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Financial Green Cross Code
Financial Planning for UK Migrants heading for Australian Residency is both very straightforward and simultaneously complex
So if you know what you should be doing then you could be on to a winner, writes Geraint Davies. The best way is to follow the equivalent of a financial Green Cross Code. Moving your pension funds to Australia can result in receiving the whole fund as cash on retirement. I did say can didn't I?
So where does the Green Cross Code come in? Start by thinking of the UK as one side of the road and Australia as the other. Never, ever underestimate the effect of what you could collide with as well as what 'vehicles' you could flag down and take advantage of. You could even get the costs of your move effectively tax deductible from Gordon Brown. Tax on pensions and tax on foreign exchange movements (even your house-sale proceeds could be affected) and one where visa anomalies create tax consequences does make for an exciting road crossing.
So why do so many migrants keep on colliding with financial traffic? Perhaps because they cross the road without the aid of an expert. They could have hitched a lift and received some tax advantages. The financial Green Cross Code suggests that you find a good crossing point – in other words, leaving at the start or end of a tax year can really make a difference. You also need to know what tax and social security issues there are at diffferent times of the year.
Ask yourself, are you able to clearly see the two financial systems in front of you and how they interact and what are you signing up to – will you pay less, or pay more? Stop, look and listen: these are the most important rules when crossing the road, and the same goes for your financial planning. Ask yourself, have you stopped to think? Have you realised that you need to do all of this before departure for Australia – or you could miss an advantage or get hit by something you didn't see. Never cross until its safe to cross.
Give yourself lots of time to have a good look around. From a financial advice point of view, that is not three weeks before departure. To get to where you need to be before you leave with your finances in the right shape for Australia can often take six months – yet many cross the road, so to speak, unprepared and with just a few weeks of preparation. We always encourage our clients to become acquainted with the system well before they cross over to Australia.
A little knowledge can be dangerous – when one self teaches – do you really know what is out there and have you really looked in all directions? We were one of the pioneers of pension transfers to Australia ten years ago. However, we are now looking in all sorts of directions – not just at the Australian tax. When its all clear, cross the road. You are going to have to cross that financial road, there is no choice, so why not do it so you don't get hit? Never rush, always check. And this is what financial advice is all about – getting it right.
Planning certainly pays dividends and you don't want to have accidents with your financials. It's a good way to go about planning your financial futures in Australia. You should start at the beginning not at point six. The world is certainly changing, pensions five years ago had to be moved almost without exception, now there is a new UK system and there is a new Australian system and Chancellors and Treasurers are always changing the rules. The traffic you are facing is real and its complex but the logic for taking advice is increasingly more important. Value is delivered by getting it right. Can you afford to get it wrong when you cross the road?
For further information:
Montfort International
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