Emigrating and wondering best way to make most of savings

Truantgirl

Hi all. Hope I'm posting this in the right area...

I'm due to emigrate to Australia later this year and am trying to work out the best way to move money in order to avoid the taxman AND reduce the pain that the poor exchange rate is going to cause.

We'll be selling our house so we'll have a small chunk of money. Fortunately we've got family to stay with initially and will have jobs lined up so there is an option of keeping savings here for 6 - 12 months before transferring them.

Has anyone got any recommendations on how to approach it? Should we leave savings here (in accounts with decent interest rates and/or ISAs),do we move it in smaller quantities or just transfer the whole lot right at the beginning and swallow the fairly average exchange rate rather than try to second guess the market?

And if we do transfer it - can anyone recommend a reputable agency to manage it?

Thanks!!

DavidHayton

I do not think that it is possible to second guess exchange rate movements. The current AUD/GBP rate will take into account all current knowledge. It may go up ... or down. There are three options:
(1) transfer all the money in one lump as soon as you have sold the house.
(2) arrange for it to be sent in tranches on fixed dates in the future (e.g., £x on the first of every month for the next y months)
(3) wait and see and hope to "press the button" and send the money when the rate is optimal.

My preferred option would be (2) - it avoids the eggs and single basket problem. However if this is too much hassle, I would go for (1). I wouldn't want to go for (3). It would turn me into a nervous wreck.

Your bank would be more than happy to transfer money overseas for you but banks have a reputation for being expensive (fees + commissions + poor exchange rate). There are a number of specialist brokers who are better value. I have used both CaxtonFX and Hargreaves Lansdown to transfer money to a foreign bank account. Both did exactly what they said they would do.

Best wishes
David

theoretica

I think ISAs are only for people resident in the UK. I don't know about offshore banking (or how the Australian tax system works!), but wonder if that would be an option?

DavidHayton

Non-residents can leave money in an ISA (though they can't add new money). However, it would not be tax efficient since the interest would need to be declared for tax in Australia.

Almost certainly best to take all your money with you to Australia. There is a double taxation treaty between the UK and Oz, but living in one country and saving in another effectively means that you would pay the higher of the two tax rates.

David

TomMK

Hi TG, good luck with the move! OH and I emigrated last year and we're loving it :T

You say you have jobs lined up, are you transferring with work (and potentially receiving a migration fund) or are they both new jobs?

Do you have permanent residency lined up or a shorter-term visa (i.e. sponsored 457 or working holiday?). I ask because it has tax implications and so might affect your decision to move your savings.

If you're funding this yourself through savings / sale of the house, I would guess you'd need the money over here as soon as you get here, but your post doesn't sound like that's essential?

Sorry for all the questions!! But really the decision to bring your money or not depends a lot on circumstances so need a bit more info before I can judge.

97trophy

DavidHayton wrote: »

(2) arrange for it to be sent in tranches on fixed dates in the future (e.g., £x on the first of every month for the next y months)

+1

An excellent solution.

Truantgirl

Thanks for the suggestions. I had been favouring the sending it in tranches option too as don't fancy putting life on hold waiting for exchange rates to improve so think I will check out a few brokers. I don't mind a little bit of hassle and I think I'll feel a bit better doing it this way than sending everything at the begining and then seeing a significant improvement in the exchange rate a couple of months later (which would be my luck...)

I've actually got dual citizenship (am Australian but have lived in UK for the past 7 years) so visas and work permits aren't a problem (I'm not sure if there are any additional tax implications with this as opposed to a straighforward emigration?)