Foreign Perspectives

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Although most people give this little thought, it’s potentially going to have a major impact on your life in Australia, depending on how close you are to retirement and what arrangements you have put in place ahead of that move.

Final salary pensions (technically called defined benefit pensions) are going to stay in the UK, because they can’t be moved. In some cases, you can have your company pay the pension directly into an Australian bank account, but check the charges before you do that: some may make the payment via Swift which could cost you £25 or more each month in charges, plus charges to exchange the pounds to Australian dollars. Much better it to have it paid into a UK bank account and do the transferring to Australia yourself e.g. if you have an HSBC UK account, you can transfer this instantly for almost no charges to an HSBC Australia account. Final salary pensions will almost always get the increases that you’d have received if you still lived in the UK.

The UK State Pension can’t be moved to Australia but they can pay it directly into an Australian bank account. As above, I’d be more inclined to get it into a UK bank account and do the transfer myself as you know what the charges are going to be. This pension will not increase after you move to Australia so no more triple lock or indeed any increase at all. Worth noting is that Reform are talking about eliminating state benefits for immigrants and they appear to include the state pension in that, therefore it would be prudent to get any non-UK nationals moving with you British citizenship before you move, which currently costs about £1600, but given that it could lock in the entitlement to a UK state pension of £10,000/year or more that seems like a good investment.

Defined contribution pensions, private pensions, SIPPs, and similar pensions generally can be moved to Australia. However, there are limitations applied by both HMRC and their Australian counterpart. HMRC requires any pension to move to a QROPS compliant pension scheme which means in practice for Australia a Self Managed Superannuation Fund (SMSF). This is similar to the UK SIPP scheme but with a lot more administrative overheads and therefore a lot more cost: typically the setup and annual fees run to around A$2000 or so. You can’t use an off the shelf SMSF due to the HMRC regulations, notably that no member of the scheme can be less than 55 (so you can’t transfer the pension until you are at least 55) and you will need to have the SMSF administrator create a scheme meeting those regulations. The other big limitation is that you can’t transfer more than A$120000 (about £60000) per year and can only do this up to age 75, which may mean that your SIPP can’t be transferred in one go and it may not be possible to transfer a larger SIPP in full even over a number of years e.g. a £600000 SIPP would likely take more than 15 years to transfer (not 10 because it will, one hopes, grow in value as time goes on). One way to accelerate the transfer is to transfer, say, £60000/year into your SMSF and simply withdraw another £60000/year, taking the Australian income tax hit on that second £60000, and just put it into an Australian investment account.

Australian state pension is means tested in two ways. The income test means that you get the maximum pension if you’re single and have less than A$109/week (£50), A$170/week (£75) for a couple and is reduced by 50c/25c for each dollar above those amounts, reaching zero when you’ve more than A$1287 (£643) single, A$1967 (£983 for a couple. Given that the UK state pension is currently £230/week, you’re not going to get the maximum Australian pension under the income test. They also have an asset test, so a single homeowner can have up to A$321500 (£160750), A$481500 (£240750) for a couple to get the maximum, reducing to zero when you reach A$714500 (£357250) or A$1074500 (£537250). The asset limits include everything except the home you’re living in, so notably it includes pension schemes of all types. Last, but not least, you need to have been an Australian resident for at least ten years, unless you’re Australian (in which case, you could pop your claim in as soon as you’ve arrived). Unfortunately, the UK no longer has a social security agreement with Australia (it did up to March 2001) so no exemptions from the ten year limit.

ISAs aren’t transferable and there doesn’t seem to be any Australian equivalent unfortunately. You can retain your ISAs but since Australia doesn’t recognise ISAs, they will be taxable; you can’t add any more money to them once you leave the UK. Australian tax law means that capital gains are taxed differently depending on how long you have held the asset, so it may be simpler to move the holdings from your ISA to a dealing account in Australia when you move. T212 operates in Australia in much the same way as it does in the UK, aside from the lack of an ISA and you seem to be able to transfer from a T212 UK account to an Australian one; it seems to be a lot cheaper than local Australian brokers.

And that’s it for pensions. You will need to get an adviser to set up an SMSF for you and the main banks have partnerships with companies that can do that (National Australian Bank seems the best offering).

Copyright © 2004-2014 by Foreign Perspectives. All rights reserved.

This started out reasonably easy but the family have been adding requirements as the months have gone by, some directly from our experiences on our scouting trip a few months ago and some as we’ve collectively looked at properties online and thought some more about what we each need.

The basic requirement are for a house with three or more bedrooms, a few hectares of land, and costing up to A$1,000,000 (about £500,000). Prices will have changed by the time we’re actually moving, but we’re currently using that as a ball-park in our searches.

Location is always important and we’ve two slightly conflicting requirements with this because Wendy and I will essentially be retiring but the boys will be wanting jobs. Therefore it can’t be too far away from employment centres and in that respect we’re thinking of at most 30 minutes drive from either Launceston or Hobart. We all prefer Launceston but most properties in the recent searches are near Hobart.

As in our move to France, we’ll likely turn up with a massive load of stuff in boxes and therefore we want somewhere that we can store it all. That seems not to be an issue as almost all of the properties turning up in our searches come with assorted store rooms and even buildings.

Although three bedrooms is our minimum requirement, many of the properties that we’ve looked at come with four and a couple of bathrooms which is handy as that second bathroom was added as a requirement to avoid the morning rush.

Heating-wise, the houses generally come with “reverse-cycle airconditioning” (heat pumps) and many with log stoves. In a number of instances, the logs would be supplied by chopping down trees on the property itself. Quite a lot of the houses come with solar panels and in some cases enough to run everything, at least during the day (batteries are prohibitively expensive).

Recently, it has come to our attention that internet access isn’t a given in Australia so we’re specifically looking for that now (it’s called NBN there and comes in the usual cable, fibre, and satellite versions). On a related note, it turns out that TV also isn’t a given and some places that are well within our 30 minute range don’t have much, if any, TV reception (you can check this out at Digitalready). This isn’t a showstopper as there’s a subsidised satellite service (VAST) available in those areas, but something to consider. Incidentally, our French approach of just bringing the Sky box along won’t work as the Sky satellite doesn’t point anywhere near Australia so no FreeSat either. Other things that won’t work either are the various UK terrestrial channels via internet as they are region locked to the UK, although a VPN might get around that. On the TV front, we found that Australian terrestrial TV is almost entirely dire and has the feel of just a whole lot of shopping channels (even Wendy agrees with the dire verdict and she’s Australian!).

I’d also like a study/library which doesn’t seem to be an issue as most of the properties we’ve looked at come with a whole range of rooms outside the usual bedroom, living, kitchen, and bathroom categories.

Sounds daft, but in addition to the normal kitchen, it’s been suggested that a kind of ensuite kitchen for the various non-standard kitchen items would be handy (for the air fryer, popcorn machine, blender, etc.). That said, most of the kitchens are much larger than what we’re used to so this isn’t likely to be an issue. Junior #2 suggested a walk-in pantry as we’d be living “in the wilds” which sounds handy and we’d one in France, but we’re probably not going to be living “in the wilds” as such.

There’s also been some requests for things like space for chickens, vegetable garden, and similar but since we’re looking for a minimum of two hectares (four acres in old money), that doesn’t look like it’ll be an issue.

The water supply isn’t something we’d initially given much thought to. Turns out that most of the properties we’ve looked at are on town water. A little further out is tank water which means you’ve a big tank that the local authority fills up for you now and again for a fee. If you’re on tank water, I imagine that you’re also on a sceptic tank which they can pump out too, though you shouldn’t need them to do that if you’ve sized it properly.

We’ve been getting grocery deliveries for a few years now and that service is available from, mainly, Coles and Woolworths in Australia so long as you’re within their service distance (about 20/30 minutes drive from the nearest store). You can check out availability for that by popping in the postcode of the property that you’re looking at. Again, not a show stopper, but nice to know if it’s available before you move.

And that lot is after just a few months of taking the move seriously! I’m sure there’ll be more requirements arising over the time running up to 2027.

Copyright © 2004-2014 by Foreign Perspectives. All rights reserved.

OK, so we’re intending to move to Australia, but where?

Location is something that we’ve thought about a fair bit. As in our move to France, we want somewhere that has a “bumpy” landscape. Bumpy doesn’t mean mountainous, but rather not boringly flat i.e. some hills, but probably not actual mountains or at least not mountains that we need to cross regularly.

We also want it to be not too far from water which could mean near a river, lake, or even the sea. One key think that we found in France is that if you’re more than about a 90 minute drive from the sea then you have a continental climate which, in France, meant very hot summers and very cold winters, whereas within that 90 minute range the weather was quite reasonable all year. Although Australian climates can be quite different, Tasmania is fairly similar to France so that 90 minute or so distance will similarly change the climate: it snows in Tasmania, but mostly in places more than 90 minutes from the sea.

Together, the above still leave Launceston and Hobart in the frame as they’re both in reasonably bumpy landscapes and less than 90 minutes from the sea.

Copyright © 2004-2014 by Foreign Perspectives. All rights reserved.

We’ve been investigating how our banking, investments, savings, pension, and mortgage will work when we move to Australia as we can explore that now rather than wait until everything is happening at once.

Banking turns out to be relatively simple. Many people will use Wise initially which, although not an actual bank, will give you local account numbers in both the UK and Australia. Although both will work for the usual direct debits, payments, and debit card transactions, the Australian one has some limitations, specifically it can’t be used to receive social security payments. However, much better is the HSBC Australia Everyday Global account which is a proper Australian bank account and is the only Australian bank that let’s you fully open an account from abroad (tell them that you’re using it for saving, NOT that you’re going to be moving there); the debit card arrives in a couple of weeks. Although you don’t have to have an HSBC UK Advance account, if you do, you can do instant transfers from it to your HSBC Australia account. The other plus point of this is that HSBC UK will let you keep that account when you’re living in Australia. Transfers in the reverse direction take a day or two unless you have HSBC Premier. You need to use the HSBC Australia account every month or two so that it doesn’t go dormant.

Savings are more tricky as many banks and building societies will require you to close your accounts when you move abroad. Notable exceptions to this are the Nationwide, HSBC, Lloyds, and RBS/NatWest. If your cash ISA is with one of these, you could keep it but a) can’t add more to it and b) the interest will be taxable in Australia as they don’t recognise ISAs. The same mostly applies to investment ISAs and investments generally.

Banking in Australia is a bit different. When you move, you’ll find that many of the UK banks and building societies will close your account so you want to have one or more of the above opened before you move, as you’ll not be able to open them afterwards. As you’ll notice, those I’ve mentioned above are legacy banks and in practice most (all?) of the fintech banks (Kroo, Monzo, Starling) will close your account. If you fancy a fintech in Australia, there’s UBank and Up, but you can’t open those until you are an Australian resident.

Pensions are rather more complex. Due to HMRC requirements, if you are going to transfer your pension then it can only be to an Australian SMSF which is QROPS compliant which in turn means that you’re looking at setup fees of around £2000 and similar annual fees after that. The maximum that you can transfer in this way is A$120000 (£60000) per year (potentially triple that in your first year). Alternatively you could just access your UK pension from Australia and simply declare the withdrawals in Australia (they’ll generally be subject to Australian income tax as if you tell HMRC that you’ve left, they won’t apply UK tax). Given that my UK SIPP costs all of £120/year, my current thinking is that I will just leave it in the UK and make withdrawals as I’d have done if I’d still been in the UK. One thing to note is that you don’t need an international pension and any place that seems to offer one is likely a scam. That said, some normal SIPPs come in a rebadged international version so, my one with AJ Bell does, but it’s just the same with a different name on the tin. You can only transfer defined contribution schemes, not final salary ones nor your UK state pension. If you tell the state pension people, they can pay your pension to an Australian bank account in Australian dollars, or you can get it paid into a UK bank account. As I say, this is a complex area and you’re going to need advice on this.

Credit cards are something that you may want in Australia, however you won’t have a credit history when you turn up obviously and therefore will likely get rejected when applying. Two ways around this are to open an American Express card in the UK before you leave and use their Global Transfer service (basically you apply for a card in Australia and in the application check the box that says existing customer and you should be in business. Their Australian cards mainly come with a fee and to my mind, the best currently is The American Express^® Platinum Edge Credit Card which is A$195/year after the first year but comes with enough supermarket discounts to, for me, cover the cost. If you don’t want a fee, there’s The Qantas American Express Discovery Card and The Low Rate Credit Card. Worth noting is that Amex acceptance seems much lower in Australia than it is in the UK. The other way around no credit history is to apply for an HSBC Australia credit card as they will check your UK credit history; their Premier card is free and their low rate card is A$99/year.

So what about a mortgage? If you’ve a mortgage on your UK home, you’ll likely have to pay that off before you go, or essentially change it into a buy to let mortgage (the interest rate will usually be about 1% higher). You seem to be able to keep a buy to let mortgage going although it’ll be a bit more complicated when you come to renewing any fixed offer that you may have and your choice of banks offering it will likely be more restricted. What about an Australia mortgage? Still to be researched more fully, but they look much the same as UK mortgages, albeit with fewer options and, of course, there’s the business of proving your income in Australia.

Copyright © 2004-2014 by Foreign Perspectives. All rights reserved.

The first thing to note is that Australia is big, really big. Not only is there different geography including the usual city, coastal, countryside, and mountains but there’s entirely different climates to consider too. So, for example, if you’re looking up north around Darwin you can have monsoons, around Alice Springs you’ve got major heat in the summer, and in Tasmania you’ve basically got a normal (for UK people) climate. Hence, we’re concentrating our search in Tasmania.

In addition to a temperate climate, Tasmania has a whole lot fewer people: the population density is around 1/20th of what I’m used to locally. That different population density obviously affects the traffic density too which is obvious to me now but confused me initially. One consequence of that lower traffic density is that you can expand the radius that you’re considering for a property. In my initial searches, I used distance as the decider but it turns out that you can drive a whole lot further in twenty minutes in Tasmania than you can in twenty minutes in Belfast.

Unless you’re planning on living in the wilds (of which there’s a lot in Tasmania), there’s essentially two major population centres: Launceston and Hobart. Hobart is the capital and we found that there’s a lot more traffic there than there is in Launceston, as you’d expect from the larger population (about 200,000 vs 80,000). This is also reflected in the house prices: something that would sell for around A$700,000 in Launceston is more like A$1,000,000 in Hobart. That said, if you drive just ten minutes further out of the centre, an equivalent Hobart property is down to A$800,000 or so: it surprised me no end how much the prices changed if you added an extra ten minutes distance.

So, what are we looking for? Well, we have two slightly conflicting objectives in that Wendy and I will be retiring, whereas the boys will be looking for work, which means that we can’t be too far from their employment, hence our searches are looking for somewhere within about 30 minutes drive of either Launceston or Hobart. We’d also like somewhere with “a bit” of land so, notionally, minimum of a couple of acres, but not loads of acres, although we’ve found that isn’t as cut and dried as it first appeared as, for example, 100 acres of forest is probably easier to look after than 2 acres of landscaped garden. We’re not moving for about two to three years, so the prices will obviously have changed over that time but we’re using as a rough guideline A$800,000 as our maximum. Interestingly, when we were looking up to April, we seemed to need that A$800,000 but looking in July we found a number of suitable properties around A$600,000. Other than that, we’re just looking for three bedrooms minimum but even that’s not so clear-cut as you’d expect as Australian homes come with the usual bedrooms, kitchens, bathrooms, living rooms that you’d expect but also things labelled “study” (which could equally be a bedroom), rumpus rooms, entertainment rooms, workshops, storerooms, and a whole host of other categories, many of which I’ve never heard of.

They have open viewings in Australia so we were able to visit several properties whilst we were there (you can search for these via https://www.realestate.com.au/buy/inspection-times-1; they appear up to a week or so ahead). One thing that was clear right away was that the estate agent descriptions were very accurate, but equally clear was that we also needed to know more about the surrounding area of the property that we’d be buying. To partially get around that, you can use satellite view and street view on google maps, which we were doing, but it’s a lot clearer when you’re driving up to the property and having a look around. For example, one property we went to see was just hemmed in between two others and the back garden was pretty much a sheer drop, neither of which were obvious from our online investigations. Equally though, another property has what’s essentially a small national forest in its back garden which was beautiful but not at all obvious from the estate agent description or photos: in fact that property was one we’d buy if this were two years from now, yet, ironically not one that we’d have looked at buying.

What we’ve been mainly using to do our searches is https://www.realestate.com.au (that link takes you directly to one of our searches). There’s also https://www.domain.com.au/ but we found that the facilities on it weren’t so good. The RealEstate site lets you add filters, the key ones for us being the number of bedrooms, maximum price, and minimum land. You’re best to look for one less bedroom than you think you need as it will include houses with other types of rooms that you could just as easily use as a bedroom, so we actually would like four but search for three. House type is “interesting” as it’s, of course, Australian style so you’ve the usual house, townhouse, villa, retirement living, and apartment, but also acreage, rural and land which can all include houses on them. There’s also a map search option which we’ve found to be very useful as you don’t need to know what postcode areas you want your property to be in. Once we’d done a bunch of searches, we noticed that one particular estate agent seemed to turn up in a fair number of them: Neil Hawkins and, funnily enough, he was at one of the properties that we went to visit too! I suspect that’s a common occurrence in that a particular estate agent will likely specialise in the properties that you like yourself. I’m not 100% sure that we’ll end up buying our property via Neil, but I wouldn’t be surprised if we ended up doing that.

We thought at the outset that a scouting trip was essential, and it did indeed prove to be very useful. Whilst most people doing that kind of thing stay in a hotel and then just scoot around the areas that they’re interested in, we chose a self-catering property in an area that we’d previously been looking at for properties. That gave us the opportunity to get a feel for what it might be like living there and the boys pointed out later that it felt like we were living there. For Tasmania, that was Cherry Top Farmstay which is on the edge of Lilydale. It turns out that Lilydale did indeed feel like the kind of village which we’d want to be close to (we don’t want to be in a village though) as it has all the services you need i.e. decent supermarket, post office, medical centre, a small group of takeaways, coffee shops, a tavern, a petrol station, a school, and even a swimming pool. We were there for almost two weeks and were able to cover just about all the things we were aiming to do so we checked out how to sign up for Medicare, change the driving licence over, and saw round a number of other areas that we’d been considering. That said, there were a bunch of things that we couldn’t fit into the time available and we’d have needed at least another week. We’d also have liked more time to explore round Hobart as the two days didn’t really cut it, although it did highlight some negatives (the traffic) and positives (Cygnet). Our trip also had the advantage of highlighting some things that we particularly liked such as the small village feel of Lilydale and put us off Sidmouth a bit as it doesn’t seem to have that, although on paper it seems to.

As I say, we’re aiming to move around 2027 or so but we’re going to continue to look now and again as we build our evidence for my visa application that, all being well, we’ll be submitting late 2026.

Copyright © 2004-2014 by Foreign Perspectives. All rights reserved.