Unpacking the Cost of an Overseas Sea Change

Order Kerni Whoalbury and a waddery woman. And before we get started on She's on the Money podcast, I would like to acknowledge the traditional custodians of the land of which this podcast is recorded on a wondery country, acknowledging the elders, the ancestors and the next generation coming through as this podcast is about connecting, empowering, knowledge sharing and the storytelling of you to make a difference for today and lasting impact for tomorrow.

About buying it brand new? It's a good point. You'll find out if that's the case, because I've got some cheeky, chiky novels.

who I guess cross compare moving quotes and costs. Obviously we're not endorsing them because I've never heard of them before, but I found their data and stats really interesting and there's nowhere also on the internet that actually provides this information. So if you're planning on moving overseas, this might be like a helpful tool. So we're moving from Australia, yep, all of these are based on you moving from Australia.

You're going to move to New Zealand. It's going to cost between eight hundred and sixty to thirteen hundred and forty five dollars to move your stuff.

because who doesn't want to move to London? The one between five thousand, two hundred to eight grand, And if you want to move to the US between fifty two hundred to twelve thousand, five hundred dollars, what the heck?

this is true either completely wild. Guess I'm assuming Facebook Marketplace in the US is way more exciting than Australia.

How important actually is it? I know you know that I'm going to say it's very important, but essentially it is. And the reason is because I think if you're going to take such a risk and move overseas, insurance is the thing that's going to make sure that you're safe over there. Let's call it like a safety net. So obviously, as I've said on the podcast, harsh but true, Beck, if you can't afford to pay for insurance, you can't afford to travel.

with for insurance? And she's like, oh, it doesn't matter. I think I've got some free stuff on my credit card, and like I booked my flats on credit card and I was like, oh okay, what credit card? Dore you we this? So then we spend twenty minutes of me like deep diving into their insurance and I was like absolutely insufficient, Like what if you get sick, what if you break your leg? What if you do all these other things?

needs to get home? Like absolutely not so very sweet of you. V No, it had nothing to do with me being sweet and everything to do with me lessening my own It's nice, but I was also like, a, I can't be that friend. You know what happens if something happens. And I kind of was like, in my head, if I buy this, it's going to be the biggest waste of money. And that's great because nothing will happen, and then I sleep at night. That's a really good way to look at it. I would like to through

the night without waking in a panic. So I'm going to buy you travel insurance. It's probably not the way everyone should deal with their stuff. I think that's just me being kind of a little bit low sunity, but I was like, absolutely not. I kind of caught up for a wine with you. What if something then happened, What am I going to tell to your parents?

Like why pay twice? It doesn't make it double nice, Like, I just don't think that's a good idea. So confirm if you're covered for like medical expenses or theft of valuables, baggage damage, cancelations, or flight interruptions, So if you're moving for work, they might have actually done all of that for you already to cover their butts, which would be very smart. But in that case, check so that you don't double pay.

for me in the next twelve months. I'm going overseats to live my best life. Not going to be a problem. But then dental isn't And you're like, oh, like what if something happens and I'm overseas, that could be a really really big cost. So make sure the things that are import to you were included. Consider local insurance to cover your needs instead of long term travel insurance because long term travel insurance can be really expensive, and if

you're moving overseas for an extended period of time. As much as you can buy travel insurance, it might not be the best financial decision. So make sure you choose a cover that actually suits your needs and is actually valid for the entire period that you're living Overseastcha. So some travel insurance companies might say, ah, this is our travel insurance for a maximum of six months in the policy, So even if you can go and sign up for it for longer, it might not be valid. So double

check that. If you extend your stay, remember also to extend your insurance. Like what if you beck go overseas and meet the love of your life and you're like, I'm just going to cancel this flight and stay another three months. Okay, I'm all for that. I love love, But go check your insurances and extend them out for another three months.

thousands of dollars for upfront medical care. And I need you to understand what a reciprocal healthcare agreement is, right, So in Australia, we're actually lucky to have these agreements in place with eleven different countries where we are actually able to access publicly funded medically necessary care. So those countries are the UK, Sweden, Slovenia, Ireland, Norway, New Zealand, the Netherlands, Multi Italy, Finland and Belgium. Oh how very

lovely exactly? Isn't that kind of cool? So you need to take that into consideration. If you're, like, you know, going for the top top tier of medical cover, sure do you need it? What's included in our reciprocal healthcare agreement?

the country where you earned it. So we're not saying you're going to be double tax, but you do need to declare it to them and be like, by the way, like you know, I got paid thirty thousand pounds for my job in the UK, and they'll go, thanks for letting us know, Beck, this, this and this, because you still have to pay hex while you're away, and that is joke. Like it's not a joke, it makes sense, but like you're going to end up with a hex bill when you get back, and you might end up

on the back foot. So if you work for an international company and you're doing what's called a campus exchange, then you're actually going to be taxed in exactly the same way as you were in Australia. So like, let's pretend for a hot second that she's on the money is actually UK based and you're currently working at our Australia office. And then I say, hey, Beck, come work in the UK office. But your contract for Australia is

going to stay exactly the same. You're just going to come and work for us in the UK, So nothing about your income would change, which means you still do an Australian tax return, but you're working in another country. There are a whole heap of things to consider when that happens, and one of those things is the exchange rate. So like right now, if let's say she's on the

money was an American company. The American exchange rate sucks, So like if I was still paying you in Australian dollars but you were living in the US, you would have to convert some of your Australian dollars to the US dollars so you could spend it and live there. You're actually on the back foot because the exchange rate sucks. So you need to consider those things when making decisions like that, because you might go, oh, v that makes sense, that's easy because I know for my budget how much

is in there. Like in my brain, Australian dollars just work better, and a lot of people will immediately go that makes sense, no worries. But in reality you might be being a little bit messed over by the exchange rate because there's someone who's heading to the US soon. The exchange rate is not that pretty and I'm not looking forward to paying for things in US dollars.

taxed twice for anything. In Australia. We have what's called tax treaties with lots of different countries, which are formal agreements between two different jurisdictions, and we currently have these treaties in place with more than forty different jurisdictions, which is kind of cool. And these treaties are also known as double tax agreements, and they're in place to prevent people from being taxed twice. Okay, So it's okay, it's

not something you need to worry about. And you're obviously in the top list of countries that has this treaty where Australia is, the UK and the US, So don't worry too much. What about the other ones that are not I'm not going to go through a list of forty if you are learning on movie, what do you mean the ones that aren't there? Right, So it's just

a little bit more complex. So it just means that when you're submitting your tax return, there's no treaty in place, so like the Australian Tax Office are going to have to do a bit more to work out what is and isn't included. Again, it's going to be really unusual for you to be double tax. It's just a bit more work, a bit more paperwork, whereas this makes it really easy. And what happens is, let's pretend it's the

UK for a hot second. You'll do your tax over there and you'll have all live the information and when you do your Australian tax return, you'll basically go, hey, here's the information of my UK income. And then the Australian Government's going to go, oh, but beck, did you earn anything in Australia And you'll go no, no, no, haven't even been home. So you'd put a big zero on it any other information, not submit it. They just want to know that you're checking in on an annual basis.

They want to track what you're up to and what you're earning internationally, and just to be across it, they're not trying to double tax you. I promise that's very good to know. Yeah, they're not. I mean I can't promise that forever because as you know, the tax system doesn't seem that fair sometimes, but that's not the episode for this Sure, it's a conversation. It's a conversation for another day. Yeah, in the bier garden of a pub. So how do you actually sort out your taxes while

you're away? So it's very easy, I promise, So make sure you have your MyGov account set up before you leave, and a lot of us might already have that. Make sure it's linked to the ATO, I say, before you leave, just because sorting things when you're in another country sucks. Having to call the Australian Taxation Office and trying to get things all sorted and dumb all you're away not a vibe. So like, just set it up before you

go so you don't have to stress later. Then you'll be able to manage your finances and just stay on top of what you need to do for your tax return, and you can also manage stuff like Super through there as well as you know, other different tax bits and pieces. The thing with Super as well while you're away. Let's get to that in hot second, actually, because I know you're gonna ask, but it's very important that you're across your Super well you're away and of course, you could

always get an accountant to help you. If it's a little bit too daunting, you can see a normal accountant who should be able to do it relatively quickly. If you don't have a dual income and there's nothing too

complex about your situation. But if your situation is a little bit complex, or you're a super high income earner overseas, what I'd be doing is going and seeing what's called an expat accountant, which is someone who specializes in Australian residents who live overseas, so they're completely across it and will know a little bit more than the average bear accountant. In saying that your average accountant should be able to

get across it, it's not that complex. Or just if you're a super high income earner or you've got any complexity around it, you might want somebody who is a little bit more, you know, in depth, to make you feel a little bit more secure.

If you're going to remain an Australian tax resident, they're going to be like, that's your deal with Australia, Like, we don't have to pay that. Sure, they might be contributing to in the UK a pension for you, or in the US you might have a pension account or something that money is being paid into as a part

of your salary package, which is fine. Again, one of the reasons why you might want to have a chat with an accountant because how do you get that money out if you're moving back to Australia in two years beck and you never have plans to live overseas. Again, having your retirement fund in the UK doesn't help you that much, doesn't it useless? So what do you do in that circumstances. But your super fund is still going to tick away while you're overseas. It's growing hopefully because

of compound interest, but you're not contribute to it. So we need to be across that you'll still be charged the same fees even if you're not contributing to it. So in Australia, we know that our employers right now have an obligation to pay eleven percent of our earnings into superannuation, which is very sexy.

when I get home. But it does compound, Like these are conversations that we have when the maternity conversation comes up, like and my men to just miss a whole year of superranuation, which is ultimately going to impact my retirement, Like if you're investing every year, like let's say it's between five to ten thousand dollars, If you're investing five to ten thousand dollars into your superannuation on an annual basis, that in retirement, if retirement's thirty years off for you,

which probably is if you're still planning or moving overseas, because that sounds like young people stuff. That's hundreds of thousands of dollars back, right, that you're missing out on in retirement by going, Oh, it doesn't matter too much. But what if you move overseas and then it extends out and it extends out Like I have had ex financial advice clients come to me after returning from leaving in the UK for twelve years. They have not paid

any super. Their super's basically been eaten away because they left it. Like let's say twenty four there were babies. They didn't have a whole heap in super to begin with, but it's been eaten away by not you know, paying attention to it. They might have had multiple super phones when they left. Fees have eaten it. Fees not sure their premiums exactly, like everything just compounds and adds up.

But I just think it's so important to be across it, and if you're moving overseas, maybe still contributing to SUPE should be part of your financial plan, even if it's not the sexiest thing ever. I just think probably a good idea to make sure that financially, future you is prepared and well looked after.

skip the country. It sounds real cool, right you're actually like, oh, skip the country, don't have to pay my nearly on hundred thousand dollars worth of hex bag black that is calling my name. Turns out that's not the case, and if I did move to the UK, I would still have to pay it. So long as the income you're making when you're abroad is above the minimum payment threshold, then you actually still need to make repayments on your HEX or helped it as you were if you were home.

And this is something that, as I said before the break, I was like, we're going to talk about it. This is something that stings a lot of people who decide to move overseas because they go, whatever, I'll move back in twelve months. They come back in twelve months. Maybe they've dragged their feet a little bit doing their tax return. They get their tax return and they're told that they have to pay eight thousand dollars in HEX. You've just

come back from an overseas trip. You don't have eight grand.

like like how rogue conferences would be. How you know all these financial institutions used to pay advisors like astronomical bonuses and like give them like flights to like Monoco and stuff while they were there so that they could impress them so hopefully their product would be used, and like right, that's now illegal. Right, that's a good reason. But they used to be like, oh, the industry used to be so good, and I'm like, why are you telling me this? Yes? Are you just flexing on something

I'll never have? It's good to know that it could have been a lot sweeter than this. You used to take the absolute mickey, and now we have more regulation, Royal Commission. But also, older white men used to be the ones that were far more across this than you. To see their females in the industry, Oh yeah, but it was always very interesting hearing their takes, and I feel like that's the same with you know, oh you used to not have to pay it like okay, sure who story brose. It doesn't apply.

to London for twelve months, two years, three years. Because if your ultimate intention is to come back to a Australia and base yourself in Australia and retire here, then it would make the most sense to not invest in an international environment because one, there's going to be currency exchange issues that you're going to run into, transfer issues like if it's overseas, like how you're going to manage

it when you come home. But also it makes more sense to either invest while you're away in Australia, which you can still do, or you know, put it on hold for a little while while you're overseas and maybe put that money towards you know, living overseas because it's much more expensive than when you're home. So completely up

to you. Yes, you can still invest, but I would probably not go and invest in an international market in international currency and like open a whole new share trading platform internationally if the intention isn't to stay long term.

your needs. Victoria Divine and She's on the Money are authorized representatives of Money sirper Pty Ltd ABN three two one six four nine two seven seven zero eight AFSL four five one two eight nine