Expat Chat Ep 11 – Foreign Resident Withholding Tax Contributing to Super

Welcome to our eleventh episode of the #Expatchat podcast where we discuss the latest tax and financial issues affecting Australian expats.


In today’s chat we discuss:

  • Main Residence Exemption Update (another one)
  • What is the foreign resident withholding tax
  • Foreign pensions
  • Contributing to super as a Australian expat

Topics, articles and events featured in this podcast:



Expat Chat Ep 11 – Foreign Resident Withholding Tax, Foreign Pensions & Contributing to Super


James Ridley:                     G’day Expats. Welcome to another episode of Expat Chat. Episode 11 today, Brett if that’s correct.

Brett Evans:                        That’s correct. We’re well into or not well into the double digits, we’re in the double digits anyway.

James Ridley:                     Yeah, we are.

Brett Evans:                        And given the time of the month and the time of the year, I’d say this will be our last one before we all break up for Christmas break.

James Ridley:                     That’s right, and I mean you were briefly just telling me about I suppose how prevalent and how big it is over in the UAE, I mean in terms of Christmas. I mean I know right now when I drive around on the Gold Coast, where I’m lucky enough to be based, there’s Christmas decorations everywhere. Even in my street where I’m living, everyone’s opting in to putting up those solar lights and everything like that and getting right into it. How is it over on the Emirates side?

Brett Evans:                        Look, in Dubai Christmas is against probably what popular opinion is, Christmas is huge here. So much so, Christmas trees everywhere. I was in a nativity function event that was in the middle of a desert on the weekend, three wise men, camels and everything. So it was actually quite apt and it’s huge. It’s something that it’s not only just a Western thing but even local Emiratis get into it. It’s a really big thing and it’s nice to see. It’s something that you’re always conscious of when you’re moving kids overseas are they going to miss out on Christmas but yep, not the case.

James Ridley:                     No, that’s right. And I mean, how’s your morning kicked off, I suppose, this morning? What’s your routine been like?

Brett Evans:                        Yeah, look I mean as you know we’ve got an office in Australia. So virtually it’s wake up, get a coffee into you and look at the 85 emails sitting in your inbox waiting for you, which is always interesting. It’s probably the problem we have with having clients in pretty much every timezone around the world, there’s always a client on the emails or some sort of communication going on. So it’s something that the morning’s always hectic because you’re sort of managing your time, what’s urgent, what needs to be done before you guys close up business for the day.

James Ridley:                     That’s right.

Brett Evans:                        But then also getting ready for our day ahead and leading into Europe waking up and clients coming in through there. So it’s a very fluid type of morning I guess is the best way to describe it. It’s something that you wake up and you never know what’s going to be there. You’re obviously picking up what the markets did overnight and also too, probably just touching on the key points that clients want to resolve before they break up for Christmas.

James Ridley:                     Yeah, that’s right. I mean speaking of markets, I just saw today the ASX it’s had I think a huge day. I think they said the best day since the election. So there you go, obviously, it’s some positive news.

Brett Evans:                        The Christmas rally’s always a… I wouldn’t say given but just for a bit of a fun fact, as you know we always like to always segue off into very different areas here against script, the Christmas rally just for those people at home and listening and watching, wonder why this same thing happens every year and it’s quite a simple phenomena. Essentially what it is, is the banks, the top three banks. So ANZ, NAB, and Westpac, all pay their dividends this time of year. And there’s about 15 to 16 billion dollars worth of dividends that get paid out to investors today or around this sort of same time every year. And essentially what happens is for mom and dad investors, that goes in their bank account. But if you put your fund manager hat on for a second, suddenly their account is awash with cash.

Brett Evans:                        Now the senior fund managers, they’re in Vail, Colorado, Europe skiing so it’s the junior burgers who are managing the portfolios back at home in Australia over the Christmas break. They have a strict mandate that tells them how they manage their money, how much cash they can hold and so on and so forth. So essentially what happens is you’re the junior guy in an empty office managing the portfolio while your bosses are away overseas having a great time. And what happens is they don’t have the decision to make new investments. They’ve just got to keep re-indexing or re-weighting a portfolio based on the mandate. So all they do is they take the cash that comes in today, tomorrow, yesterday and just redeploy it in the market to maintain their weight. So that’s essentially why we get a Christmas rally every year.

James Ridley:                     Yeah, okay and I mean that’s probably something that we see as well when it comes over to January, that January effect as well where there’s that cyclical uplift in markets as well.

Brett Evans:                        Look, it is visible. A lot of hype, not hype, there’s a lot of conjecture about January determines the course of the markets for the year. In Australia not so because let’s be honest most people are away on holidays until Australia Day including a lot of the people in the financial services community, fund managers and the like. So it’s something that, yes, US will dictate some of that but in Australia, not so much.

James Ridley:                     Yeah, okay. Well Brett, let’s kickstart today’s episode with I suppose today’s itinerary. Now today obviously touching base again on the main residence exemption and a pretty cool update on that one. The next item I want to discuss briefly is what is the foreign resident capital gains withholding tax because it is going to impact a lot of Australians now. Contributing to super as a non-resident, foreign super transfers as well as just touching base on the six month rule there. Foreign pensions and what a UPP deduction is. I’m not sure if many people know what that is. I’ll be impressed if they have. And lastly, just some top three tips from yourself when first moving overseas and becoming an expat. So, that’s on today’s agenda but first I might get you to do that little disclaimer that we need.

Brett Evans:                        Yes, any information that you derive from us, whether it be from watching, listening, osmosis ESP, should be taken as entertainment only and should not be construed as financial advice. Please seek a professional to receive your own personal financial advice.


Another Main Residence Exemption Update


James Ridley:                     Absolutely, that’s right. Now let’s jump straight into it. Main residence exemption. Okay now as we all know, we’ve been following this very closely since day dot, 2017, since it was announced.

Brett Evans:                        Almost sick of talking about it.

James Ridley:                     I know, and I’ll be honest, I’m not sure how much longer we can talk about it just because it’s sort of the same old song and dance now. But I mean huge update obviously in the last week or two as we know. Anyone that’s been following us, our expat chats, knows that we’re constantly talking about it and giving updates but now the critical one has come through. What is that one?

Brett Evans:                        Royal Assent went through. So on the 12th of December, the governor general signed off and the legislation was put into place. So no more banging on about it, no more trying to stop it. It’s here, it’s here to stay. So unless the government brings out legislation that removes it or changes it, it’s now the new nexus for Australian expats to consider. So those people that are already overseas, 30 June 2020 is the big red mark on the calendar.

James Ridley:                     Yep, and obviously a lot of expats will be considering their options whether to sell the property pre that date. As always, settlements can take place after that date but sale of contract needs to be signed before 30 June 2020. That’s crystal clear, especially in the legislation. Then I mean expats need to decide whether they sell, whether they hold and just don’t sell until they come back because obviously the key items within the legislation is what is technically your residency status at that point in time when you signed that contract?

James Ridley:                     Non-resident, okay, you’re going to pay a huge amount of tax. And as an example, I mean I did a brief calculation for a client who has chosen to sell, which will rename nameless but they bought their property in 1994 in Sydney for 400,000. They’re going to go to auction-

Brett Evans:                        Wow.

James Ridley:                     Yeah, I know. I was shocked, nearly fell off my chair. Going to go to auction early next year and they’re looking… I suppose the real estate agents have given them a rough estimate of 3.5. Now, I know, I know, when I heard that, that’s when I did fall off my chair. But I did a calculation for them based on them selling it 30th of June. If they sold before that, no CGT. If they sold it and the contract was signed on the 1st of July, more than $650,000 in capital gains tax.

Brett Evans:                        Wow.

James Ridley:                     So there you go.

Brett Evans:                        Go somewhere to plug the budget gap they were talking about in the media today about Mr. Frydenberg not quite hitting his numbers on the budget. So let’s hope we contribute to that demise of the budget by ensuring that no expats get caught up in this.

James Ridley:                     No, no, that’s right. And it’s a sad day, to be honest and it’s just… The amount I suppose of lobbyist groups that were going against this and they just haven’t been heard. Obviously it’s been put back and put back and put back and now we only have six and a bit months to make the decision, it’s alarming.

Brett Evans:                        I think from our point of view, we’ve now gone from trying to stop it to now just getting out there and getting loud for the next six months to make sure that every expat is aware of this. We’re not saying sell or don’t sell but just be mindful of the repercussions that could happen should you decide to sell post July as a non-resident.

Brett Evans:                        What we’ll be putting up on our website today is we’ll be running two live webinars on the 14th of January to really just get out there and get every expat to understand and learn about these sort of things. So we’ll be running one at 10:00 AM Queensland time, which will cover those in Asia. If you’re getting up early for the day whether it’s in Singapore, that’s 8:00 AM or Thailand 7:00 AM or China and Hong Kong, same thing. Then also one at 3:00 PM Dubai time, which will cover off on those in the subcontinent, Middle East and also Europe and the UK as well too.

Brett Evans:                        So I’ll put it in the show notes below. If you are listening to this on a podcast, you can go to our website atlaswealth.com, go the webinar section and you’ll see two of the timings there. Please go and RSVP your spot and we’ll put a lot of effort and emphasis into providing as much value as we can in those live webinars.


What Is The Foreign Resident Capital Gains Withholding Tax?


James Ridley:                     Absolutely, and this feeds into the next topic that I did want to go over today and it’s this foreign resident capital gains withholding tax. Now, a lot of people when they hear what it is they naturally think, “Okay, I’m a non-resident that doesn’t apply to me, I’m an Australia citizen.” But unfortunately, it does, it does apply to you. Now that this main residence exemption is coming through, it is quite likely that we could have a lot of Australia expats going to market in the next six months.

James Ridley:                     Now the foreign resident capital gains withholding tax essentially states that if you’re a non-resident, so yes a non-resident for tax purposes and you sell a property that is valued at more than 750,000, the purchaser technically needs to send 12.5% of that purchase price to the ATO. Now, the reason why they introduced this was because previously a lot of foreign residents they were selling properties, they weren’t lodging a tax return. So essentially encompassed their last income tax liability to the ATO for the capital gain that had accrued on that taxable Australian property. Therefore, they introduced this as a way of capturing some sort of tax and that way the ATO would get a piece of their pie they were meant to even though the tax return hadn’t been lodged.

James Ridley:                     Now the reason why this is a bit of in issue, or not issue, it’s just something to be aware of is that if we’re going to be selling out properties now through this update in the MRE legislation and our property is worth than 750,000 it does mean that a bit of that or a portion of that sale price will be going to the ATO and sometimes it might not need to. Now there are ways that you can obviously get that back and that does encompass lodging either a clearance certificate or you can vary. You can do a variation to reduce the percentage all the way down to 0%.

James Ridley:                     Now, you either need to use an Australian tax agent or essentially a conveyancing solicitor to assist with that. But just bear in mind that it is likely that if you do sell your property in the next six months you will see that coming through and you might have to pay that tax. But again, can get out of it, can lodge a tax return, get that tax refund or credit back. But if you’re not aware of what that piece of legislation is, please do reach out, get in contact or do some research because it is something that will catch a lot of Australian expats now if they choose to sell, it’s a bit unnerving.

Brett Evans:                        Well, it is. I mean if you’re selling a property for a million dollars, which these days in Australia, is not a lot of money. Pretty sad to say that but there’s a lot of properties out there worth a million dollars and we’re looking at $125,000 of that a million not being paid into your account, which you may be expecting that to occur. So it’s something to be mindful of. Certainly, it’s the five Ps, prior preparation prevents poor performance. I’m not going to say the other version.

James Ridley:                     Yeah, I was just thinking you left out some profanities then but that’s okay.

Brett Evans:                        That’s right. We’re G rated on this podcast on YouTube so we’ve got to make sure we’re doing the right thing.

James Ridley:                     Geez, are we? Okay, all right.

Brett Evans:                        Yeah, we’ve got to make sure, even if there’s little kiddies at home watching, not that they would.

James Ridley:                     You might need to go back and bleep me, Brett. I think I’ve dropped a few naughties before. Anyway, I’ll keep it to PG.

Brett Evans:                        PG, no F-bombs. But yeah, look it’s something that we’ve come across time and time again, people not realising this and suddenly the sale price has come through and they’re light on. So as you correctly pointed out, you haven’t lost the money, you just need to go through the process of claiming it back.

James Ridley:                     That’s right, that’s right and I mean you can either do a variation to vary it down to 0%. Use an accountant to assist you or a conveyancing solicitor or you get a clearance certificate. I’d be impressed if you can get a clearance certificate because that usually only applies to citizens and normal Australian residents but they do mention it there on the ATO.

James Ridley:                     Then again if you don’t go down those two options, then they will get the tax and you just need to lodge an early tax return to get the tax refund back. But again, properties that are valued at more than 750,000, that’s a significant amount of capital that’s gone to the ATO.

Brett Evans:                        Pretty much most properties in Australia these days. I mean look at the average price of Sydney and Melbourne alone.

James Ridley:                     That’s right.

Brett Evans:                        It’s north of 750. So Brisbane would be heading up there too.

James Ridley:                     Yeah, absolutely and I mean I’ve already mentioned to that client previously, just be aware that this is going to come through based on your sale price, it’s more than 300,000 that could go to the ATO straight away when it’s not due at all. So make sure you invest some time and get the variation down to zero or get the clearance certificate ASAP because you need to do it weeks before. So anyway, just be mindful of that ladies and gentlemen.


Contributing to Super as a Australian Expat


James Ridley:                     Now moving on, talking about contributing to super. Now, every time I have a consult, this always gets raised whether they can. I haven’t read anywhere… I don’t even know if it says on the ATO where it says you can’t contribute to super. Obviously, there is a bit of a caveat there about what type of super fund you run, that being a self-managed super fund, absolutely it’s a bit of a no-no, especially when you’re a non-resident. But Brett, lay it straight. Can we contribute to an ordinary retail super fund whilst we’re a non-resident, can we do it?

Brett Evans:                        One hundred thousand million percent.

James Ridley:                     Yep, absolutely and a retail super fund, ladies and gentlemen. That’s a super fund like a HESTA account, a Hostplus account, an Australian super account. Those are retail super funds. So, yes, you can make either what’s called a concessional contribution or a non-concessional contribution. A concessional Brett, just give me a bit of an example, concessional.

Brett Evans:                        Concessional is before tax. So while you’re an Australian resident, your employer ought to be contributing to your super as part of your salary package and that is before tax. So essentially, you might be on a $100,000 package plus super, which is 9.5%. So, essentially what that means is your employer would be putting $9,500 per year into your super account. It is taxed on the way in at 15% but essentially it’s before tax. So essentially when they’re working out your marginal tax rate, it’s post your super inclusions.

Brett Evans:                        Non-concessional is after tax. So money you’ve got sitting under the mattress, in the fridge, wherever it may be and you’re putting that into super after you’ve received it and paid tax on it, that is a non-concessional. There are different contribution caps that apply, 25,000 for concessional and 100,000 per year for non-concessional. It’s amazing being based in the Gulf region there’s a whole industry here built on telling people you can’t contribute to super, which I find quite laughable.

James Ridley:                     Okay, of course. And I bet… What do they promote when they say, “You can’t contribute to super?” What are they selling them on over there?

Brett Evans:                        Well, they’re saying, “It’s in your best interest.” And of course to contribute to an Isle of Man investment bond locked up for 10 years paying 5% per annum in fees and actually getting very poor investment performance as well. So if you’re lucky, you’ll get your money back out after 10 years.

James Ridley:                     Yeah, I spoke to a gentleman that was based in I think he said Singapore, and I mentioned some initials of the company and I got it correct actually first go, and so he’s held it for four years and he says it’s gone backwards and he says it’s meant to breakeven soon, that’s what they keep telling me. So the fact that you look at most markets, what markets have done in the last years, it really should’ve actually been, I suppose, in the black by a fair bit by now. So that’s concerning.

Brett Evans:                        Well, that’s what I say to Australian expats in the Gulf region. I say, look at the market, look at your performance. Ignore the… What’s the word? I guess diatribe that gets put out by the investment managers and also the financial advisors in inverted commas. If your portfolio is not performing, there’s a problem. You can explain anything under the sun but if the markets around the world are going up and yours is not, then you’ve probably made the wrong choice.

James Ridley:                     Yeah, I think a pretty good example of that, I mean you look at what the ASX 200 has done. I’ve just Googled it while we’re talking, ASX 200 just this year alone has done just over 20%. So there’s a pretty good reflection year-to-date. Obviously that’s purely reflective of just the ASX 200, not world markets but giving you a bit of an example there.

James Ridley:                     One other contribution that you’ve mentioned was that concessional contributions sorry, but also that catch up concessional contribution, which people should be aware of now. It’s in effect, it started as of last financial year. So that just states that if your super balance is under 500,000, and again depending on how old you are, if you’ve met the active work test if you’re over 65 I should say, I know you can technically accrue concessional contributions. You might ask yourself why, because they’re pre-tax and then they get taxed on the way in. But it just means that you might be able to claim that as a tax deduction in the future depending on your circumstances to offset a capital gain. That’s getting into it and that’s pretty complex that whole catch up concessional contribution. So do speak to someone to get advice on that if you’re trying to offset some sort of income or a capital gain that you don’t want to pay the …

Brett Evans:                        From memory, we covered off on that on episode eight I think it was. You went into a lot of detail on how that works and everything.

James Ridley:                     I think it was, I think I fleshed it out a bit just because it’s a great type of tool that expats can use especially when they have different assets accumulating, different I suppose, so it deteriorates because they’re non-residents.

Brett Evans:                        Taxable and non-taxable property and those sort of things.


Transferring your Foreign Super or Pension


James Ridley:                     That’s exactly right. The next item let’s delve into it. Foreign super transfer, so a foreign super transfer in terms of foreign super funds around the world, there’s not many anymore, to be honest, Brett. I daresay there might only be one now, which might be just-

Brett Evans:                        The UK.

James Ridley:                     The UK system. In terms of foreign supers, you can always apply for a private ruling on a foreign super fund and have the ATO provide I suppose their point of view on it, how it should be taxed and those sort of things. But I wanted to go into what this six month rule is. Brett, did you want to address the first six months and how that’s treated and I can address the six months after that?

Brett Evans:                        Yep, essentially when you move back to Australia and you land in the country and you tick that incoming passenger card to say resident returning, the clock starts ticking. The ATO give you virtually six months to be able to move any deemed foreign pensions into your Australian superannuation schemes and not have any applicable taxes from an Australian capital gains tax point of view.

Brett Evans:                        If you delay… Look and it’s quite a common thing, there’s a lot of other things. You’re trying to get kids into school and all those sort of things when we’re repatriating. But long story short, you do have a six month time that starts when you land at Kingsford Smith or Tullamarine or whatever airport you land at, to move those foreign pensions into your super, in the most tax efficient way.

James Ridley:                     Yeah, absolutely. And I mean the six months sort of tax-free relief rule is quite handy depending on the circumstances. Then any I suppose period after that six months, from the date in which you’ve arrived, that will essentially make up what’s called applicable fund earnings. So how that operates is if you’ve got a super balance which is worth 200,000 or a foreign super fund that’s worth 200,000 on the date of your arrival back to Australia, that 200,000, if it’s deemed to be a foreign super fund, isn’t taxable. And therefore, you can make use of the after tax contribution to get that into your Australian super.

James Ridley:                     However, if it takes you say 18 months, 10 years to bring that foreign super fund to Australia, then that whole period up until the date you transfer it, is taxable in the eyes of the ATO. And that’s what known as the applicable fund earnings. So in the event we’re able to do a direct transfer from one super fund, the foreign super fund, straight into your Australian super fund, then you’ll need to complete the correct form so the ATO knows to essentially charge 15% tax on those applicable fund earnings over that period. So it’s very important that that’s done.

James Ridley:                     Just be mindful, there is not too many super funds, I daresay any on the markets that will accept a foreign super fund transfer. Maybe a self-managed super fund, maybe. That’s going into probably the UK pension side and those sort of things. But generally speaking, people might have to look at withdrawing, depending on their circumstances, the foreign super fund, if it is deemed one within that six month period. And then working out ways to actively contribute it back into super getting to that concessional taxed environment to essentially set themselves up for their retirements. So that’s I suppose foreign super fund transfers, applicable fund earnings, the six month rule. It’s pretty crucial.


What Is A Undeducted Purchase Price (UPP) Deduction?


James Ridley:                     I suppose the next item that we feed into is the foreign pensions or foreign super funds, foreign pension systems. This might operate with the fact that we might get a government or state pension system or pension income stream from a lot of overseas countries, depending if we’ve paid into it like social security, those sort of things. And what I wanted to briefly touch base on here was what a UPP deduction is or Undeducted Purchase Price deduction. Now a lot of the time these types of deductions, they need to be applied for by a private ruling. It’s essentially saying that you will get this deduction which is the portion of your pension, whether it’s being paid from a foreign government that is not taxable. It makes up the contributions that you paid into that scheme for the last 20, 30, 40 years. And it just means that the ATO is saying that, “We’ll give you a percentage deduction based on your annual income on that but everything else is going to be treated as foreign-sourced income.”

James Ridley:                     So, unfortunately, it means we still will pay some sort of tax on that income stream but we are giving you this sort of deduction. A common one I come across is the UN pension scheme, where depending on the division that you’ve worked for we don’t get this kind of tax-free relief that a lot of other countries get. And I’m not sure, Brett, with your clients whether you’ve come across that before but I know there’s probably only two or three that do get sort of a tax-free income stream in Australia.

Brett Evans:                        Yeah, look from my own experience it was a couple of NGOs in Myanmar. That was quite different but it comes back to the classification of the hiring company or the organisation I should say that hires you. So as you say, the UN’s a massive beast and there’s so many different silos inside of that.

James Ridley:                     That’s right.

Brett Evans:                        So everyone’s different and depends on what the Australian Government has negotiated with the different respective parties.

James Ridley:                     Yeah, that’s right and it’s usually a case where you either submit a part ruling with the ATO because they’ll have the legislation which they can refer to or the rulings in question. Or the provider which actually be able to give you that information. I think from memory, potentially the World Bank organisation might be one that is tax free, don’t quote me on that but I’ve come across that before with a client.

Brett Evans:                        I think it is, yes.

James Ridley:                     Yeah, so that’s one that’s obviously up there and then sometimes maybe even WHO as well. But again it depends on the vision you’re working with, which makes it even harder.

Brett Evans:                        Yeah, no, look the health organisation I was going to say as well too I’ve seen different people in different departments have completely different structures as well in the World Health Organisation as well too. So it’s definitely something that you need to seek advice on. It’s something that you really need to understand the details of the moving parts just because you might have a friend or colleague who works in the same organisation, it doesn’t mean you’ll have the same plan.

James Ridley:                     Yeah, absolutely and I mean that’s a great scenario where, well not a great scenario I should say, but they’re making an assumption based on them working for the same organisation but they’re in a different I suppose subsidiary and they’ve just made the assumption it’s going to be tax-free. They’ve set their whole retirement up around that, the fact that they’re thinking it’s going to be tax-free because they haven’t sought advice. And then they find, uh-oh that great pension that I’ve been paying into for the last 25 years is now taxable, I’m losing a fair bit there to the taxman. So just do your research, if not seek formal advice to make sure you get that confirmation. That way you can plan ahead for that retirement because-

Brett Evans:                        I think it’s a great point because a lot of these plans are also optional as well. And it’s important that Australian expats understand are they better off paying into super or are they better off paying into their organisation plan because there can be very different outcomes. Obviously, if they’re paying into super, yeah they’ll be paying 15% tax on earnings and 10% on capital gains tax for assets held longer than 12 months but once they tick that box, they hang up the boots and go into retirement mode, it’s tax-free.

James Ridley:                     Yeah, correct.

Brett Evans:                        There may be incentives to contribute to your organisation or some sort of government body while your overseas but those benefits may be traded off that when you move back to Australia to retire, you’re paying tax at the marginal tax rate as opposed to no tax at all in super. So it’s always important that Australian expats understand the difference of not only the now but also the next five, 10, 15, 20 years.

James Ridley:                     Yeah, absolutely and I mean the reason why I’ve raised this Undeducted Purchase Price deduction is because I have several clients that work for the UN. We’ve done our research and unfortunately, there’s no tax relief given, it’s treated as foreign-sourced income. They can apply for a UPP and that’s it, which is unfortunate because a lot of these clients have worked for the UN for more than 10 years and now it’s a case where it’s planning ahead. So never make an assumption based on I suppose your work colleague, and they might be in a different division.

Brett Evans:                        No, great tip.

James Ridley:                     And that’s pretty crucial.

Brett Evans:                        Good tip.


Top 3 Tips When Moving Overseas


James Ridley:                     Listen Brett, the next one I want to dive into, I want to pick your brain on, now that you’ve been in the UAE as well, you’ve been an expat for a while now, former expat again. Top three tips when moving overseas? And I think it’s pretty important we got into it and flesh this out.

Brett Evans:                        Yeah, look I mean people probably expect me to delve straight into the financial side, which I will but not straight up. First of all, I would say those people who are considering right now to becoming an Australian expat or those who are looking at moving from one location to another are very fortunate because there’s a wealth of knowledge online in terms of doing your homework.

James Ridley:                     Great tip, yep.

Brett Evans:                        So probably one of the best ways to data mine information is actually in the Facebook groups. There’s an Australian expat Facebook group in pretty much every location that an Australian expat exists. So get in there, ask questions, Australian expats right always happy to help other expats. So get in there, use the search feature in these groups. Search on key… Whether it’s accommodation, schooling and those sort of things. It’s amazing how it certainly helped us decipher what would have been a monumental amount of information to absorb in a very short amount of time. So Facebook groups are great for that and a quick plug for our Australian expat Facebook group, Australian Expat Financial Forum. If you’re not a member, get on there. Facebook groups, would be the first one.

Brett Evans:                        The second one would certainly be seek advice before you go. And we applied our own advice to our situation before we went making sure that we covered off on all the key points before we moved. Like we always say, Atlas doesn’t own a time machine. We can’t go back for clients and change what you should have done before. So it’s amazing how just simple things like understanding how a move will affect you financially from a tax point of view or from an obligation point of view if might have HECS or student debt, just understanding these things is probably the most important part because there’s so much misinformation out there. You’ve got enough on your plate dealing with living in a new location, trust me. I’ve been here since June and I’m still getting little bits done. We haven’t ruled everything off just yet.

Brett Evans:                        What you want to try and do is get as much off your plate before you move because it is overwhelming when you do move. Setting up bank accounts, visas, residencies, schooling, all these things go on and on and on. So to me, in a perfect world, getting advice before you go is the best thing because you might say, “I’ll do it when I get over there.” Trust me, when you get over there, you are overwhelmed with change and everything, the last thing you want to do is, “I need to go speak to a financial planner to find out how this move’s affected me.” You want to do it before you go and yep, go.

James Ridley:                     Sorry, mate. I was just going to say I think you’re spot in terms of seek advice before you go because once you’re over there, you’re just too busy and as well as you leave a lot of things in the wind. Like you said, you’re still picking up things from when you first moved over there and I mean a lot of people when they head over, they forget about their tax obligations to the ATO, even declaring themselves as non-residents. I’ve spoken to plenty of people which they’ve been overseas for three, five, seven, 10 years and they go, “Oh, crap. I never did that last tax return. I never declared myself as a non-resident.”

James Ridley:                     Well, what have you been doing with any bank accounts and all these other things that are still back in Australia that are still operating? What’s going to happen now? So don’t leave it for that long and then go back and try and pick up the pieces and clean it all up. And again, fleshing out on the Facebook group. Facebook groups are a great resources, I think. Obviously human capital, it’s our best resource whenever you use other people’s experiences and knowledge but I would also say tread with caution.

Brett Evans:                        Alert, I know what you’re about to say but, yeah.

James Ridley:                     No, tread with caution in terms of what you read there regarding a tax, financial advice, those sort of things in there because people will just say what they’ve done. They might not be an expert and it is very likely it’s not suitable for your own situation. So just treat it as a cautionary tale that just be careful what you read in there. Obviously getting set up, shopping, groceries, all those sort of things, obviously, it’s a great resource.

Brett Evans:                        Schools, exactly, it’s great. There’s no financial implications from seeking advice that way. It’s when you take tax advice or financial advice from someone who either hasn’t been caught yet and they’ve done it wrong or just is trying to help but can lead you down the path. And I guarantee when you’re at the Administrative Appeals Tribunal up against the ATO, the excuse of, “Fred Smith on the Facebook group told me so,” is not going to cut the mustard.

James Ridley:                     No, not at all. So yeah, again the main one there is just seek advice, tax advice, those sort of things from a professional rather than just going, “Oh, okay crap. Yeah, no, I’ll lodge that form on the IRS website now. I’ll just declare that because that’s what you’ve done for the last five years and you haven’t been caught yet, so you must be right.”

Brett Evans:                        And a quick plug for our Pre Departure Review. We understand that not everyone needs to go through a full financial statement advice process, which look in a perfect world everyone should because I don’t think we’ve ever that the issue of justifying our fee versus the financial benefit of getting that advice. But we understand that people may not want down that route.

Brett Evans:                        So the Pre Departure Review is a great tool for those looking at a lower price point. I’ll put a link in the show notes below that $295 you get a customised report outlining the key financial concepts you need to consider when you make that move. So like everything we do, we’re just trying to educate, educate, educate and just understand the ramifications. You don’t have to act on it but just knowing and being aware of those ramifications. The last tip because you asked for three.

James Ridley:                     I did.

Brett Evans:                        The last tip would be, be humble. You’re not in Australia anymore, it doesn’t operate the way that Australia works in any other country. So go in, don’t try and fight the system, just try and navigate it. Find out how to resolve the situation. You can really turn yourself in knots by saying, “Well, in Australia we do this.” Just keep reminding yourself, you’re not in Australia anymore, look outside. I mean, for me, I can look outside and see sand dunes so I know we’re not in Australia anymore. And that’s a big thing for me and it’s really helped me get through this.

Brett Evans:                        The timeframes that we deal with issues in Australia are quick compared to other overseas countries. So be mindful of the fact that we’re not in Australia anymore, get through the problem. You need to resolve it but do it in a way that is cognizant of where you are and you’ll certainly save yourself a lot of the stress.

James Ridley:                     Yeah, well I mean what you said before we even started this episode about the difference between yeah, send an email but you know what, you’re better off just picking up your phone and making a call because it’ll get done quicker.

Brett Evans:                        Yeah, not all cultures use the same communication tools that Australians use. So yes, emails are great but to me being based in Dubai, one of the most effective tools here and you get a quick response, is using WhatsApp. The amount of companies I talk to on WhatsApp is huge. So find the local tool that the locals use and use that, adopt it, learn it and embrace it and you’ll have a lot more stress free environment.

James Ridley:                     Yeah, and I suppose talking about the tools you just mentioned then, do you have any issues using WhatsApp or any of those sort of applications over there when you’re making calls?

Brett Evans:                        So WhatsApp in the Middle East, well particularly Dubai, WhatsApp as a text messaging platform is massive. You can actually get account balances, you can actually do banking on WhatsApp. When it comes to WhatsApp calls, right now it is banned like a lot other video conferencing tools like Skype and FaceTime and those sort of things. It came out about a month ago that there is talk that they may lift the ban on WhatsApp calls, which would be fantastic.

James Ridley:                     It would be.

Brett Evans:                        Look, a lot of expats use VPNs to navigate around it. We’re not advocating that but certainly there is different ways and means in different countries of different tools. China’s another example, they have their own rules and regulations as well. But certainly, WhatsApp for us is a very useful tool, that’s for sure.

James Ridley:                     Yeah, okay and I mean have you had to use Facebook Messenger or anything like that before? Even Facebook Messenger video because I know a lot of calls can be done like that as well? As an example, when I call my parents down in Casuarina, the reception’s terrible down there so I have to call them on Facebook Messenger just to do a check-in to see how they’re going just because they have to use the Wi-Fi. And that’s just obviously on the coast here so I can only imagine what it might be like overseas somewhere terrible.

Brett Evans:                        Look, it’s quite… Every country’s got their own nuances. So up until recently, if you bought an iPhone in Dubai, it didn’t come with FaceTime. But if you bought a phone overseas and brought it into Dubai, you can use FaceTime. So it really is mixed and people have different scenarios. We’ve heard lots of different things about for some people Spotify works here, for some people it doesn’t.

Brett Evans:                        So you always have those things and we have looked at two legacy government providers of telecoms, that’s DU and Etisalat and they set the rules. There’s no real competition here. Virgin Mobile is here but it’s a rebrand of DU. So you always make do with it, there’s an adjustment. Phone plans here are quite different. You pay per… You get so many text messages a month and that’s one of the reasons why WhatsApp is so massive here because with WhatsApp you’re using data, you’re not using text messages. So very few people use text message. That takes a while to get used to, not just wanting to send a text but using WhatsApp. But you get in with the flow with it and you find it’s a very useful tool.

James Ridley:                     Yeah, absolutely and I mean again like you said just one of those nuances when you’re an Australian expat. Brett, why don’t we wind it up there for another episode of Expat Chat. Obviously ladies and gentlemen, Merry Christmas. Have a safe and lovely Christmas and a great start to the new year. If you obviously have any further questions or anything like that, feel free to email me at [email protected] Brett, take it over to you.

Brett Evans:                        And from over in the sandpit in Dubai, Merry Christmas to everyone as well too. Yes, we do celebrate Christmas here so hopefully, that was a bit a misnomer that I can probably put to bed. But thank you to everyone through the year for following along either in video and audio and it’s something that we went quiet through the middle of the year as we were doing the relocation to Dubai. But 2020, we’re going to get loud, we’re going to get noisy and please encourage friends and colleagues who you think might be interested to come along on the journey with us as well too.

James Ridley:                     All right Brett, well we’ll leave it there. Appreciate your time. Ladies and gentlemen, we’ll see you next year and look for that webinar on the 14th of January as well.

Brett Evans:                        Merry Christmas and we look forward to touching base in the new year.

James Ridley:                     See you guys, thank you.

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