An Expat’s Guide to Relocation to Australia
Australia has become a favoured destination for UK expats seeking a new place to call home. With an estimated 1.2 million Brits already enjoying life down under, the appeal is undeniable.
This beautiful land offers a combination of sunny weather, friendly locals, a high quality of life and low crime rates. In fact, it earned a place in the top 10 happiest countries of 2024, according to the World Happiness Report.
With a strong international community, cultural similarities to the UK and lack of language barrier, it's easy for expatriates to integrate into a new life here.
This vast and diverse country offers so much to see and explore, and with a world-class healthcare system and an ideal lifestyle for retirees, Australia stands out as an ideal place for British expats seeking a fresh start.
Article Summary
01 Expats in Australia: Visa Requirements
Having earned its status as a highly desirable destination for expats, Australia has implemented strict visa requirements. The country operates a complex immigration system, and the visa application process can be lengthy and challenging.
To navigate these complexities and to ensure you are applying for the correct visa, it's best to seek advice from a visa agent or immigration specialist.
02 Retiring in Australia
Unfortunately, Australia closed its Investor Retirement Visa program to new applicants in 2023. However, there are still some visa pathways available for those looking to make the move.
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If you have family or a partner already living in the country, you may qualify for one of the visas listed here on the Australian Home Affairs website.
Otherwise, options such as the Business Innovation and Investment visa or the Investor visa may be available.
Life in Australia can be ideal for retirees, with access to stunning beaches, national parks and an abundance of natural landscapes. However, it's important to be aware that the cost of living is estimated to be 9.2% higher than the UK in 2024, so be sure to budget accordingly.
03 Working in Australia
Known for having excellent career opportunities, Australia offers visas to skilled foreign workers to fill roles in specific employment sectors. The Australian Skilled Occupation List outlines which individuals may be eligible to apply for a visa. In some cases, a sponsorship from an Australian employer may be required.
As the average salary in Australia is almost 20% higher than in the UK, this could be a financially rewarding move for qualifying individuals.
04 Paying Tax in Australia
Australia’s tax year runs from the 1st of July to the 30th of June, and residents are taxed on their worldwide income. You will generally be considered a tax resident of Australia if you are present in the country for 6 months or more of a tax year (whether continuously or with breaks).
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However, there are exemptions for individuals who maintain a qualifying ‘usual place of abode’ outside of Australia and have no intention of becoming a permanent resident.
To determine your tax residency status, the Australian Government has a few tests available here
Non-residents are taxed on all Australian-sourced income, while qualifying ‘temporary residents’ may have exemptions available on certain types of foreign-sourced income, such as investment income and capital gains made from assets that do not qualify as taxable Australian property (TAP).
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Income Tax
As an expat in Australia, it's crucial to seek advice to understand exactly how much income tax you will need to pay, and to avoid any unwanted penalties or fines.
The country offers a Low-Income Tax Offset (LITO), which allows residents to earn up to $22,575 before any income tax is due. There is also a tax-free threshold of $18,200, although this may be reduced if you spend fewer than 12 months in the country in a single tax year.
In addition to income tax, a 2% Medicare levy is charged to fund the state healthcare system (a relief of which may be available for certain low-income earners, or those who are not eligible to use the Medicare service).
The 2024/2025 income tax bands are as follows:
06 Capital Gains
In Australia, capital gains - profits made from the sale of assets such as property, shares or investments - are included in an individual’s taxable income at the applicable marginal rates.
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However, there are some reliefs and exemptions available in some circumstances. For example, if you have held an asset for more than a year before selling it, you may qualify for a 50% tax reduction on the gain.
Additionally, exemptions apply when you are selling your primary home, if it was never used as a rental property.
07 Land Tax
Land tax in Australia applies to the value of any land that you own, including investment properties, commercial properties, holiday homes and vacant land. However, your primary residence and any land used for farming and agricultural purposes are typically exempt.
The rates for land tax vary from state to state, and the amount payable is calculated annually by your local state or territory revenue office.
08 Inheritance Tax
There are no inheritance or estate taxes in Australia. However, tax obligations may apply to assets you inherit, such as capital gains or land tax.
09 Can I Transfer My UK Pension to Australia?
Leaving your existing pension in the UK can expose you to currency risk when converting from GBP to AUD, as well as potential taxes in Australia.
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Suppose you’re considering transferring a private pension to Australia. In that case, you’ll need to do so through an Australian Superannuation Fund (the Australian equivalent of a UK pension), which is classified as a QROPS (Qualifying Recognised Overseas Pension Scheme). This option is only available to those over the age of 55 and can have significant tax implications and may be expensive.
We usually advise British expats who intend to become Australian residents to transfer their existing pensions to an International SIPP (Self invested personal pension), which is a pension product designed specifically for UK expats.
As this is a pension scheme that will remain in the UK, you will still retain all the benefits of a UK pension, as well as the security and protection of UK regulators. An international SIPP will allow you to make multi-currency withdrawals and comes with a wide range of investment opportunities to grow your retirement funds over the long-term.
The Wealth Genesis has helped many UK expats moving to Australia with their pensions. To discover how we could help you, book a call with us today
10 Healthcare in Australia
Australia is renowned for its exceptional medical care, and according to the World Healthcare Index 2024 from CEOWorld, it ranks as the third-best healthcare system on the planet.
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The public healthcare system, known as Medicare, is available to all citizens and residents and is funded by the Medicare Levy, which is a 2% additional tax on income for most residents.
Whilst Medicare provides comprehensive coverage, it does not cover all medical expenses – dental care and ambulance services in some states may require additional payment. As a result, most residents choose to supplement their medical coverage with private health insurance.
Australia has a wide range of private healthcare providers, each with different insurance options, more information can be found here.
11 Advice for UK Expats Moving to Australia
Overall, Australia is an exceptional choice for British expats looking to retire or relocate abroad. However, with the complex visa and tax laws, it's essential to seek professional advice to protect your wealth when moving.