What is an expat?

One of the most popular questions posed of our team is "what is an expat?"

The term "expat" or "expatriate" means so much to so many different people, but what actually is an expat?

As you’re probably aware, expat is an abbreviation of expatriate which in itself is a word derived from two Greek words: “Ex” (meaning out of) and “patria” (meaning fatherland).

Definition of expat

So, what is an expat? In the simplest terms an expat is defined as a person who is living away from their native country or place of birth or nationality, either temporarily or permanently.

In truth, the term itself carries no real legal standing and is therefore used to describe people with all manner of backgrounds. However, it is not usually associated with people seeking asylum or permanent migrants.

It is more commonly used to describe people who are temporarily (either long term or short term) away from their home country with the intention of moving "home" in the future, and most often in relation to employment abroad. However, many people who would be considered expats are also retirees who are looking for a different experience in the later years of life.

Uses of the term "expat"

Expat is also commonly used when discussing financial matters of people who are not resident in their country of birth – who would technically be described as a non-resident.

A non-resident is someone who either spends time in a particular country, or has some form of tie there without being tax resident. Quite often, including on this site, people will talk about "expat tax" or "expat pensions" - where specific rules relating to finance can be applied to a wide range of individuals with only one thing in common - their expat status.

Migrant or expat?

The term "expat" can carry connotations. While strictly speaking there is nothing negative, some people who have left their home country prefer to be called migrant rather than expat as an expat can imply that there is less intention to integrate with the local culture.

Some people also believe that an expat is almost exclusively of Western origin who is looking to work abroad.

It is also often said that expats tend to group together in their own communities, which can draw negative stereotypes from certain behaviour, given reason why some people prefer to avoid the term "expat".

We believe that all migrants are strictly speaking expats and that all expats are also migrants and that it depends on a person’s predisposition as to which they prefer.

Non-resident vs Expat

As previously mentioned, being labelled as an expat doesn’t tend to carry any legal significance. What is far more important is understanding the difference between expat and non-resident as being resident or non-resident in a country will make a significant difference to the tax which is paid as well as benefits which can be claimed.

In the UK, the Statutory Residence Test was introduced in 2013 to clarify the rules regarding the UK tax residence status of an individual. Devised of a series of tests, the outcome of which will determine whether you are a tax resident of the UK or not.

Every country has their own specific rules which determine an individual’s tax residence status, and people moving abroad should always seek advice to ensure they know what income they should be declaring and to whom.