Returning to Australia from the UK is still challenging. There are ongoing caps on the numbers of passengers allowed to travel to Australia from overseas – and it’s likely that these restrictions could persist for some time.
The official advice from the Australian High Commission in London is that if you’re overseas and wish to go home, be prepared for delays and disruptions to your travel.
Even if you can get home, there’s an enforced period of quarantine to get through and then restrictions on travel within Australia.
We appreciate the impact this type of enforced separation is having on families and groups of friends.
If you are stuck in the UK and unable to return to Australia, here are six things to think about.
1. You’ve got time to plan your return to Australia carefully
Clearly the delay in being able to return to Australia is frustrating in the extreme. One silver lining, however, is that it gives you the chance to plan your eventual return carefully, and potentially save yourself a lot of money.
For example, if you can choose exactly when to move, there are certain tax advantages and other considerations that could have a bearing on your timing. By consulting with a tax specialist, you can avoid making avoidable and potentially expensive errors.
On top of that, having time to get the best possible exchange rate on currency exchange can also save you money. For currency transfers, we’d always recommend using an exchange specialist. The exchange rates will typically be preferable to using your bank or a high street bureau.
2. While you’re in the UK, maximise your pension contributions
Whilst you’re in the UK, and assuming you’re working, it’s worth taking every opportunity to maximise your pension contributions.
Unlike in in Australia where you pay tax when you make contributions to your super, in the UK you don’t pay tax on money you pay in. In fact, there are tax incentives on all contributions paid, which means that, as a basic-rate taxpayer, for every £100 you pay in costs you just £80.
This effectively gives you immediate growth of 25% on the money you pay in, even before you start investing it.
There are also big opportunities when it comes to transferring any accrued UK pension funds to Australia. This is because of the different tax regimes applying to pension assets.
3. Plan your tax situation carefully
Non-UK residents are not subject to Capital Gains Tax (CGT). This means that you are able to sell any UK assets once you’ve given up your UK tax residency status and not pay CGT.
However, once you’re back in Australia, any capital gains on assets in the UK will be assessable to Australian tax. Timing is therefore crucial.
For example, UK ISAs will be subject to Australian CGT and so it may be best to cash them in before leaving the UK, then reinvest in Australian assets once you’re an Australian tax resident.
Advice from a tax expert is essential. With careful planning, you can avoid simple mistakes that could leave you with an unexpected bill.
4. There’s a big contrast between the UK and Australia
While we would never question the frustration you feel in not being able to return home, we would point out just how restrictive lockdown is in Australia.
More than 18 months on from the start of the pandemic, many parts of Australia are still facing severe restrictions on movement and travel.
We looked at the impact of lockdown on Sydney in a previous article, and parts of the state of Victoria are only just coming out of their sixth lockdown in 18 months. Restrictions included remaining in a 5km radius of home and anyone over 12 having to a face covering inside and outside after leaving their properties.
The situation in the UK offers a stark contrast to that in Australia.
Aside from requests to wear masks on public transport and in shops, life is effectively back to normal. Workplaces have reopened, as have bars, restaurants, and cinemas. There are no restrictions on the number of people who can gather in one place, so sports events and concerts are being played in front of capacity crowds.
5. Your return to Australia could coincide with a big economic boom
As we covered last month – lockdown in Australia has had a detrimental impact on all sectors of the economy, including tourism, construction, and manufacturing.
The lack of economic activity is clearly suppressing demand, which means that there’s every chance of that demand rocketing when the situation does start returning to normal.
So, if you’re currently stuck in the UK, it’s very possible that your return to Australia could coincide with a big economic boom and an economy growing faster than at any other time in recent history.
6. Your family in Australia are being protected
It’s worth bearing in mind that the Australian government lockdown policy – often referred to as “Fortress Australia” – has been successful in terms of keeping the pandemic death rate as low as possible.
The priority was to protect Australian citizens, particularly the elderly. The Stastia website confirms a remarkably low mortality rate of just 50 per million. This is the fourth-best rate in the developed world and puts Australia in the top quartile of all nations.
After a lot of valid criticism over the sluggish roll-out of the Covid vaccine, there are signs that the emergency steps taken by the government to improve this have started to have an effect. Over 50% of the population are now fully vaccinated.
All this means that the government target of them being able to lift travel restrictions by mid-2022 is likely to be easily met.
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