Torn

[Klear]

I was born and grew up in AUS but have lived in the UK for over 25 years. I am retired. I have dual AUS/BRIT nationality,  as does all of my family. I am married with two young adult children. I have family in AUS including an elderly parent. Life has been good to me in the UK but I am now faced with a situation where one of my children wishes to move to AUS when he finishes uni but the other child wishes to remain in the UK. Both children were born and grew up in the UK but have visited AUS on many occasions over the years. If both children chose to remain in the UK, then my partner and I also would choose to do so. I have taken extensive tax and pensions advice and there are clear benefits to moving to AUS as well as all of the lifestyle pluses that are well known to me. However, I will miss many aspects of my life in the UK, my friends here and of course my child. Having a foot in each country is not an option for tax and pension reasons and I must make the decision of whether or not to move shortly. It is not an easy decision as I am sure many on this site would already appreciate! 

[Quoll]

Sympathies! You may well be like many of us destined never to have your family on the same continent! I don’t think there is an easy decision.  
 

I guess I am surprised that your advice says Aus is better for you financially especially as you won’t have built up a huge super pot here but I can see that the lack of an inheritance tax here is appealing. There’s also the issue of getting back into the property market here which can be quite eye watering and you don’t want to be getting a mortgage, even if you could.

I do see the appeal of being on hand to support an elderly parent - we did that for nearly 9 years and am guilt free whereas if I’d have left them to their own devices I would not have been so sanguine.

I guess you need to consider where your needs are to be best met. Where will your interests be best catered for, which of your kids is most likely to produce grandchildren and which is most likely to be stable. Where does your partner want to be? Do they have family and friends they may not want to be parted from? Your son going to Aus might have that streak of adventure which sees him swanning from state to state and ending up in Arizona!  
 

Sadly, at our time of life we have to make the decisions which suit us and let our kids fly.  If you and your partner believe that your life in Australia would suit you better than a life in England then you have the luxury of making that choice.  We did choose to return to Aus, I must add but my DH is Australian and we have a house here. If we had gone to U.K. in our working years and not just in retirement as carers for my parents, I most certainly would have stayed and I think my DH would too but in our situation it wasn’t feasible. 
 

Good luck with your decision! May I suggest a coin toss? If your first outcome leads you to say “best of 3” then I think you have your answer! 

[Marisawright]

1 hour ago, Klear said:

 I have taken extensive tax and pensions advice and there are clear benefits to moving to AUS as well as all of the lifestyle pluses that are well known to me. However, I will miss many aspects of my life in the UK, my friends here and of course my child. Having a foot in each country is not an option for tax and pension reasons 

Have you had more than one opinion on that score?   It's vitally important to take advice from someone who has experience of both the UK and Australian systems.   Taking advice from a British expert and a separate Australian expert is a recipe for disaster, as they do intersect and you need to deal with someone who understands how!

[Marisawright]

One red flag to me is the concept of “having a foot in both camps”. I’m not an expert but my own understanding is it should be fairly easy to avoid being considered domiciles in both countries even if you keep two homes. If your advisor is knowledgeable they should be able to solve that issue I’d have thought 

Edited April 19, 2021 by Marisawright

[Tulip1]

You say if both children chose to stay in the U.K. so would you.  It sounds like you are happy in the U.K. and will miss many things if you leave. I can’t help feeling that maybe you are following your child out there rather than really wanting to move. You even say you’re faced with a situation that one of your children are moving out there. As Quoll says, that’s what happens, they flee the nest. If it’s your hearts desire to move then go for it but to leave your life that you say you’ll miss and your child behind to follow another child doesn’t sound like an ideal option. 

[Melbpom]

8 hours ago, Klear said:

Life has been good to me in the UK but I am now faced with a situation where one of my children wishes to move to AUS when he finishes uni but the other child wishes to remain in the UK. Both children were born and grew up in the UK but have visited AUS on many occasions over the years. If both children chose to remain in the UK, then my partner and I also would choose to do so.

It's early days yet with your son finishing uni. You might find that he does a few years trialing life in Australia and then returns to the UK. You mention that he's visited but that's different to day to day living.

[Marisawright]

Sorry for the repeated posting, @Klear.  I was on my phone earlier, which doesn't lend itself to detailed posting.

Pensions - I am struggling to see how moving to Australia could benefit you.  Your British aged pension will be frozen on arrival and you will never get any increases (except while you are on holiday in the UK, after which it will revert).   You won't be eligible for the Australian pension until you've been resident in Australia for 10 years - and even then, it's means-tested so you may not receive the full amount.

If you have a British private pension, there is only one (private) company to which you can transfer in Australia, and there are substantial tax losses to be made if you don't get the timing exactly right. Depending what kind of pension you have, you may be better off leaving your pension in a British fund, but then you are at the mercy of exchange rates for the rest of your life. 

Tax - I'm guessing inheritance tax is the major consideration, otherwise I cannot see much difference in your taxation liability either way. You need to bear in mind that if you still hold UK investments while residing in Australia, you will still have to pay UK tax on those investments, and in fact that may be higher than you pay now, because you'll be classed as a foreigner.

Edited April 19, 2021 by Marisawright

[Skani]

3 hours ago, Melbpom said:

It's early days yet with your son finishing uni. You might find that he does a few years trialing life in Australia and then returns to the UK. You mention that he's visited but that's different to day to day living.

Agreed:  I'd be cautious about basing your decision on  your  children in any event.    They can be very career mobile these days - well, in "normal" times - and neither may settle in either Australia or the UK.     How would that affect your decision re location?  

[Klear]

Thank you, everyone, for your thoughts. Very helpful, although probably I won’t be tossing a coin! Apologies for the duplicate original post. 

I have always been quite decisive in making life choices but this one is causing me difficulties!

 I may have down-played my and my partner’s preparedness to live in AUS, even with the minuses. If we were to move, very much it would be because also we wished to do so, having weighed up all of the issues, and not only because a child had chosen likewise.

@Marisawright, thank you for your replies. In terms of fiscal and pensions advice, the firm I use is an international firm with bases in the UK and AUS and it has dual-qualified advisers with a track record in these areas. Your point about timing is particularly pertinent, which is one reason why I need to make a decision shortly!

 

 

[Marisawright]

6 hours ago, Klear said:

. Your point about timing is particularly pertinent, which is one reason why I need to make a decision shortly!

 

 

The timing has more to do with whether you are resident in the UK or Australia at the time of transfer rather than age

[calNgary]

9 hours ago, Klear said:

Thank you, everyone, for your thoughts. Very helpful, although probably I won’t be tossing a coin! Apologies for the duplicate original post. 

I have always been quite decisive in making life choices but this one is causing me difficulties!

 I may have down-played my and my partner’s preparedness to live in AUS, even with the minuses. If we were to move, very much it would be because also we wished to do so, having weighed up all of the issues, and not only because a child had chosen likewise.

@Marisawright, thank you for your replies. In terms of fiscal and pensions advice, the firm I use is an international firm with bases in the UK and AUS and it has dual-qualified advisers with a track record in these areas. Your point about timing is particularly pertinent, which is one reason why I need to make a decision shortly!

 

 

I think if you are down playing how much you want to be here in Aus, you need to start planning a move back. You certainly wont be the first family to move back to Aus.

Would your children have an adult figure in the UK if they choose to stay there and you moved? You mentioned you would miss your friends ,so i was just wondering if they are close friends who could help your children in an emergency if the need arose. How old is your youngest?

  Cal x

[Klear]

@calNgary there are people who fit that description. Youngest is in early twenties.

[Wanderer Returns]

You should stay in the UK until the son who wants to migrate to Australia has made the decision to settle here. You and your family are all settled in the UK, and you're happy there. It would be foolish to move back given your current situation. Assuming he chose to stay in Oz, you'd then have one son here and one son in the UK, so you couldn't make the decision based on immediate family ties. It would really be about where you are happiest. It sounds as though you would be leaving a lot behind, to be honest - 25 years would be most of your adult life.

Edited April 21, 2021 by Wanderer Returns

[Ken]

On 20/04/2021 at 08:02, Marisawright said:

The timing has more to do with whether you are resident in the UK or Australia at the time of transfer rather than age

There are age restrictions on investing in Super (if that is part of the strategy).

[Marisawright]

8 hours ago, Ken said:

There are age restrictions on investing in Super (if that is part of the strategy).

And you also have to be still working

[Ken]

11 hours ago, Marisawright said:

And you also have to be still working

No, up to the age of 67 it doesn't matter if you are working or not. Between 67 and 75 you have to be working. Over 75 you can't invest even if you are working (although your employer must still pay SGC contributions to your super account).

[Klear]

Thank you again to all who have replied. Much appreciated.

[Island]

Hi, seems to be quite a few people here who are well versed with pension/ IHT etc for people with dual citizenship.  Please can anyone give me a run down of what you have learnt?

We have lived in Oz for about 17 working years and UK for about 5.  We have 2 teenagers, born and raised in Oz - we are currently living in UK but kids are desperate to go back.

Any ideas about living in Oz and having investment flats in the UK? Good or bad idea?

So less or no IHT in Australia?

Most of our super is in Oz - but presume can still access it if living in the UK?

State pension very minimal for us in the UK, not sure if we'd qualify for it in Australia.

Any other pearls of wisdom would be greatly appreciated as I'm pretty clueless on this type of thing

 

thanks

[Parley]

1 hour ago, Island said:

Hi, seems to be quite a few people here who are well versed with pension/ IHT etc for people with dual citizenship.  Please can anyone give me a run down of what you have learnt?

We have lived in Oz for about 17 working years and UK for about 5.  We have 2 teenagers, born and raised in Oz - we are currently living in UK but kids are desperate to go back.

Any ideas about living in Oz and having investment flats in the UK? Good or bad idea?

So less or no IHT in Australia?

Most of our super is in Oz - but presume can still access it if living in the UK?

State pension very minimal for us in the UK, not sure if we'd qualify for it in Australia.

Any other pearls of wisdom would be greatly appreciated as I'm pretty clueless on this type of thing

 

thanks

There is no inheritance tax in Australia, so might be better for your kids if you die here 

[Marisawright]

2 hours ago, Island said:

We have lived in Oz for about 17 working years and UK for about 5.  We have 2 teenagers, born and raised in Oz - we are currently living in UK but kids are desperate to go back.

Any ideas about living in Oz and having investment flats in the UK? Good or bad idea?

So less or no IHT in Australia?

Most of our super is in Oz - but presume can still access it if living in the UK?

State pension very minimal for us in the UK, not sure if we'd qualify for it in Australia.

Any other pearls of wisdom would be greatly appreciated as I'm pretty clueless on this type of thing

 

thanks

@Island, to answer your questions:

1. If you already have investment flats in the UK, it makes sense to keep them.  If you have a good agent, it doesn't matter whether you're in the UK or Timbuktu.  You'll need a good tax adviser (one who knows both Australian AND UK tax) because you can go cross-eyed trying to get the tax right (and you can cop a big fine if you get it wrong), but their fees are tax-deductible.  @Alan Collett can steer you right. Don't wait till tax return time to book a consultation as there's a few things you need to do upfront.
    
2. No IHT in Australia
    
3. Yes you can access your super while living in the UK.  The catch is that it's taxable (by the UK).   If you take a lump sum, the Inland Revenue will grab over a third of it.  So your only realistic option will be to convert it to an income stream (pension) which will be taxed as normal income.  If you move to Australia, all of that would be completely tax-free.
    
4. The Australian state pension is dependent on years of residency, not years of work.. You would be eligible IF you moved back to Australia (you can't claim it while resident overseas). However it's a benefit, like unemployment benefit, not a fixed automatic payment. You only get it if your income and assets (including super) fall below a certain threshold. Here's the calculator:

http://yourpension.com.au/APCalc/index.html

[Steve Elliott]

On 22/04/2021 at 18:38, Ken said:

No, up to the age of 67 it doesn't matter if you are working or not. Between 67 and 75 you have to be working. Over 75 you can't invest even if you are working (although your employer must still pay SGC contributions to your super account).

As a financial adviser, I thought I would clarify a couple of points mentioned above. When it comes to super, the work test is such that "work" only has to be 40 hours during a 30 day consecutive period. The other point is that if you are 55 or older and are eligible to transfer a UK pension to Australia, while there is only one managed fund which qualifies as a ROPS (is eligible to receive a UK pension), many migrants have sought to establish Self Managed Super Funds (SMSFs) which qualify as ROPS. The catch here is that unless you have a substantial super balance (commonly suggested as between $300,000 - to $500,000), they are not as cost effective as industry funds. Having said that, they do allow greater choice for those who want to be more hands on with their investments.  SMSF advice is very technical and you really do need to seek out quality advice (which it sounds that you have already done). I would certainly avoid all the businesses which aggressively spruik free pension advice re transfers as they certainly don't provide the holistic advice required. 

[ramot]

1 hour ago, Marisawright said:

@Island, to answer your questions:

1. If you already have investment flats in the UK, it makes sense to keep them.  If you have a good agent, it doesn't matter whether you're in the UK or Timbuktu.  You'll need a good tax adviser (one who knows both Australian AND UK tax) because you can go cross-eyed trying to get the tax right (and you can cop a big fine if you get it wrong), but their fees are tax-deductible.  @Alan Collett can steer you right. Don't wait till tax return time to book a consultation as there's a few things you need to do upfront.
    
2. No IHT in Australia
    
3. Yes you can access your super while living in the UK.  The catch is that it's taxable (by the UK).   If you take a lump sum, the Inland Revenue will grab over a third of it.  So your only realistic option will be to convert it to an income stream (pension) which will be taxed as normal income.  If you move to Australia, all of that would be completely tax-free.
    
4. The Australian state pension is dependent on years of residency, not years of work.. You would be eligible IF you moved back to Australia (you can't claim it while resident overseas). However it's a benefit, like unemployment benefit, not a fixed automatic payment. You only get it if your income and assets (including super) fall below a certain threshold. Here's the calculator:

http://yourpension.com.au/APCalc/index.html

1&2

We have owned investment properties in UK from overseas for well over 20 years. Perhaps we have been lucky, but we have always had good agents, have all insurance in place, and hardly ever had more than a minor hiccup. We do find if anything electrical goes wrong we do have to remind agents they are covered, to avoid expensive call outs.

I do still worry about IHT though as all our income comes from UK, probably daft, but we will sell when the tenancies end, and have all our assets here.

Not too worried about CG’s tax as all in both our names and split and properties were valued in 2015 as to the regulations then.

All above is to the best of my knowledge 

Edited May 6, 2021 by ramot

[ramot]

25 minutes ago, ramot said:

1&2

We have owned investment properties in UK from overseas for well over 20 years. Perhaps we have been lucky, but we have always had good agents, have all insurance in place, and hardly ever had more than a minor hiccup. We do find if anything electrical goes wrong we do have to remind agents they are covered, to avoid expensive call outs.

I do still worry about IHT though as all our income comes from UK, probably daft, but we will sell when the tenancies end, and have all our assets here.

Not too worried about CG’s tax as all in both our names and split and properties were valued in 2015 as to the regulations then.

All above is to the best of my knowledge 

I should add that that we only got PR 2 years ago, so it was easier to leave everything on hold in UK.

[mt9754]

On 20/04/2021 at 01:31, Klear said:

Thank you, everyone, for your thoughts. Very helpful, although probably I won’t be tossing a coin! Apologies for the duplicate original post. 

I have always been quite decisive in making life choices but this one is causing me difficulties!

 I may have down-played my and my partner’s preparedness to live in AUS, even with the minuses. If we were to move, very much it would be because also we wished to do so, having weighed up all of the issues, and not only because a child had chosen likewise.

@Marisawright, thank you for your replies. In terms of fiscal and pensions advice, the firm I use is an international firm with bases in the UK and AUS and it has dual-qualified advisers with a track record in these areas. Your point about timing is particularly pertinent, which is one reason why I need to make a decision shortly!

 

 

Sometimes it can be difficult to make a decision if the time is not right.  You might find it becomes easier to make a decision later when there are less plates spinning (eg more years of retirement under your belt, more certainty with your siblings - you might find they both decide to stay in the UK afterall for example).

[Undecided99]

I feel for you as I am struggling with the decision whether to move back to One of Oz’s smaller cities after 20 years in the UK. My kids are 15 and 12 and we are all Aussie citizens but I worry about pulling them out of top selective schools here and giving up my and DH’s careers in fields that are less likely to lead to jobs for us in Oz so will be a big step back in career.  I spend a lot of time thinking about where will the kids be happier as adults and have better careers themselves, here or Oz. I think they’re more likely to move away to the bigger east coast cities in Oz from our home city when they graduate, but maybe are more likely to stay in London if we continue to live here, but who knows!? I may end up also with one on each side of the world. 

Am juggling trying to work out what is best for me/DH/my kids/my elderly parents who are in Oz. These are challenging enough issues when you are in one country but on different continents plus Covid is very challenging indeed!

Good luck!