credit scores don’t cross borders, a person’s existing wealth in their home country is of little help in getting them set up in a new country. “As soon as you move to another country, it’s a blank slate,” says Debra Moses, who heads BDO’s Expatriate Tax practice. “Your credit history doesn’t follow you. You can’t get mortgages – you can’t get anything.” Moses relates the example of a high-net-worth individual who relocated to the U.S. This person owned several properties in Canada and wanted to maintain his mortgages on them for tax purposes. At the same time, he was not getting a good rate and approached a U.S. bank to see what he could do to get a better one. “The bank asked his wife to co-sign,” Moses says. “She had no money, but because she held a credit card from a U.S. store, she had a credit history in the U.S., while he didn’t. The point is, it doesn’t matter what you have. You’re a new person in each country you go into.” GLOBAL BANKING Dealing with a bank that operates in both jurisdictions can relieve a lot of the financial headaches, advises David Kuo. Kuo is vice president and head of network for Ontario at HSBC Bank Canada – a bank that operates in Canada and also has a global network. (Others include RBC and TD Canada Trust, though the depth and reach of the network varies from bank to bank.) For people relocating to Canada from abroad, most Canadian banks have some kind of program to help them get set up with a credit score. In the case of HSBC, says Kuo, “Even if they have no credit, we can provide a first credit card to them to help them get a credit score here.” Where HSBC has operations in both countries, it’s more straightforward. “We can get a credit score for them by accessing their home branch through our Credit Reference program.” Kuo adds that experienced expats with a new assignment – and the relocation professionals handling their move – know the importance of getting a head start by setting up a bank account in the destination country before they move. A globally active bank can also make it easier for relocated employees to manage assets back home and transfer funds there as needed. For example, if they are renting out their home while they are away in anticipation of resuming residence when they return, HSBC offers GlobalView. It provides a unified view of accounts in multiple countries and eases transfers, although potential anti-money-laundering limits must be taken into account. “Each country has its own requirements when it comes to transferring funds,” Kuo says. “In many countries, transfer- ring funds is actually quite seamless, but the employee should always ask if there are restrictions on the amounts that can be transferred.” An employee’s pension plan can also be affected by relocation. “[A transferee] should understand how their pension is going to operate when they go on a long-term assignment,” Tollstam says. “Do they want to stay in their home-country pension or go into one in the host country?” The advantage to maintaining the home country pension is that the employee is familiar with it. It is also a better option if the employee receives multiple overseas assignments. “Let’s say they went on three assignments of four years each,” Tollstam says. “That would be 12 years in their home country plan, or they would be in three different plans for four years each. Obviously, it would be better for them to stay in their home country plan.” Tollstam recalls one client who spent two decades in different countries with the same employer. “He came to me when he was 53 years old and told me he didn’t seem to have a pension. He said the employer had put him in a local plan for each new assign- ment. They didn’t want him to stay in when each assignment ended, so he cashed out each time… and, as he put it, ‘the money kind of got spent.’ Now he’s 53 years old with two and a half decades of service, and he has no pension. So sometimes you stay in the home country plan as protection against yourself!” Home ownership is another potential complication, especially given the huge difference between the levels of activity in different housing markets. This is especially important for homeowning employees in highly active markets like Toronto who are given long-term assignments elsewhere. “I’ve seen people sell their home when they relocate, and when they come back – even just three years later – they can’t afford to buy in the same area they left from,” Tollstam says. “You can’t assume the real estate market in the new location will move in tandem with the market you’re leaving. Housing markets don’t go up simultaneously.” In situations like this, having an employer-run managed home program is a real benefit – for the employer as well as the relocating employee. “If you sell your home, the company normally reimburses you for the costs associated with selling the home,” Tollstam says. “Think about how expensive that is; they pay the commission costs, the transfer taxes, all those things. It’s very expensive, so home management seems like a good deal from the corporate perspective. Because you’re not paying thousands and thousands of dollars in a lump sum.” When it comes to moving money, it pays to remember – no pun intended – that much foresight and forward planning is required, as is a keen eye to the larger picture. A person's existing wealth in their home country is of little help in getting them set up in a new country hallmark lind Group realty ltd., brokerage independently owned and operated Service with Professionalism HALLMARKLINDREALTY.COM 905-841-0000 DIAMOND CLUB PRODUCER Fall 2018 PERSPECTIVES 39