An increasing number of Australians are choosing to live and work overseas, gaining experience in fields such as mining, engineering, healthcare, finance and education. However, an often forgotten part of the expat lifestyle is what to do with current investments in Australia, or how to invest back home in preparation for an eventual return. This should be addressed early on in the expat experience, but unfortunately, many expats don’t address it until their return is imminent.

The Benefits of Investing in Australia while Offshore

Given many expat Aussies are paid in foreign currencies while offshore, the benefit of investing back in Australia has increased significantly, with the decrease in the A$ from $1.10 to the US$ back in 2012, to approximately $0.75 today. Essentially, this means that your purchasing power has increased by 33%, and investing back home to increase savings or plan for retirement, has been given a terrific boost.

The portfolio management team at Elston run a specific non-resident Individually Managed Account, designed to assist investors looking to build and maintain an asset base in Australia, while working offshore. This allows clients to tailor assets to suit their individual needs. This is a great benefit for those who are restricted from buying or selling shares in the company they currently work for or advise.

Upon return to Australia, the Individually Managed Account can continue without the need to sell-down all the assets and start again. Care does need to be taken with regard to existing shares upon leaving Australia, and again upon return, particularly in regard to the tax declaration made by the investor at time of departure and return. It is therefore vital that specialist advice is sought before a decision is made.

What are the tax implications?

As a non-resident, it’s important to consider the taxable nature of investment income and gains on various assets held in Australia. For example, when deciding between investing in property or shares, they have very different tax statuses. Shares held by non-resident Australians are exempt from capital gains tax, but an investment property held in Australia is subject to capital gains. In addition, as of 8 May 2012, the Australian Taxation Office has removed the 50% exemption on capital gains made by foreign residents on taxable property. Again, advice should be sought before leaving Australia to work overseas, and when planning to return.

Looking to migrate to Australia?

Elston also advises non-residents looking to migrate and retire in Australia. Working with offshore advisers, the Strategy Team can assist in a successful transition of retirement funds (ROPS – Recognised Overseas Pension Schemes, formerly QROPS), either into the Australian Superannuation system, or advise how best to use these assets personally.

This is a highly specialised area, and Elston is fortunate that Strategy Team member, Ben Greenwell, has extensive UK experience. We will also work with existing offshore advisers, who can continue to manage assets held in other locales.

To better understand your options, speak to your Elston adviser.

If you would like more information, please call 1300 ELSTON or email info@elston.com.au and an adviser will be in touch.