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Whether you’re working overseas or planning your return, here’s what every Australian expatriate needs to know.
Australians are some of the most mobile professionals in the world. Whether you’re chasing opportunity in London, Singapore, Abu Dhabi, New York or elsewhere, a stint overseas can be an incredibly rewarding experience professionally, personally and financially.
But there’s a catch.
Too often, expats overlook the complexity of their financial affairs across borders. The result? Costly tax surprises, lost benefits, or even legal headaches that can undo years of hard work.
If you’re already abroad or considering making the move, here are six key areas every Australian expat should be across. And remember – this is a highly complex area, so consider this list a starting point, not an exhaustive list.
1. Understand your tax residency status
Your tax residency is the cornerstone of your financial life as an expat. It determines how you’re taxed in Australia, and the rules aren’t as clear-cut as many assume.
You might think that living and working overseas automatically makes you a “non-resident” for tax purposes. Not so. The Australian Taxation Office (ATO) looks at a range of factors: whether you maintain a home in Australia, your family’s location, your ties back to Australia, and even how often you return.
| Tip: Never assume your residency status and get professional advice. Getting this wrong can mean paying more tax than necessary. |
2. Watch out for capital gains tax (CGT) traps
Property is often the biggest asset expats hold, and it’s also where many get caught out. Selling your former family home while you’re a non-resident can mean you lose access to the main residence exemption. That exemption could be worth hundreds of thousands of dollars in avoided tax.
Timing is everything. The point at which you cease residency, sell an asset, or move back can all dramatically change your CGT position.
| Tip: Don’t sell property while overseas without advice. Consider carefully whether to sell before you leave, while you’re abroad, or after you return. |
3. Invest smart for your tax status
Not all investments are created equal when you’re an expat. Some assets that work well for Australian tax residents (like Australian shares or property) may be far less efficient when you’re living overseas. Likewise, investing in certain offshore structures could leave you with unfavourable tax consequences once you return.
Your investment strategy needs to reflect:
– Your current tax residency
– Where your income is sourced
– Your long-term intentions (stay abroad vs return home)
| Tip: Tailor your investments to your unique situation rather than defaulting to what “worked” back home. |
4. Know the rules on foreign super and pensions
If you’ve worked in the UK, US, or elsewhere, chances are you’ve built up retirement savings overseas. Transferring those funds back to Australia is possible but the rules are complex and mistakes can be costly.
| Tip: Don’t touch foreign pensions until you’ve spoken with an adviser experienced in both jurisdictions. The wrong move could trigger an avoidable tax bill that wipes out years of growth. |
5. Manage currency risk and transfer costs
When your income, savings or investments are denominated in foreign currencies, exchange rate swings can make or break your financial progress. A sudden fall in the Aussie dollar can boost your offshore savings but the opposite can erode your hard-earned wealth.
On top of this, transfer fees and poor exchange rates from traditional banks can quietly eat away at large balances.
| Tip: Explore multi-currency accounts or reputable FX platforms that offer lower fees and competitive rates. Even small improvements in rates add up significantly over time. |
6. Have a plan for repatriation
At some stage, most expats return home. But moving back to Australia comes with its own challenges: reinstating Medicare, re-establishing superannuation contributions, buying property, and ensuring offshore assets are structured properly.
Leaving this planning to the last minute often leads to rushed decisions and unnecessary costs.
| Tip: Start preparing at least 6–12 months before your intended return. The smoother your financial transition, the easier your emotional transition will be too. |
BONUS TIP: Embrace it and enjoy your time abroad!
For many, living and working overseas isn’t just a financial challenge, it’s also a once in a lifetime opportunity. Yes, you need to stay on top of all the financial ‘stuff’, but don’t let money worries overshadow the experience.
Travelling, building new friendships, immersing yourself in different cultures and exploring parts of the world you may never live in again are just as important. The right planning should give you the freedom and confidence to enjoy the journey.
And, if you’re an expat with family back home, consider their needs – money is not everything.
Speak to an expert
Generalist advice often falls short when it comes to the complexities of tax residency, global investments, and cross-border pensions. Speak to an expert who specialises in this area, and if you aren’t sure, speak to a few different advisers to get a feel for their expertise, or even ask to speak with some of their expat clients!
With foresight and the right specialist advice, you can:
– Stay compliant with both Australian and overseas tax laws
– Protect and grow your wealth across borders
– Avoid unnecessary costs, surprises and stress
Whether you’re abroad temporarily, long-term, or planning your return, make sure you’re proactive.
Meet Nick at Strategic Wealth or Find a Planner near you!
The Money & Life website is operated by the Financial Advice Association (FAAA). The views expressed in this article are those of the author and not those of the FAAA. The FAAA does not endorse or otherwise assume responsibility for any financial product advice which may be contained in the article. Nor does it endorse or assume responsibility for the information.
