If you’re an Australian who’s been in the UK for some time, you may well be planning to return home at some stage soon.
The desire to return will understandably be strong. With the strict restrictions on travel to Australia likely to be lifted in the first half of this year, and an economic boom driven by pent-up demand widely forecast, you could be thinking that 2022 could be the time to go back.
Against that, it’s likely that you’ve developed strong ties to the UK in the time you’ve been here. You’ve built a good lifestyle for you and your family so leaving all that behind will be less than easy.
So, here are six important issues to consider if you’re thinking of returning to Australia.
1. Two heads are better than one
It’s worth pointing out up front that all the points and issues you’ll read here apply equally to your spouse or partner as well as you.
Shared decisions always tend to be more effective and are likely to have a more positive outcome than the ones you make on your own. So, you should include your spouse or partner in your planning process.
While children – especially younger children – can be very adaptable and adjust to most circumstances, they should also figure highly in your planning.
Even if you’re single, it’s still worth getting advice and guidance from a third party.
2. You should have a plan in place
As with any big project, such as moving yourself and your family halfway around the world, having a plan in place is essential.
It doesn’t have to be complicated at this stage. If you’ve only just started the thought process, then it’s likely it won’t be much more than a series of subject headings. You can add to your plan as you go forward.
Some of the headings you should be thinking of including in your plan are:
- Financial issues
- Employment (or retirement)
- Family considerations
- Transferring assets.
3. You should have an idea of your future work plans
We’ve put “financial issues” at the top of our list of considerations. That will obviously include the cost of moving, but also cover your income when you return to Australia.
If you know you’ll have a job to go back to, then you have a clear head start. You may own a business in Australia that you’ll be able to return to, or the job you do in the UK is easily transferable.
But, if that isn’t the case, you’ll need to plan ahead. Employment conditions in the sector you work in may well have changed since you left Australia, so some research would be prudent.
4. You’ll need to plan ahead if you’re returning home to retire
It could well be that you’ve finished your working life and you’re planning on returning to Australia to retire.
If this is the case, you’ll want to consider the financial issues around this.
As a first step, you’ll want to get up-to-date values of all your pension arrangements, both in the UK and any super funds you have in Australia.
If you’ve built a big pension fund in the UK, you’re in a very advantageous position when it comes to your future tax liabilities.
You’ll have benefited from very advantageous tax incentives on contributions you’ve made to UK pension schemes. Furthermore, after you’ve transferred any accrued funds to an Australian super, you’ll then be able to withdraw from the fund on a tax-free basis. It’s very much a “win-win” scenario that you should look to take full advantage of.
You should also note down any other sources of income you’ll have when you return.
These could include:
- Personal savings
- Investments, such as stocks and shares
- The value of any UK property you’re planning to sell
- Other assets in Australia.
You then need to think about how accessible these sources of income are, and what steps you’ll need to take to draw on them.
Getting specialist advice when you’re emigrating is always a key step. On this issue, we strongly recommend that you get guidance from a financial expert as mistakes or missteps can prove costly.
5. Consider the costs associated with your return to Australia
There are a series of costs and expenses relating to your move back to Australia that you’ll need to factor in.
As well as the actual cost of your return flights, these could well include:
- The cost of shipping your possessions back to Australia
- The transfer of any financial assets
- The sale of any property in the UK, assuming you’re not planning to keep it as an asset
- Any tax implications resulting from your move from one tax authority to another.
As with your pension planning, we’d recommend you use financial specialists where necessary. For example, a currency exchange expert can help you get the best rate on your money transfers while a tax adviser can help manage your move to help mitigate your tax position.
6. Decide where you’ll live
It’s likely that you could have property issues to address at both ends of your journey home.
If you’re planning to sell any property you have in the UK, you’ll need to manage this carefully. It’s possible that you may not be able to sell before you return to Australia, so you’ll need to appoint someone to act on your behalf.
Alternatively, you may decide to hold on to your UK property for a time and rent it out to provide an income. In this case, you’ll want to appoint an experienced letting agent to manage it for you.
You may well also have a property in Australia that you intend to live in. So, you’ll need to ensure that, if it has been rented out, the tenants have moved out and it’s in a suitable condition for you to move back into.
If you don’t have a property in Australia, you’ll need to decide where you want to live and take steps to ensure you have a property to move into on your return.
Rather than rushing this, you might want to consider renting somewhere for a short time so you’re able to look for the home you want without being under time pressure.
Get in touch
Many of the issues you’ve read here are financial, and we can’t overstate the importance of getting professional advice.
So, when you first start thinking about whether you want to return to Australia, please get in touch with us. As dual-registered financial planners, we’re uniquely placed to help you with the financial implications of your move back to Australia.