Returning home after living in another country can be exciting and overwhelming at the same time. It often means getting back in touch with old friends and family and resuming a career in your home country. It can also involve financial readjustment, especially since different countries have different economic policies, tax regulations, and investment opportunities.
If you are an Australian expat returning to your home country, here are some tips for setting up your finances and navigating the financial landscape.
Review Your Foreign Income
If you have worked abroad and received a salary or other forms of income, it’s essential to review how that income will be taxed in Australia. You might be eligible for tax concessions or exemptions, but you need to declare your foreign income and assets properly. The Australian Taxation Office (ATO) website provides detailed information on tax obligations, residency status, and double taxation agreements with other countries.
Check Your Pension and Superannuation
As an expat, you may have contributed to a pension scheme or superannuation plan in the country where you worked. You need to check whether you can transfer your pension or superannuation funds to Australia or leave them in your home country. In some cases, you may have to pay tax on the transferred funds, or your home country may not allow such transfers. Find out what options are available to you and seek professional advice if you need clarification.
Catch Up Concessional Contributions
Australian expats returning home should also consider the opportunity to make catch-up concessional contributions to their superannuation funds. Catch-up concessional contributions allow individuals with a total superannuation balance below a certain threshold to contribute more than the standard concessional contribution cap, provided they haven’t fully utilised their cap in previous years.
For those who worked overseas and may not have contributed the maximum allowed amount to their superannuation during their time abroad, catch-up concessional contributions present a chance to boost their retirement savings upon return and save on tax. This can be particularly beneficial, considering the potential interruption to regular contributions while living and working overseas.
Reassess Your Living Expenses
Costs of living in different countries can vary significantly, from housing to transportation to food and entertainment. When you return to Australia, you need to reassess your living expenses and adjust your budget accordingly. It might mean scaling back on some discretionary expenses and finding ways to save money on necessary expenses. For example, you can compare prices of essentials like groceries or insurance and switch to better deals.
Plan Your Investment Strategy
Australia has a robust financial market, with many investment options available to suit different risk profiles and financial goals. As an expat returning home, you need to consider your investment strategy and how it aligns with your long-term financial objectives. Some factors to consider include asset allocation, diversification, and tax implications. You can seek advice from a financial planner or use online investment platforms to research and compare different opportunities.
Seek Expert Financial Advice
Finally, returning home as an expat involves many financial considerations and implications that may require professional help. So, don’t hesitate to seek expert financial advice from a tax advisor, an investment planner, or a financial coach. They can guide you through the process of readjusting your finances, avoid costly mistakes, and achieve your financial goals.
Returning home as an Australian expat can be an exciting but challenging time, especially in terms of financial readjustment. By reviewing your foreign income, checking your pension and superannuation, reassessing your living expenses, planning your investment strategy, and seeking expert financial advice, you can navigate the financial landscape smoothly and confidently. With a solid financial plan in place, you can enjoy your time back home and look forward to a secure and prosperous future.
If you have recently returned to Australia and are looking to improve your current investment strategies or are looking to start your investment journey, click here to organise a complimentary 20-minute phone call with an EPG Wealth adviser.