So you’ve made the bitter-sweet decision to pack your bags and move abroad. Whether you’re chasing your dream job, looking for a change of scenery or moving closer to family or friends, you need to be prepared before you jump on the plane.
A central part of moving overseas is making sure your personal finances are sorted. From setting up a new bank account to comparing global transfer services to knowing your tax obligations both at home and in your new place of residence, there are many things to consider before you begin expat life.
To help you get started, consider the following points to ensure that you’re financially (and mentally) prepared to move overseas.
Set up a new overseas bank account
If you’re heading overseas, you’ll need to transfer your funds into a new overseas bank account that you’ll use once you get there. Contact your existing bank in Australia to see if they can recommend any banks overseas.
You should also find out what money transfer options are available between the two bank accounts, as you want to ensure that there are no restrictions in place in terms of transfer limits or frequencies. Often, it’s more cost-effective to transfer funds with a specialist transfer provider such as RationalFX than it is to transfer with a bank.
For instance, when you transfer funds with RationalFX, you can save up to 4% on transfers. With a “what you see is what you get” promise, the exchange rate you book is the rate you’ll receive when you conduct the transaction.
Like you would with any financial decision, compare your options and find a bank account that offers a competitive interest rate and few account-keeping fees.
Tidy up your personal debt
Before you embark on your new journey, you should evaluate your existing debt and try to repay as much of it as you can before going overseas.
One strategy for tidying up your personal debt is to merge your debt through a balance transfer or a debt consolidation. For example, if you have more than one credit card account and you find that you’re falling behind on your repayments, you may want to apply for a 0% balance transfer so that you can service the debt as quickly as possible (and reduce your interest costs by paying no interest during the promotional period).
Take out an insurance policy
It’s essential that you take out travel insurance prior to heading overseas to ensure you’re covered in the event that something goes wrong. But if you’re heading overseas for a new job, first check with your employer to see if insurance is included in your employment contract.
Otherwise, you’ll need to compare policies to find one that suits your needs. There are many different types of policies available, such as insurance from an international provider, one-way cover or long-term cover.
Get to know your debt and tax obligations
Before you leave, notify the government of your plans to move overseas so that you can remain on top of your debts and tax obligations. If you remain an Australian resident, you’ll need to lodge an Australian tax return and declare your worldwide income even if tax is only deducted in your new country of residence.
In Australia, if you have a student debt such as a Higher Education Loan Programme (HELP) debt, from July 2017 onwards, you’ll still be required to make compulsory repayments towards your loan even if you’re overseas. Changes to the HELP repayment obligations, effective 1 July 2017, mean you’ll need to update your details on the myGov website if you intend to live overseas for more than 12 months.
If you’re unsure about your tax responsibilities while overseas, speak to a qualified tax accountant.
Read up on your voting responsibilities
While the process varies depending on which state/territory you live in, you need to decide whether you want to continue voting in elections while you’re living overseas. If you decide that you don’t want to vote in any elections, you can nominate to remove yourself from the electoral roll for the time that you’re living abroad.
However, if you want to remain in the electoral roll (and if you want to avoid paying a penalty for not voting), you’ll need to contact the local government to see what you’re options are. For instance, you may be required to be registered as an overseas elector with the Australian Electoral Commission (AEC) and you’ll need to have a permanent postal address in your new country if you want to vote via post.
Relocating overseas requires a bit of life admin to ensure that you’re up to speed with your financial obligations, but the effort is certainly worth the reward.