Latest / The Money Puzzle / Moving money around the world - Your expat explainer

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Moving money around the world - Your expat explainer · The Money Puzzle

0:10
Speaker 1: Hello, and welcome to The Australian's Money Puzzled podcast.
0:13
Speaker 2: I'm James Kirkby. Welcome aboard everybody.
0:16
Speaker 1: Now you know, we have listeners scattered all around the
0:18
Speaker 1: world and we often get correspondence from Australians who are overseas,
0:23
Speaker 1: often planning to come back. I think sometimes perhaps in
0:26
Speaker 1: the near future, we also have people planning to go overseas,
0:30
Speaker 1: of course, and sometimes it's them, sometimes it's their sons
0:33
Speaker 1: or daughters who are sort of harboring this exciting idea.
0:38
Speaker 1: And I also feel, for what it's worth, a constant
0:40
Speaker 1: stream of queries on access to pensions overseas for those
0:45
Speaker 1: who are fortunate enough to find that they actually are
0:48
Speaker 1: due a pension in some other country because they work there.
0:51
Speaker 2: For a number of years.
0:52
Speaker 1: I worked in a couple of countries overseas and I
0:54
Speaker 1: checked out all my pensions and guess what, I didn't
0:56
Speaker 1: stay anywhere long enough to get any having worked.
1:00
Speaker 2: Like an expat. It's fascinating area.
1:03
Speaker 1: I haven't done it on the show before, but I
1:04
Speaker 1: have the perfect person once more to talk about this issue.
1:08
Speaker 1: It's Brett Evans. He's from Atlas Wealth Management and he's
1:12
Speaker 1: based in Dubai.
1:14
Speaker 3: How are you, Brett, Good morning, Good James, how are
1:16
Speaker 3: you very good?
1:17
Speaker 2: Thank you.
1:18
Speaker 1: It's interesting that I wanted to just introduce broadly to
1:22
Speaker 1: the listener some of the key issues, and I thought we.
1:25
Speaker 2: Would talk about. One of the things I wanted.
1:27
Speaker 1: To actually open with was where is hot if you
1:31
Speaker 1: like hotman be not the right word, but where is
1:34
Speaker 1: most popular? There was a time, obviously where Australians would
1:38
Speaker 1: naturally have gone. I worked in Hong Kong years ago.
1:40
Speaker 1: It was full of Australians, very easy to go there.
1:43
Speaker 1: Then I worked a little bit in London, which, of course,
1:45
Speaker 1: needless to say, absolutely loaded with Australians. But I believe
1:48
Speaker 1: that it's quite different now that Singapore, for instance, is
1:53
Speaker 1: outraged Hong Kong.
1:54
Speaker 2: It wouldn't surprise me.
1:55
Speaker 1: You can test me on that one. I do Bai
1:57
Speaker 1: and other parts of the world. Has it changed where people.
2:00
Speaker 4: Go always and it's either geopolitical change, which is what
2:05
Speaker 4: we've seen out of Hong Kong, you know, pre certainly
2:08
Speaker 4: the handout of ninety seven. Yeah, it was pretty hard
2:11
Speaker 4: not to bump into an Aussie. Even post handover, it
2:14
Speaker 4: was still an amazing place. Then we saw that geopolitical
2:17
Speaker 4: ructions with Yellow Umbrella Brigade and all that happened through
2:20
Speaker 4: COVID sort of took the shine off Hong Kong certainly
2:24
Speaker 4: put the shine back on Singapore. But that as a
2:26
Speaker 4: result of Singapore certainly became very popular, became very expensive
2:30
Speaker 4: and quite often it priced out a lot of expats.
2:34
Speaker 4: And they also had the localization rules where you couldn't
2:37
Speaker 4: just hire an expat, you had to try and hire
2:39
Speaker 4: a singapore in first, and then if you couldn't hire
2:42
Speaker 4: Singapore and then you hire an expats, so it became
2:43
Speaker 4: a bit more difficult. So but look, Hong Kong, Singapore
2:47
Speaker 4: is still popular. Certainly London has always been a rite
2:50
Speaker 4: of passage, pulling pints in the pubs and so forth.
2:52
Speaker 4: But we have seen a lot of changes in the
2:54
Speaker 4: last twelve months with respect to the non non laws.
2:57
Speaker 4: So what that essentially meant was until previously you could
3:01
Speaker 4: hold assets outside of the country, that would taxi on
3:04
Speaker 4: the assets inside of the country and off you go.
3:07
Speaker 4: But now they've changed those laws so that once you
3:10
Speaker 4: cross a four year threshold, then your worldwide assets become
3:14
Speaker 4: accessible from a tax point of view.
3:16
Speaker 3: So it's taken a bit of that.
3:17
Speaker 1: Is the rules are probably designed for Russian oligarchs rather
3:20
Speaker 1: than Jack and Jill from Sydney and Melbourne. But so
3:23
Speaker 1: very broadly, what are the newer regions if you like,
3:28
Speaker 1: where the ex parts are going.
3:31
Speaker 2: To me?
3:31
Speaker 4: The two most popular ones have been Middle East of
3:33
Speaker 4: the United States United States for two separate reasons. The
3:36
Speaker 4: United States is all about the opportunity to size the
3:38
Speaker 4: market the sector you work in, specially if it's tech,
3:41
Speaker 4: any word AI, those sort of things.
3:44
Speaker 3: It's it's it's like moths to a flame.
3:47
Speaker 4: The Middleist has been very popular for two reasons, and
3:50
Speaker 4: especially post COVID, we saw the way that the region
3:54
Speaker 4: handled that and came out of it very strong. Obviously,
3:57
Speaker 4: the lower no tax environment is very appealing. As of
4:01
Speaker 4: the twenty eighth of February, it hasn't really softened.
4:04
Speaker 3: It's just been put on pause. I guess you could say.
4:06
Speaker 4: So we're still talking to a lot of folks who
4:08
Speaker 4: are coming into the Middle East where there's Dubai and
4:10
Speaker 4: the Dhabi kata read that's still popular, but people are
4:15
Speaker 4: just seeing how this, you know, sort of this Middle
4:17
Speaker 4: East conflict goes out and whether it settles down.
4:21
Speaker 1: Was it something that you ever considered prior to the
4:25
Speaker 1: around crisis, that the area which clearly was thriving for
4:30
Speaker 1: so long. And I've been to a lot of the
4:32
Speaker 1: Emirates and I've seen it in action. But did it
4:37
Speaker 1: surprise you what happened?
4:39
Speaker 2: And more likely did it?
4:42
Speaker 1: Do you think it has disturbed the attractions of the
4:46
Speaker 1: Middle East in any way?
4:49
Speaker 3: Surprised everyone? You know, Expats, amoralities alike.
4:52
Speaker 4: We're all shot, you know, when we have twice the
4:55
Speaker 4: amount of missiles and drones compared to say Israel, You've
4:59
Speaker 4: got to ask that question. So I think there's something
5:01
Speaker 4: deeper behind there, based on a jurisdictional issue there that
5:05
Speaker 4: I'm probably a bit too lower pay grade to understand.
5:08
Speaker 1: You're flying in and out of Dubai all the time
5:10
Speaker 1: right now, Yeah.
5:11
Speaker 3: Yeah, that's right. Yeah, I mean Zerich right now presenting
5:13
Speaker 3: to Australia.
5:14
Speaker 2: How the plans half empty? No?
5:17
Speaker 4: Now, I flew up to Geneva early this week and
5:19
Speaker 4: the plane was full.
5:20
Speaker 3: Business is getting back on with it.
5:21
Speaker 4: We had in a brief period of alerts, but that
5:24
Speaker 4: sort of died down.
5:25
Speaker 3: Now.
5:25
Speaker 4: It's funny how they've changed the process so actually they've
5:29
Speaker 4: embedded now these types of events into their systems, so
5:33
Speaker 4: they don't just suddenly stop and go put their hands
5:35
Speaker 4: in their ears and say well stop. They understand very
5:38
Speaker 4: important to keep going. So where I've talked to someone
5:41
Speaker 4: two weeks ago who is arriving next week into Thebai
5:44
Speaker 4: for an new job.
5:45
Speaker 3: So the appeals there maybe not as big as it was.
5:48
Speaker 4: Say in January February, but I think that'll kick up
5:50
Speaker 4: again because we do see a lot of people mean
5:53
Speaker 4: in the Middle East for opportunity, but also we call
5:55
Speaker 4: them economic refugees coming out of Australia who are trying
5:58
Speaker 4: to get ahead, and with the changes and text laws,
6:01
Speaker 4: we may see more of that coming out as well.
6:03
Speaker 2: SOO okay, very interesting.
6:05
Speaker 1: Now tell me when we let's start with people who
6:08
Speaker 1: are thinking of going overseas, never been overseas before. As
6:14
Speaker 1: I said, I did it myself. I emigrated to Australia,
6:17
Speaker 1: but I did briefly live as an expat in Hong
6:21
Speaker 1: Kong and I knew nothing whatsoever, just fluent got a
6:25
Speaker 1: job in advance, which was great, fluent stat and hotel
6:27
Speaker 1: it for a couple of weeks and then bang reality bites.
6:30
Speaker 2: Everything's difficult.
6:31
Speaker 1: Everything, every single thing, you know, getting a television, getting
6:34
Speaker 1: your getting an apartment, to getting your card, and I
6:37
Speaker 1: didn't even have VEO to have to get put kids
6:39
Speaker 1: in schools or anything like that. But tell me, just
6:42
Speaker 1: in terms of the absolutely top order issues that someone
6:45
Speaker 1: should think of in terms of financial life, what should
6:49
Speaker 1: they think of if they are about to make the jump?
6:55
Speaker 3: How does it affect your existing finances?
6:57
Speaker 4: Number one, Yeah, it is almost say it's an arrogance,
7:00
Speaker 4: but a disbelief that when they go overseas everything stays
7:03
Speaker 4: the same, and it's not the case at all. You know,
7:06
Speaker 4: you study become when you are wanting to be a
7:09
Speaker 4: non resident tax purposes. In the ato's eyes, your assets
7:13
Speaker 4: in Australia change forever until you come back, so how
7:16
Speaker 4: you manage those assets are completely different to how you
7:18
Speaker 4: manage as assets pre that move. And probably one of
7:22
Speaker 4: the most punitive ones has been the main resident exemption.
7:25
Speaker 4: When that rule was changed on the first of July
7:27
Speaker 4: twenty twenty, you can sell a property that was formerly
7:30
Speaker 4: a PPR in Australia one week after moving overseas and
7:33
Speaker 4: you will pay capital gains tax all the way back
7:36
Speaker 4: to the data purchase.
7:37
Speaker 1: Just to explain that if you would. What you're saying is,
7:39
Speaker 1: let's say I owned a house, is my home, never
7:42
Speaker 1: paid CGT on it. I'm going to go to Dubai.
7:45
Speaker 1: I'm going to stay for I think two to five years.
7:48
Speaker 1: I have no idea what's the tax implications for me
7:50
Speaker 1: on my house? On my home?
7:53
Speaker 3: If you don't sell it, just rented out, you are fine.
7:57
Speaker 3: What will happen is.
7:59
Speaker 4: That proper is what we call taxable Australian property, so
8:03
Speaker 4: it becomes accessible while you're overseas still as a non resident.
8:07
Speaker 4: But we have this great law in Australia called the
8:09
Speaker 4: main resident exemption, the six year rule, that means that
8:11
Speaker 4: you can move out of your principal place of residence
8:14
Speaker 4: for up to six years, rented out, sell it in
8:16
Speaker 4: that period of time and you won't pay capital gains
8:19
Speaker 4: tax back. In twenty twenty we saw a change with
8:23
Speaker 4: the Morrison government. They remove the main brides exemption for
8:27
Speaker 4: non residents, which means that if you are a non
8:31
Speaker 4: resident for tax purposes and you sign a contract to
8:34
Speaker 4: sell your former principal place of residence in Australia, then
8:38
Speaker 4: you'll pay capital gains tax back to the data purchase.
8:41
Speaker 4: There's a couple of exclusions called live events that not
8:43
Speaker 4: many people qualify for.
8:45
Speaker 3: So generally the idea is is before you move, you.
8:48
Speaker 4: Need to work out whether you intend to sell that
8:50
Speaker 4: property while you're away.
8:51
Speaker 1: Okay, yes, terrific, there's the information strati worth having you
8:55
Speaker 1: on the show already just for that, Brett, Okay, very good.
8:58
Speaker 1: Now come out ask you saying very because I'm thinking
9:01
Speaker 1: back a personal experience. Very broadly, it seemed to me
9:05
Speaker 1: having done its and we were all expats as such
9:08
Speaker 1: that my social circle were largely expats in Hong Kong.
9:12
Speaker 1: That you either stayed for a short time like a
9:17
Speaker 1: year and a half, or you stayed for a long
9:20
Speaker 1: time five years, but the worst thing was to stay
9:23
Speaker 1: for two or three years. This was kind of like
9:26
Speaker 1: a common precept at the time. But what's your view?
9:30
Speaker 4: Look, I think there's the taxes view and then there's
9:33
Speaker 4: the personal view. To me, you haven't really put down
9:37
Speaker 4: your roots until two years in. That's when you're sort
9:40
Speaker 4: of settled in. You know where to buy you benji might,
9:42
Speaker 4: you know how to navigate the system, and you've got
9:44
Speaker 4: the bandwidth to enjoy where you live andning before that,
9:48
Speaker 4: it's crazy you know, you're trying to understand new systems
9:50
Speaker 4: and everything. You also have the added complication too that
9:53
Speaker 4: in the ato's eyes that if you do leave and
9:57
Speaker 4: come back then they view that as temporary. So therefore
10:00
Speaker 4: you haven't set tied with Australia and therefore depending on
10:04
Speaker 4: what country you go to, you might be double text.
10:06
Speaker 3: So that's a consideration as well too.
10:08
Speaker 4: So to me, we've seen a change pre COVID, everyone
10:12
Speaker 4: was in and out all the time. COVID changed everything
10:14
Speaker 4: for a lot of people, and now we're seeing people
10:17
Speaker 4: moving over and buying property and putting down roots, and
10:20
Speaker 4: that time frame instead of a two to four year average,
10:24
Speaker 4: now it's sort of sometimes a three to ten year
10:26
Speaker 4: average for a lot of itos.
10:27
Speaker 1: Okay, And would you say very broadly that it's much
10:32
Speaker 1: financially more rewarding to stay longer like the three to
10:37
Speaker 1: ten year old than the one to three year.
10:40
Speaker 3: Look, I think it is.
10:41
Speaker 4: I mean, in two years, the cost of moving your
10:44
Speaker 4: furniture flights, just the chaos that goes around both relocating
10:49
Speaker 4: to and fro. You need an ROI on that investment
10:54
Speaker 4: time and money to do it. So one hundred percent
10:56
Speaker 4: five to seven years I think is that sort of
10:58
Speaker 4: perfect sort of time frame for folks you don't want
11:00
Speaker 4: to go forever but want to really enjoy their time
11:03
Speaker 4: and have a chance to let their cash flows normalize.
11:07
Speaker 4: You know when it's like when you move overseas, you're
11:08
Speaker 4: buying everything from you, So after five years you own
11:13
Speaker 4: everything you need and your cash flows normalize, and then
11:16
Speaker 4: you can save and put money away and make the
11:19
Speaker 4: most of your time away.
11:20
Speaker 1: Another thing I wanted to ask you was just in
11:22
Speaker 1: terms of when you look at overseas, when you're thinking
11:25
Speaker 1: about moving overseas, it's something that takes a lot of
11:30
Speaker 1: deep thought, and a lot of people don't because it's ambition, right,
11:33
Speaker 1: They just move for the first time. What's your experience
11:36
Speaker 1: is most people move overseas because it was the first
11:38
Speaker 1: time they were offered the opportunity, or do most people
11:41
Speaker 1: actually rationally sit back and go I would make more
11:43
Speaker 1: money if I want to do buy. I'm a lawyer,
11:45
Speaker 1: I am an engineer. What's more common?
11:47
Speaker 4: I think ten years ago it was people seeking it
11:50
Speaker 4: out themselves, so they want to be adventured. They wanted
11:53
Speaker 4: the experience living overseas. Ten twenty thirty years ago, what
11:56
Speaker 4: we've seen in the last ten years has been obviously
11:59
Speaker 4: the digitization of the workforce. So now you could be
12:03
Speaker 4: sitting away just having your nine to five job in
12:05
Speaker 4: Australia and a recruiter reaches out from overseas to say, hey, James,
12:09
Speaker 4: we'd like to offer you this money to come and
12:11
Speaker 4: do this role in this country.
12:12
Speaker 3: Are you interested? So that's what's changed a lot.
12:15
Speaker 4: That opportunity is now coming to people as opposed to
12:17
Speaker 4: people seeking it.
12:18
Speaker 3: There's still is a lot.
12:19
Speaker 4: Of people seeking those opportunities, but I think you can
12:23
Speaker 4: sort of cut the XAT.
12:24
Speaker 3: Market into three areas.
12:26
Speaker 4: So you've got the economic refugees who are just doing
12:29
Speaker 4: it to try and get ahead, and they're trying to
12:31
Speaker 4: shoehorn what they do right now with what they want
12:34
Speaker 4: to do overseas. Second one is obviously those looking to
12:38
Speaker 4: seek adventure or maybe the role they're going for doesn't
12:41
Speaker 4: exist in Australia so they have to go out and
12:43
Speaker 4: find it. And the last one would be the reverse,
12:46
Speaker 4: people being actively recruited in Australia to move overseas.
12:50
Speaker 1: Just before we go to the BRIEC, I want to
12:51
Speaker 1: ask you another thing, which is again personal observation. Anecdotally,
12:57
Speaker 1: I think a lot of people get disappointed when they
12:58
Speaker 1: move overseas because the promise is so good. Okay, someone says,
13:03
Speaker 1: you're going to get a new job, very exciting, marvelous
13:05
Speaker 1: for your cv, great for your experience, and on top
13:08
Speaker 1: of that, you're going to be paid more than you
13:10
Speaker 1: are in Australia, pay less tax.
13:11
Speaker 2: All sounds great.
13:13
Speaker 1: But when you get to some of these locations, and
13:15
Speaker 1: I'd like to know your opinion about this, and to
13:18
Speaker 1: the extent that you could tell us the ones that
13:20
Speaker 1: are better than others, costs on the ground can be enormous.
13:24
Speaker 1: Do Bai where you live is really expensive has become
13:28
Speaker 1: I imagine if you went there in the nineteen seventies,
13:30
Speaker 1: it was very keen, but then you probably couldn't get
13:32
Speaker 1: a cup of coffee either or you couldn't certainly you
13:35
Speaker 1: couldn't get the comforts. But the problem is, because they
13:39
Speaker 1: have the comforts now, they're very expensive on the ground.
13:43
Speaker 1: And that's I'm talking about what people who don't bring
13:45
Speaker 1: your family with them. It would be even more so
13:48
Speaker 1: when they do. Tell me about that side of things
13:51
Speaker 1: and how people can deal with that.
13:55
Speaker 4: Look, four years ago, Dubai was a bit of an
13:58
Speaker 4: oasis and the utopia because the prices hadn't changed, but
14:03
Speaker 4: it was becoming popular more and more popular, and with
14:06
Speaker 4: that surge, I think a thousand people a day over
14:09
Speaker 4: the last twelve months have been moving to Dubai. So
14:11
Speaker 4: with that comes that inflation that builds everything up, so
14:15
Speaker 4: rent and school prices and everything came.
14:18
Speaker 3: Through to me.
14:20
Speaker 4: The popularity of Dubai also means that you're not going
14:23
Speaker 4: to get the big wages because there's ten people competing
14:26
Speaker 4: for the same role. They're not begging James to move
14:28
Speaker 4: to Dubai. You know, there's ten people who are happy
14:32
Speaker 4: to take James's spot for ten percent less. So sometimes
14:36
Speaker 4: the world needs a bit of a reset. And who knows,
14:38
Speaker 4: this regional conflict might be good for Dubai in terms
14:41
Speaker 4: of is coming things down, But what we see is
14:43
Speaker 4: those flows sort of go elsewhere. So if you're looking
14:47
Speaker 4: at Dubai, maybe you go, you know what I wanted Dubai.
14:50
Speaker 4: I ever say, read, but Read hasn't had the experience
14:54
Speaker 4: of what Dubai's had over the last couple of months,
14:56
Speaker 4: So maybe I'll try Read.
14:57
Speaker 3: So people will.
14:59
Speaker 4: Hunt around and if you're what I call it sort
15:02
Speaker 4: of a vanilla profession like an engineer and accountant, a lawyer.
15:06
Speaker 4: You have that luxury of being able to chop around
15:08
Speaker 4: those different jurisdictions. Some industries you can't do that. So
15:12
Speaker 4: to me, there has to be that reset, and I
15:14
Speaker 4: think we've seen that happen with Singapore as well as
15:17
Speaker 4: recently as well. That's starting to calm down as well too,
15:19
Speaker 4: because what happens is they price themselves out of the
15:22
Speaker 4: consumer's pocket and budget and then people just elect to leave.
15:26
Speaker 4: So then things start to settle down now, So it's
15:28
Speaker 4: sort of that self moderation. But as you say, you know,
15:32
Speaker 4: if you look at say scenarios of in Europe, for example,
15:36
Speaker 4: depending on where in France or depending on where in Switzerland,
15:39
Speaker 4: depending on which canton and Switzerland you are, you'll have
15:41
Speaker 4: a completely different experience and you do need to go
15:43
Speaker 4: to that next level to see Okay, yes, at a
15:46
Speaker 4: gross level and being paid this and my tax lates this,
15:49
Speaker 4: my net is this, Okay, how much does it cost
15:52
Speaker 4: to go to school?
15:52
Speaker 3: What's the groceres?
15:53
Speaker 4: Like? You have just a vast difference of different countries
15:57
Speaker 4: with different experiences.
15:58
Speaker 1: Okay, we'll have a bread and we'll be back in
16:00
Speaker 1: a moment and I'm going to talk and we're going
16:02
Speaker 1: to get deeper into this, which I think you'll find
16:04
Speaker 1: very interesting. Brett is an expert in the area and
16:06
Speaker 1: specialized in it very early in his career, and I
16:09
Speaker 1: think it's probably been very fruitful specialization. Back in a moment, Hello,
16:23
Speaker 1: Welcome back to The Australian's Money Puzzle podcast. James Kirby
16:26
Speaker 1: here talking to Brett Evans of Atlas Wealth Management, who
16:30
Speaker 1: is a specialist in expat financial advice. None of this,
16:33
Speaker 1: of course his advice. It's information only, as you know
16:36
Speaker 1: on the show. Okay, just to finish off on one thing, Brett,
16:40
Speaker 1: there's something we should have mentioned, which is in the
16:44
Speaker 1: questions in that first part of the show. I was assuming,
16:47
Speaker 1: of course that the whole family goes, right, or the
16:50
Speaker 1: couple go or whatever we are seeing where someone goes
16:55
Speaker 1: and the rest of the family stay in Australia. It's
16:58
Speaker 1: the one thing we should know about that you should
17:00
Speaker 1: tell us about that arrangement.
17:02
Speaker 4: Yeah, as more jurisdictions sort of become available to expats,
17:07
Speaker 4: they're not always family friendly. So sometimes the breadwinner will
17:12
Speaker 4: go and the partner and the kids will when you.
17:14
Speaker 1: Say that my family family, do you mean it's target
17:16
Speaker 1: for the other person to get a job? No?
17:19
Speaker 3: I think more so lost.
17:21
Speaker 4: You know, so Dubai is very family friendly, it's very appealing,
17:24
Speaker 4: but some people don't find that with Saudi for example.
17:27
Speaker 4: So either the family lives in South Dubai and they commute,
17:30
Speaker 4: or they stay back in Australia. And this is where
17:33
Speaker 4: things get complicated because under the very archaic and old
17:37
Speaker 4: nineteen thirty six tax fretancy laws, we look at the
17:40
Speaker 4: resides the domosol, the one eighty three and Commonwealth super tests.
17:44
Speaker 3: The domosol test is where there's the center of your universe.
17:47
Speaker 3: And if you're living in.
17:49
Speaker 4: Read or in Jeddo or Koba Daman and the wife
17:53
Speaker 4: and kids are back in Melbourne, Sydney, Brisbane, then the
17:57
Speaker 4: ATA will take a dim beyond that. They'll say, well, look,
18:00
Speaker 4: you're coming back all the time to visit the center
18:03
Speaker 4: of your universe is actually back in Australia.
18:05
Speaker 3: You're just working overseas, you're not living overseas.
18:08
Speaker 4: So the wild ways to combat and deal with that. Obviously,
18:13
Speaker 4: there are the proposed changes to the tax regiency laws
18:16
Speaker 4: which we're hoping comes through in the coming years, because
18:18
Speaker 4: that makes it a very binary decision whether you're an
18:20
Speaker 4: nextpat or not.
18:21
Speaker 3: At the moment, it's very theory or very behavior based.
18:23
Speaker 4: I've been to a lot of subjective nature, so certainly
18:26
Speaker 4: if you are envisaging going overseas in that scenario, you
18:29
Speaker 4: do need to seek advice to get a lot more
18:31
Speaker 4: clarity on how to maintain non residity status with that
18:35
Speaker 4: sort of split sort of family.
18:37
Speaker 1: Gosh, I never knew that. I must say that stinks.
18:40
Speaker 1: I mean, really, if you're doing it hard and you're
18:42
Speaker 1: up in some somewhere up in your bay yourself seventy
18:44
Speaker 1: five days a week, seven days a week, then I
18:46
Speaker 1: would have thought you were there for tax purposes.
18:49
Speaker 2: But hey, the istheal follows you to the end of
18:51
Speaker 2: the earth. Okay.
18:52
Speaker 1: The markets for the countries of the regions, for someone
18:56
Speaker 1: sitting in Australia today would be equivalent to Dubai in
19:01
Speaker 1: nineteen seventy five. By that, I mean, well, you could
19:04
Speaker 1: really make a lot of money and it doesn't cost
19:06
Speaker 1: a lot.
19:07
Speaker 3: On the ground, I don't think it exists anymore.
19:11
Speaker 4: Well, everyone knows about it, so there's places that you
19:15
Speaker 4: can make a lot of money. And from our client
19:17
Speaker 4: experience that that is the United States. If you're own tech,
19:20
Speaker 4: you know, the amount of people we meet who are
19:23
Speaker 4: young guys and girls twenties and their thirties walking around
19:26
Speaker 4: with fifty million dollars in their pocket is I wouldn't
19:29
Speaker 4: say common, but yeah, Anying and AI or Look, there's
19:36
Speaker 4: some of the roles we see that are c sweet,
19:38
Speaker 4: very high paying roles.
19:40
Speaker 3: There are a lot of Australians in those roles. It's amazing.
19:42
Speaker 4: How if you throw back a few rocks in you know,
19:46
Speaker 4: some of the Fortune five hundred companies, you'll find a
19:48
Speaker 4: lot of bozzies stacked up in the upper echelons there.
19:50
Speaker 3: It's quite amazing. So so there's that.
19:52
Speaker 4: I don't think the jurisdiction that you can make a
19:55
Speaker 4: lot of money and have a high paying salary exists anymore.
20:00
Speaker 4: And the reason being is what happens is the reason
20:02
Speaker 4: the jurisdiction is cheap is because the salaries are cheap,
20:05
Speaker 4: so you get that natural inflationary effect. That's what happened
20:08
Speaker 4: in Dubai. In Dubai, it was a lifestyle that was cheap.
20:11
Speaker 4: You didn't need to be paid a lot to have
20:13
Speaker 4: a very comforable life in Dubai. Obviously the salaries went up,
20:17
Speaker 4: the cost of living went up, and that's what we've
20:19
Speaker 4: seen globally and it's sort of you know, with this
20:22
Speaker 4: digitization of the world, people are very clue now in
20:26
Speaker 4: terms of I can go here. And what we're now
20:28
Speaker 4: starting to see is people sort of work in one
20:31
Speaker 4: location and live in another and they sort of commute
20:34
Speaker 4: in a digital sort of way to sort of get
20:36
Speaker 4: the best of both worlds. So we do see, for example,
20:39
Speaker 4: people living in Portugal under a very favorable visa for Australians,
20:44
Speaker 4: but working overseas and say Saudi and they commute back
20:47
Speaker 4: and forth. So people have to become more clever now
20:52
Speaker 4: to really try and get those those true deals.
20:57
Speaker 1: Let's talk about coming back to Austria, where often get
21:00
Speaker 1: correspondence on this one too, where people are say, we
21:03
Speaker 1: think you're coming.
21:03
Speaker 2: Back, what do we do? How do we do it?
21:07
Speaker 1: Are there any general rules that you think people should
21:10
Speaker 1: be aware of as they are listening to the show,
21:12
Speaker 1: sitting wherever they might be thinking. And I hope people
21:15
Speaker 1: listen to the Money postal to keep in touch, you know,
21:17
Speaker 1: with things here and how and particularly the financial affairs.
21:23
Speaker 4: Look to me, it is you want to crew wealth
21:25
Speaker 4: in the country, intend to return to or retire to.
21:28
Speaker 4: The reason for that is you not the gate, but.
21:32
Speaker 3: You reduce currency risk.
21:34
Speaker 4: Murphy's Law always says that if you hold all your
21:36
Speaker 4: wealth in Euros living in Europe and you're about to
21:39
Speaker 4: move back to Australia, something will happen on that day
21:41
Speaker 4: you've had to make that transfer, and currency risk is
21:44
Speaker 4: a big thing. We saw that with Brexit back in
21:46
Speaker 4: twenty fifteen. If you're going over seas for three to
21:49
Speaker 4: five years, dollar cost averaging your money back to Australia,
21:52
Speaker 4: you know, whether it's monthly, quarterly transfers, you got to
21:55
Speaker 4: get a smoothing effect in the FX rates, which means
21:58
Speaker 4: that you're not going to kill it, but you're not
21:59
Speaker 4: going to lose it. At the same time, when it
22:02
Speaker 4: comes to managing that risk, expats they collect assets like
22:07
Speaker 4: baseball cards when they're overseas, so foreign pensions and bank
22:10
Speaker 4: accounts and all these sort of things you need to
22:13
Speaker 4: assess t well. Ideally, twelve maybe six months out from
22:16
Speaker 4: returning back to Australia, what you can start to move back,
22:19
Speaker 4: because what's going to happen is once you are boots
22:21
Speaker 4: back on the ground, you land at Tallamarine or Mascot,
22:25
Speaker 4: and you start filling in that yellow Passionate arrival card
22:28
Speaker 4: and you tick that box for the first time that
22:30
Speaker 4: says resonant returning, because up until that point you're always
22:33
Speaker 4: ticking visitor, just as an audience note, because a lot
22:36
Speaker 4: of people make that mistake.
22:37
Speaker 3: So you tick residant returning.
22:39
Speaker 4: Then the clock starts ticking, and both your assets in
22:42
Speaker 4: Australia and globally and now accessible from a tax point
22:44
Speaker 4: of view, so we call it deemed acquisition.
22:47
Speaker 3: You're deemed to.
22:48
Speaker 4: Acquire that asset overseas at whatever the value is on
22:51
Speaker 4: that date of arrival. So if you don't want the
22:55
Speaker 4: complicated affairs, if you don't want to have to worry
22:57
Speaker 4: about filing two tax returns, that bringing that assets home
23:03
Speaker 4: in a very considered and moderate sort of way over
23:07
Speaker 4: that six month period is the best thing. Then obviously
23:09
Speaker 4: we have the added complications like you touched on before
23:11
Speaker 4: that foreign pensions. Some foreign pensions you can cash it,
23:15
Speaker 4: you know, provident funds out of Hong Kong, for example,
23:17
Speaker 4: for a one k's out of the United States. But
23:20
Speaker 4: then we've got the UK pensions, we've got the European pensions.
23:22
Speaker 4: Depending on those pensions, some you can cash out earlier,
23:26
Speaker 4: some you can't. So you need to do the homework
23:29
Speaker 4: early because no one's going to want to do this
23:31
Speaker 4: a week before they returned back to Australia. You know,
23:33
Speaker 4: you're too busy trying to work out how it all
23:35
Speaker 4: works with the airfares and trying to get your shipping container,
23:39
Speaker 4: you know, sort of packed, and you know you need
23:41
Speaker 4: to do this earlier. On a weekend, on a Saturday morning,
23:44
Speaker 4: just start looking at it. Say, write a list on
23:45
Speaker 4: the back of a post that the assets you hold
23:48
Speaker 4: overseas and then start one by one researching what I
23:51
Speaker 4: can move, what I can't move, and then how that
23:53
Speaker 4: works together.
23:54
Speaker 1: Does it make sense to use a global bank all
23:57
Speaker 1: the way, I'm wondering we don't really have global banks
24:00
Speaker 1: anymore than was aspirations at various times National Australia Bank
24:03
Speaker 1: trying to have some banks around the world so that
24:05
Speaker 1: they endz they don't know. So I'm assuming it would
24:09
Speaker 1: be sensible to have a global bank so that you're
24:16
Speaker 1: transfers et cetera, are all within at least the one bank.
24:21
Speaker 3: We don't actually recommend that.
24:22
Speaker 2: Okay, why is that?
24:23
Speaker 1: Now?
24:24
Speaker 4: The FX rates that banks will charge for their own
24:26
Speaker 4: internal transfers three to five percent margins on those transfers.
24:30
Speaker 2: Oh really, so who's better?
24:33
Speaker 3: Yeah, they make a killing.
24:34
Speaker 4: So we tend to use currency brokers O effects in Australia, asex.
24:38
Speaker 3: Listed is a good one.
24:39
Speaker 4: Whys currency fair all those sort of third party providers.
24:43
Speaker 4: You're getting point board aer point five percent margins on
24:46
Speaker 4: your effex, which if you're transferring one thousand dollars. We're
24:49
Speaker 4: not talking sheep stations, but if you are transferring one
24:51
Speaker 4: hundred thousand dollars or a million dollars, it could be a.
24:54
Speaker 2: Huge Sorry on the big global banks where they're charging.
24:58
Speaker 4: Three to five percent hspecies probably one of the worst
25:00
Speaker 4: unless you're a premier client, you know, you qualify for
25:03
Speaker 4: the upper echelons.
25:04
Speaker 3: Yeah, the big banks will.
25:07
Speaker 2: Laziness an internal bank transaction.
25:10
Speaker 3: Yep.
25:10
Speaker 4: They rely on your laziness of just being able to
25:12
Speaker 4: pick up an app and game banging. The money is
25:14
Speaker 4: there real time. People don't run the numbers, and when
25:17
Speaker 4: we run the numbers, they're quite staggering.
25:19
Speaker 2: Very interesting.
25:20
Speaker 1: That is very interesting okay, we'll take a short break
25:22
Speaker 1: back in a moment. Hello, Welcome back to The Australian's
25:31
Speaker 1: Money Puzzlive podcast. James Kirby here with Brett Evans of
25:35
Speaker 1: Atlas Wealth Management, Dubai based Australian expat affairs expert. We
25:42
Speaker 1: were just talking about you mentioned at one stage about
25:45
Speaker 1: some penance systems don't let you take the pension out. So,
25:49
Speaker 1: for instance, you might be old, I'm guessing a British
25:53
Speaker 1: pension and you can't get at that. Let's say you
25:56
Speaker 1: right there for ten years, your entire liedtle British pension,
25:59
Speaker 1: you come back to Australia, but you can't bring it
26:01
Speaker 1: with you. You've got to waste until your retirement age in Britain.
26:06
Speaker 2: To bring it back. Is that out five? Yeah?
26:09
Speaker 1: Okay, And similarly Australia is the same, right you can't.
26:12
Speaker 1: Let's say you go Let's say today you're thirty eight
26:15
Speaker 1: and you decide to go to Dubai and you end
26:17
Speaker 1: up living near the rest of your life, but you
26:19
Speaker 1: can't take your Australian super out till the day you
26:22
Speaker 1: retire at sixty five. So Brett out is the person
26:27
Speaker 1: who doesn't know where their life's going to go. How
26:30
Speaker 1: do they deal with their super if they're going to
26:32
Speaker 1: give overseas.
26:34
Speaker 4: It's interesting, actually I'm here running seminars in Zurich tonight
26:37
Speaker 4: and in Geneva two nights ago exactly about this topic.
26:41
Speaker 4: Because you are bound to hold your accounts in Australia
26:46
Speaker 4: the regardless of your circumstances, whether you're in Australia right
26:48
Speaker 4: at seat. So first thing you need to do is
26:50
Speaker 4: go through and do a bit of housekeeping on that
26:52
Speaker 4: super fund to make sure it stands on its own
26:55
Speaker 4: two feet while you're overseas, because you're not having twelve
26:58
Speaker 4: percent guarantees being paid into that account. So quite often
27:02
Speaker 4: employer contributions can mask.
27:05
Speaker 3: Poor performance or high fees.
27:07
Speaker 4: It's when you stop contributing to it that's when that
27:09
Speaker 4: momentum may slow down. So number two, certainly life and
27:13
Speaker 4: tipid insurance is not always valid while you live overseas,
27:16
Speaker 4: So we have become across cases where people are paying
27:19
Speaker 4: insurance premings for non insurance they could never claim on it.
27:22
Speaker 4: So talk to your fund to make sure that they
27:25
Speaker 4: don't recruit your insurance if you do live overseas, and
27:28
Speaker 4: if you do, turn it off last one would have
27:31
Speaker 4: to be s masfs. That's the biggest one. S messfs
27:33
Speaker 4: very popular with a lot of expats or a lot
27:36
Speaker 4: of austrained residency become expats, and we have this very
27:39
Speaker 4: gray space about central management and control. You know, there's
27:42
Speaker 4: a narrative out there that talks about I'm just going
27:44
Speaker 4: to appoint my brother or sister or father as the
27:47
Speaker 4: trustee of my trustee company and begre to manage it
27:50
Speaker 4: while I live and.
27:51
Speaker 3: Work and play overseas.
27:54
Speaker 4: It really ceases to become a self managedhient one when
27:57
Speaker 4: you're the beneficiary and your brother is the trustee, and
28:00
Speaker 4: the ATO has been taking a very dim view of
28:02
Speaker 4: these sort of situations. The only time I've seen it
28:05
Speaker 4: really work truly is when that brother and sister maybe
28:09
Speaker 4: join their s misses together and the brother who's living
28:13
Speaker 4: in Australia manages it. He has a larger portion of
28:17
Speaker 4: that joint account and he can manage it on behalf of.
28:20
Speaker 3: The sister who's living overseas.
28:22
Speaker 4: So now CMC, which is the most important part of
28:26
Speaker 4: a qualifying self managed ship, and it's still in Australia
28:30
Speaker 4: whereas a lot of people they pay lip service to
28:34
Speaker 4: sitting on WhatsApp telling their brother in law what to
28:36
Speaker 4: do via you know, from Dubai or London or New York,
28:39
Speaker 4: you know what to do with their accounts in Now,
28:41
Speaker 4: if the ATO ever find out that fund is noncompliant,
28:44
Speaker 4: and they'll lose forty five percent of the balance of
28:47
Speaker 4: the account in the first year, and if they rectify
28:51
Speaker 4: it within twelve months then they'll take another forty five percent.
28:54
Speaker 4: So the ATO give you what we call the temporary
28:57
Speaker 4: absence rule, which is two years. So from moving out
29:00
Speaker 4: sees you got two years, but you to wind it
29:02
Speaker 4: down and clean it up. Either you amalgamat it with
29:05
Speaker 4: someone back in Australia or you wind it down and
29:07
Speaker 4: got to cash and go into a retail or an
29:10
Speaker 4: industry super fund.
29:11
Speaker 1: Can I make contributions to my Australian SMSF when I
29:14
Speaker 1: work overseas?
29:16
Speaker 4: Now you can because that breaches the active members test.
29:20
Speaker 4: So what we do those sort of situations is we'll
29:23
Speaker 4: set up a separate retail super account what you can
29:25
Speaker 4: contribute into, and then when you move back to Australia,
29:28
Speaker 4: then you roll the retail super into an ISTHMASF that
29:30
Speaker 4: you originally had. So is SEFs are very unpopular for.
29:34
Speaker 1: Experts, interesting, which goes to show folks on this sort
29:39
Speaker 1: of stuff, you really do need advice. I don't think
29:41
Speaker 1: I've had a show where I knew so little Red.
29:46
Speaker 2: It's certainly in the last moment.
29:48
Speaker 1: I don't think I've had a guest on where I
29:50
Speaker 1: knew so little about the questions I was asking or
29:53
Speaker 1: the answers were quite so surprising, which makes it all
29:56
Speaker 1: very interesting. I hope for everybody involved, including the listeners,
30:00
Speaker 1: thank you very much for talking to us today from Zurich,
30:02
Speaker 1: but more generally from Dubai.
30:04
Speaker 2: Great to have you on the show. Thanks for coming on.
30:07
Speaker 3: Appreciate it. James, I appreciate your offer and hope everyone
30:09
Speaker 3: enjoyed the content.
30:11
Speaker 2: I'm sure they did.
30:12
Speaker 1: That was Brent Evans folks from Atlas Wealth Management, Dubai
30:15
Speaker 1: based expert on expact financial affairs, so I hope you
30:20
Speaker 1: have learned something. I'm sure you have whether you're thinking
30:23
Speaker 1: of coming or going. Today's show was produced by Leah
30:26
Speaker 1: Samaglue and do keep the correspondence up the Money Puzzle
30:30
Speaker 1: at the Australian dot com dot AU.
30:33
Speaker 2: Talk to you soon.