Alison Steed, 17:45, Wednesday 17 March 2010
In the first of a series of country guides designed specifically to address the problems faced by expatriates,Telegraph Expat takes a look at money management for those thinking of moving to, moving back from, or already living in, Australia

Australia is the number one destination for emigrating Brits , with 56,000 of us moving to the other side of the world in 2008, according to the latest official figures.

But if you are planning to go because of work, or simply in search of a better life for yourself or your family, there are a lot of things you need to think about to be sure your finances work as well as they can for you.

This guide will help you through the financial maze of what you need to do and how you need to do it to make your move a success.

BEFORE YOU GO

One of the most difficult things to do when you go to a new country is open a bank account, as you have no credit history in that country. If you open an account before you leave the UK, this circumvents the problem.

If you are already with a bank that has an international presence, such as HSBC (LSE: HSBA.L - news) , then it will be a lot easier to get an account that you can use in Australia. HSBC has just launched its Advance account in the UK.

This offers international account opening assistance, among a number of other benefits, but you do need to pay £12.95 for the privilege discounted to £6 a month for the first three months.

Plenty of other banks Lloyds, Barclays (LSE: BARC.L - news) , Halifax, NatWest have offshore arms that you can use to set up a bank account. Doing this before you go means your banking history is consistent and unbroken.

Visas

You will also need to sort your visa for Australia. If you are being sent overseas with your work, then your HR department will probably be dealing with this.

But if you are dealing with this yourself, then you have some work to do. You will need to be sponsored by an Australian employer before you can even apply for your Temporary Residence Visa. If you apply for the visa on Form 147 and the sponsorship has not been lodged, then it will be returned as invalid.

For a long-stay business visa sponsored by an employer , you would be looking at total application charges of A$675 (£405). For a permanent visa , the process is more onerous, and you are going to pay a lot more for it.

If you want to go to Australia under the General Skilled Migration scheme, you do not have to be sponsored by an employer, but you must apply for your visa in advance. Under this scheme, you would be paying A$6,035 for the Visa. There is a long list of skilled workers needed in Australia, from teachers and nurses to marine biologists, sales and marketing professionals and engineers.

However, there are a few basic requirements. You must: *Be under 45 years of age when the application is lodged and nominate an occupation from the Skilled Occupations List (SOL (Milan: SOL.MI - news) ). *Have your skills assessed as suitable for working in your nominated occupation and have been employed in an occupation on the SOL for at least 12 of the previous 24 months or have met the two-year study requirement in the last six months. *Have "competent" English or "vocational" English if you nominated a trade occupation. Source: Australian Government Department of Immigration and Citizenship

Moving

You can employ a removal company to do this for you, or you can do it yourself. The former is likely to be easier but could be more costly. Do some research and try to get some recommendations from friends or family you know who may have moved overseas before.

You have to be sure you have cleared up all of your financial affairs in the UK before you go, if you are going to be away for some time. This includes clearing loans if you can, sorting out your bank accounts and closing any you will no longer need, and telling HM Revenue & Customs (HMRC) that you are leaving the UK.

You should sell everything you do not want to take with you, such as sofas, dining tables, cars and even your property.

You may decide to rent your property out rather than sell it initially, as a back-up in case your move to Australia does not work out as you expect.

Transferring your funds

On average, a British family emigrates abroad with assets of £250,000 from the sale of a house, car and savings, according to currency specialist HiFX.

Using a high-street bank will potentially lose them around £10,000, because the banks typically charge 4 per cent more than currency specialists in unfavourable exchange rates.

Once you have sold your possessions and have your assets assembled, you need to transfer the money to the account you have set up overseas. You should check with a number of transfer specialists: HiFX, FairFx and Caxton FX are three of the main organisations.

You can set the level of your currency exchange rate ahead of your moving date if you want to, so you are not at the mercy of currency fluctuations.

For example, if you had transferred £250,000 into Australian Dollars in October 2008 when GBP/AUD peaked at around A$2.707 you would have received approximately A$676,750, according to HiFX.

Recently, however, GBP/AUD hit a 25-year low and currently is languishing around A$1.655.

As a result, today, £250,000 would only buy you A$413,750, a difference of A$263,000 purely off the back of exchange rate fluctuation.

WHEN YOU GET THERE

Finding a home

Ideally, you are wise to rent a property for a period of time when you first get to a new country, because if you find your new lifestyle does not suit you, then you have not paid out a huge amount of money to set down roots.

Renting in Australia is no different from the UK in terms of finding a property. Many are managed by agents, so you would be best starting by trawling agents in the areas you think you want to live.

Dress smartly if you want them to take you seriously first impressions last, no matter where you are in the world and you will be expected to prove that you can afford to pay the rent if you are on a low income or you are unemployed.

References from employers and previous landlords will be checked. This could be difficult and waste time if you have just arrived from the UK, so it may be worth speaking to some agents before you leave home, to try to get a foot in the door.

The amount of deposit you will be asked to pay will depend on where you are living, although generally you would pay four weeks' rent for an unfurnished property and up to six weeks for a furnished one.

You can find more information on tenancy laws here .

Healthcare

Medicare is the Australian equivalent of the NHS and, if you are staying for more than a couple of months in the country, you would be wise to apply to join.

Up to 75 per cent of the cost of private health care is also covered by Medicare, so you need to get private health insurance to cover only the last 25 per cent of any private treatment.

If you are a man aged 55 or a woman aged 51, you cannot be covered by Medicare. Retirees who are temporary residents are not covered by it either, so the only option is private health insurance. However, there are rebates available of up to 35 per cent for those over 65 and 40 per cent for those over 70 of the private medical insurance cost for those who are eligible.

For more information on healthcare, click here .

Bank accounts

If you do not deal with your bank account until you get to Australia, you may not be able to prove your banking history in the UK so easily, and not having an account could be very difficult. You may be able to get an account, but you are likely to struggle to get the best deal.

If you fail to sort your account before you leave the UK, you can open an account in your first six weeks in Australia with just your passport. Otherwise you will need additional information, just like in the UK, to prove who you are and where you live.

The UK current account equivalent in Australia is called a "transaction account" and you get the same facilities as the UK: an ATM card, cheque book, EFTPOS card this is the PIN card that you can use in shops and you can use it for direct debits and may also have an overdraft.

Tax

The Australian tax regime is similar to that in the UK, although there are a few specific things you need to know.

Pay-As-You-Go (PAYG) is the equivalent of the UK's PAYE income tax system and is applied to employees.

The income tax year in Australia runs from July 1 to June 30. Australia has a double-taxation agreement with the UK, so if you are taxed in the UK on a proportion of your income, you will not be taxed again on this in Australia.

Non-residents in Australia are taxed only on their income generated in Australia, while residents are taxed on their worldwide income. But you become resident in Australia if you normally reside there, spend at least 183 days of the financial year there, or have no permanent abode outside the country.

See (0491.HK - news) the box (below) for current tax rates. You can use a simple tax calculator to work out what you might pay in tax, which is also available on the Australian Tax Office (ATO) website .

There are some tax offsets available in certain circumstances, and while they will not give you tax credits in the same way as the UK, you may get rebates sufficient to reduce your tax to zero.

Four tax offsets will give you a refunded amount: the private health insurance rebate, franking tax offset, baby bonus and the education expenses tax offset.

For residents for 2009-10: Taxable income Tax on this income $1 $6,000 Nil $6,001 $35,000 15c for each $1 over $6,000 $35,001 $80,000 $4,350 plus 30c for each $1 over $35,000 $80,001 $180,000 $17,850 plus 38c for each $1 over $80,000 $180,001 and over $55,850 plus 45c for each $1 over $180,000

For non-residents for 2009-10 $0 $35,000 29c for each $1 $35,001 $80,000 $10,150 plus 30c for each $1 over $35,000 $80,001 $180,000 $23,650 plus 38c for each $1 over $80,000 $180,001 and over $61,650 plus 45c for each $1 over $180,000 Source: Australian Tax Office

Accounts

If you are paid interest on an account in Australia, non-residents will face a 10 per cent withholding tax. As a resident, any interest paid on accounts is included in your assessable income, so you would declare it on your self-assessment return.

The one exemption which is tax-free interest is any paid on a first-home saver account.

Pensions

The pension system in Australia for British expats is not simple, and has been furthercomplicated since the governments of Australia and Britain terminated the Social Security Agreement between the two countries on March 1 2001.

Anyone who is entitled to a UK state pension will not have their pension payment "up-rated" in line with inflation; it will be paid at the rate it was at when they left the UK.

This freezing of pensions in Commonwealth countries has been challenged, but as yet the Government has won all of the rulings.

People arriving after March 1 2001 may be entitled to some Australian pension, but you would not be considered for this until you have achieved at least 10 years of residency in Australia. More information is available here .

If you want to transfer a UK pension scheme to Australia, then you can do this through the Qualifying Recognised Overseas Pension Scheme (QROPS) regime.

This is a system under HMRC rules where agreed schemes can accept your UK pension, without penalty from HMRC. A list of many of the Australian companies that qualify for this status is available at the HMRC website .

RETURNING HOME

There are a lot of things to think about before you return to the UK, and you will have to repeat some of the things you did before you left to make the move in reverse.

You should: *Clear any tax liabilities you may have in Australia before you leave the country. *Clear any outstanding loans and sell anything you do not want to take with you. *Have your Australian medical records sent back to the UK and let your local doctor/dentist know that you are moving away. *Get an international removal company to deal with your move or, again, do it yourself if you prefer. *Speak to an adviser who specialises in international moves to make sure you do not pay any unnecessary taxes. *Tell HMRC you are returning to the UK; the service will tell you if there are any additional benefits you can get through tax credits, so remember to ask for them. *Let the Department for Work and Pensions know about your move; it, too, will tell you about any other benefits you may be entitled to on your return. *Transfer your money back to the UK in the most cost-effective way. This is usually through a currency exchange specialist.