Expats in Oz want to come home-can we afford it?

Marcon

How much would your proposed house cost you? I presume you've done the homework on house prices here in the UK, but after Australia anything is likely to feel pretty cramped and devoid of land.

Tassie_Devil

Marcon wrote: »

How much would your proposed house cost you? I presume you've done the homework on house prices here in the UK, but after Australia anything is likely to feel pretty cramped and devoid of land.

It would be fully funded by the sale of our present house. We aren't too bothered about the size of the block of land it's on provided there are no noisy neighbours! We've previously lived in terraced houses in Carlisle and Sheffield so we're used to the proximity of that.

happyandcontented

jamesd wrote: »

That's the single tier cap after which you stop accruing more from 6 April 2016.

Those who reached their state pension age before then are on the old system which was 1/30th of the basic state pension per year capped at 30 years plus uncapped earnings-related part on roughly up to the higher rate income tax point. You could contract out of almost all of the earnings-related part. The BSP gets triple lock, the rest CPI.

Everyone not yet at state pension age had their old rules and new rules amount calculated as of 6 April 2016 and the higher one used as their foundation amount. New accrual adds to that if they haven't reached the cap yet. Amounts over the cap are retained but increase with CPI instead of triple lock.

The maximum is what a lifelong high earner could accrue under old rules. On top of that much of the extra can be inherited by a spouse under old rules and old rules deferral adds 10.4% a year. Which means I wouldn't be surprised to see a few state pensions above £1,000 a week.

Deferring under new rules adds 5.8% per year not inheritable and tends to be a good move for those of normal life expectancy without ample guaranteed income.

My OH has just checked his figures on the Gov website and it is £190 pw. He is still working and will do so for another 2/3 years and will retire about 62. So are you saying that he will accrue more than the figure above? He had a period of being contracted out.

Malthusian

Tassie_Devil wrote: »

I think if we did, we'd want to make a clean break and leave nothing here-one option is to leave our superannuation funds here, leave an Aussie bank account open to pay our pensions into, and operate everything online, but something feels a bit off about having all your net worth on the other side of the world-however the advantage with this is that investment earnings within the super fund are free of tax once you retire, and income stream payments once you start to take a pension are also tax-free in Oz, but obviously taxable in the UK once we return.

Assuming your super funds are properly diversified, your net worth won't be on the other side of the world, it will be in 1s and 0s spread over the entire globe, as it is now.

If repatriating the money would incur any extra tax then personally I would want a much better reason to pay it than that.

grnglide

. So are you saying that he will accrue more than the figure above?

he will not accrue any more. What he has (nSP + Protected Payment) will be inflation protected. Currently the nSP amount will be increased by the triple lock and the Protected Payment will be increased by CPI.

jamesd

happyandcontented wrote: »

My OH has just checked his figures on the Gov website and it is £190 pw. He is still working and will do so for another 2/3 years and will retire about 62. So are you saying that he will accrue more than the figure above? He had a period of being contracted out.

He's already reached - and exceeded - the single tier cap so he can't accrue any more. He will get the triple lock increases on the cap amount and CPI above it now and after taking it.

To get above the single tier cap you had to do it before 6 April 2016. Aside from inheritance or deferral, which remain possibilities.

Tassie_Devil

Malthusian wrote: »

Assuming your super funds are properly diversified, your net worth won't be on the other side of the world, it will be in 1s and 0s spread over the entire globe, as it is now.

If repatriating the money would incur any extra tax then personally I would want a much better reason to pay it than that.

Having just run the numbers -at today's exchange rate- on giving ourselves a £40k annual income from A) drawing down from super and dividends from income ETFs after repatriating our capital, we're better off after tax by about £2500pa by repatriating.

PennyForThem_2

There is no inheritance tax in Australia but is here. Maybe something to factor into the equation depending on whether you want to pass your wealth on.

[Deleted User]

Don't forget to invest in a SIPP when you are here and get the free £720 for £2880 invested. (each!)

nigelbb

Tassie_Devil wrote: »

Having just run the numbers -at today's exchange rate- on giving ourselves a £40k annual income from A) drawing down from super and dividends from income ETFs after repatriating our capital, we're better off after tax by about £2500pa by repatriating.

I realise that at the end of the day it's an emotional decision rather than a financial one but how much will your move cost? It could mop up quite a few years of tax savings.

BTW Your UK state pension will be index-linked with the triple lock if you live in the UK whereas it will be frozen if you draw it in Oz.