Departure Checklist for Australian Expats To Be

Making the decision to become an Australian expat, and to live and work in another country such as Singapore, can be one of the most impactful choices you make. Whether it’s to increase your earning capacity, ability to hit the accelerator toward achieving your financial goals, or to progress in your career and chosen field, Singapore can be an excellent opportunity for many. As with any major change in life, of which the decision to move abroad is one, there are a number of items that need to be considered and planned for become taking the leap.

This week I discuss the key items to review and action before jumping on the plane to head to Singapore, or elsewhere around the globe.

1.Banks & Share Registries

It’s important that you notify both your bank and the share registries for any shares that you currently own that you will becoming a non-resident. If you know it already, you can provide them with your overseas address and contact details. The reason for this is so that they can change the status of your account, and apply the appropriate level of withholding tax on your earnings. For example, under the Double Tax Agreement between Australia and Singapore, the withholding tax on commonly held assets is as follows:

• Unfranked Dividends: 15%
• Bank Interest: 10%

To illustrate how this works, if you held $100,000 in an Australian bank account while living and working in Singapore that generated an annual interest rate of 2.0%, or $2,000, then the bank would withhold 0.2% or $200 of this interest amount.

2. Superannuation

If you hold a Self-Managed Superannuation Fund (SMSF) and you’re considering becoming an expat and moving to Singapore, it’s important to review with your accountant or financial planner whether you should seek to roll this into a small APRA fund, wind up the SMSF and roll it into a retail or industry superannuation fund, or to put documentation and steps in place to ensure that your SMSF does not breach the superannuation rules. The penalties for such a breach can be particularly harsh, so I would certainly recommend consulting a qualified financial planner on this one.

If you hold your superannuation through a retail or industry superannuation fund that is not an SMSF, it’s simply a matter of ensuring that your contribution strategy remains aligned to your financial goals, that your investments are appropriate and aligned to your risk profile, and that you continue to monitor your super or work with an Adviser who can on an ongoing basis.

3. Medicare

It’s important that you update Medicare and advise them that you will becoming a non-resident of Australia for tax purposes so that they can ensure there is a record of this on your file. You can read more about the implications of Medicare in my previous post here.

4. Private Health Insurance

Health insurance in Singapore can be particularly expensive, particularly when comparing the policies with the prices back at home, many Australian expats fail to include the Medicare Levy in their comparison. This does not mean that you shouldn’t have private health cover in Singapore and solely rely on your Australian cover, in fact it is quite the opposite. I am simply highlighting the importance of shopping around and doing your homework.

For many Australian expats and their families, it makes sense to suspend their Australian health insurance for the maximum period that the insurer will allow. For many this is a period of 2 years, following which there may be the possibility with some insurers to make a payment, and then suspend the policy again. The benefit of this strategy is that it avoids the major risk of re-entering Australia with a pre-existing condition that may result in your insurance application as a new member being rejected or accepted with exclusions or a premium loading.

5. Electoral Roll

It is important that you consider what to do about the Australian Electoral roll. If you plan to return to Australia within a period of 6 years, then you may wish to register as an overseas or non-resident elector, whereas if you intend on staying offshore beyond this period, it may be wise to consider removing yourself from the electoral roll altogether. You can find the relevant forms here to download to remove yourself from the electoral roll.

6. Consider Your ‘Superannuation’ Strategy

Before you board the plane, start researching and considering your options for continuing to maintain your retirement savings strategy even while you’re offshore. This may be directly into superannuation, into a share portfolio or another vehicle in Singapore, depending on your own circumstances. I would recommend reaching out to a qualified Adviser in the jurisdiction that you’re heading to before you even arrive to start thinking about your options. It’s always amazing how many people have come to Singapore for a ‘2 year stint’ and are about to celebrate their 10 year anniversary here.

7. Driver’s License

If you plan on driving in Singapore, or wherever you’re heading abroad, you may want to consider your options to convert your Australian driver’s license into an international license. Depending on whether or not you plan to drive, and how long you expect to be offshore could both directly impact whether you decide to pursue this one or not. Thankfully, Singapore has one of the best public transport systems in the world, so it is very easy to get around the city without the need to own or lease your own car.

8. Deemed Disposals

If you currently own shares, managed funds, exchange-traded funds or other assets in Australia, and you’re not planning on selling them, then you should speak to your accountant about whether it makes sense in your situation to carry out a deemed disposal. This effectively involves paying tax as if you’d sold them, with the key benefit in Singapore being that the shares can continue to increase in value without any Capital Gains Tax (CGT) liability for the period that you’re offshore. Please do note that this is optional, so I would certainly recommend discussing this strategy with your accountant.

9. Property Loan Review

It may be wise to carry out a review of your existing home loans before you depart Australia, and ensure that you’re set up appropriately for your move offshore. This may mean setting up offset accounts, closing down redraw facilities, adjusting repayments, reducing interest rates or otherwise, which could be very different depending on your own situation. Speak to a qualified mortgage broker and/or accountant to start exploring the most sensible options for your situation.

10. Get Connected

This final tip isn’t financial, but it can be an incredibly powerful one to make the experience of becoming an expat far more seamless for both yourself and your family. I would recommend starting to join various Facebook groups of other Aussies in Singapore. Given that we’ve all been through the experience of becoming an expat, and know and appreciate how daunting it can be, you’ll find that there’s a great deal of support and incredible people willing to share their expertise and experience, or at least be someone you can grab a beer or a bite to eat with.

If you have any other tips that you’d like to share, please add them to the comments. I’d love to hear about your experience of moving abroad and what you’ve found helpful.

To Your Financial Success!

Jarrad Brown is an Australian-trained and qualified Fee-Based Financial Planner with Australian Expatriate Group of Global Financial Consultants Pte Ltd providing specialist financial advice and portfolio management services to Australian professionals in Singapore. Jarrad Brown is an Authorised Representative of Global Financial Consultants Pte Ltd - No: 200305462G | MAS License No: FA100035-3

Australian Expatriate Group is a division of Global Financial Consultants in Singapore providing specialist advice to Australians living abroad.

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General Information Only: The information on this site is of a general nature only. It does not take into account your individual financial situation, objectives or needs. You should consider your own financial position and requirements before making a decision.

*Please note that Jarrad Brown is not a tax agent or accountant and none of the content outlined here should be taken as personal advice. You should consult your tax agent and financial adviser to review your current personal finances and financial goals to consider whether this strategy is appropriate for you.