses but only for children if there is no alternative arrangement that can be made for them. (My dad suddenly died of a heart attack one week after we had spent the Summer in England. The kids had just started their new academic year, so I flew on my own from Singapore back to the UK and my husband stayed behind with the kids. The company paid for my airfare).

Shipping of household goods...depends on size of the family and how long one has been away from the home base. When we went on our first posting we only had a tiny shipping allowance (20 sq. ft) but did get an allowance to buy new electrical goods etc. After 5 years the allowance doubles.

Company policy is that the expat is paid in local currency during all expat assignments (although protected to some degree in countries with unstable currencies).

Provision of $500 for tax consultation fees during the first and last year of an assignment in the US.

What we don't get:
No company car! It's highly unusual for US companies to provide company cars (there is no tax advantage) even in our case where in every other country a company car is provided.

We don't get school fees paid...(US is an English speaking country) and the view is that one should choose to live in an area where there are good public schools. Unlike the UK, Oz, NZ the middle classes in the States rarely send their children to private schools, unless it is for religious reasons or they are very affluent (in our area private schools start at $20k per year for day schools!). However, there is a British school in DC as there is a large diplomatic community there....I would expect that the fees are high.

The company provides the expat package for 5 complete years. Going into year 6 the allowances are halved, going into year 7 then one is 'localised' ie. the allowances cease altogether.

It doesn't make sense to sell your property...keep it and rent it out.
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