Relocating abroad from Australia is a busy time and its easy to forget some of the more important things. Here are 5 important things you should not forget when moving overseas.
1. Determine Your Tax Residency
When relocating abroad, the single most important question to ask yourself is Am I An Australian Resident For Tax Purposes? You may still be an Australian resident for tax purposes if you move overseas, and this can have significant implications on how much tax you will pay, and what the best investment strategy is for you while living abroad. You can read more in my article Am I An Australian Resident For Tax Purposes? or for more detail download my Special Report on the Tax Implications for Australians Living Abroad.
2. Review Your Health Insurance
Depending on the rules of the country you are relocating to, you may or may not be eligible (or may not want) to receive public medical care. If so, when preparing to leave Australia, you will want to consider taking out an international health insurance policy which will provide health cover while you are living overseas. There are a number of companies that offer international health insurance, with different levels of cover. Cigna Global and Bupa International are two such companies. You can easily obtain a free quote on their websites to see if international health insurance is right for you.
You should also consider whether or not you need to retain your private health insurance in Australia. If you remain an Australian resident for tax purposes when relocating abroad then you will remain liable for the Medicare Levy Surcharge if you don’t retain private health insurance and your income exceeds the relevant threshold. For more information, I have a Special Report on What Every Australian Expat Needs to know about Medicare and Health Insurance available to download here.
3. Open an International Money Transfer Account
If you are going to need to transfer money between Australia and your new country of residence you have a number of options.
- You could just make an international bank transfer through your bank (and pay large fees, have no certainty on the exchange rate, and wait a number of days for your money to arrive).You could setup a multi-currency bank account, however this may or may not be suitable for you depending on what currencies you deal with, where in the world you are, and how you use your bank accounts. Some of the multi-currency accounts available offer competitive exchange rates, but can have high monthly fees and transaction fees.
- Open a multi-currency bank account with a bank. This won’t work for everyone as they can have some significant fees and transaction limitations; or
- Use an online International Money Transfer company. These companies offer extremely competitive exchange rates and low fees, and it costs nothing to setup and maintain your account. These companies provide a very efficient online service whereby you transfer to them your money in one currency, and they deposit your desired currency into your nominated bank account (in Australia or abroad). Some of the companies only operate in certain currencies, however HiFx and OFX / Ozforex operate in most countries and currencies around the world. As you need to provide copies of current address and identification, it is a good idea to open an account prior to relocating abroad as you then will have all the necessary documentation available.
More information on international money transfers can be found here.
4. Obtain a Tax Depreciation Report on Family Home
If you own your own home in Australia, relocating abroad might be the first time you become a property landlord. Ensure you maximise your tax benefits by claiming depreciation on the property. In my article on rental property depreciation I explain in detail the benefits of depreciation. Essentially, depreciation is a tax deduction you can claim that represents the loss in value of the building and fittings of your property during the course of the year. Depending on the age, style and size of your property it may be possible to obtain in the order of $3000 to $10,000 per year in depreciation tax deductions.
The best time to get a depreciation report is when you start renting out your property. In order to claim depreciation tax deductions you will require a depreciation schedule prepared by a licensed quantity surveyor. I have used Washington Brown, and have negotiated a $55 discount when you request a report via the links on this page, or when using this application form. The cost of a depreciation schedule is usually tax deductible, and the cost will usually be made back in reduced tax in your first tax return. While it is best (and most convenient) to obtain a depreciation schedule before you start renting your property, it is never too late to get one. In addition, just because you may have purchased an older property, does not mean there won’t be good depreciation deductions available.
Disclaimer : This information is for educational purposes only and does not constitute financial or taxation advice. As this information is not advice and has been prepared without taking into account your objectives, financial situation or needs you should, before acting on this information, consider its appropriateness for your circumstances. Independent advice should be obtained from an Australian financial services licensee before making investment decisions, and a registered (tax) financial advisor/accountant in relation to taxation decisions. To the extent permitted by law, we exclude all liability for any loss or damage arising in any way. We may receive referral commissions from companies mentioned in this article.