Plan Before You Take Off
Your expatriate assignment is the start of an exciting and challenging phase of your working life. Along with this excitement, comes a range of important issues and opportunities that need to be carefully considered before you depart. That’s why you need to plan for your expatriate assignment in advance.
At Strategic Wealth, we work closely with our expatriate clients to reduce the complexity of expatriate planning, and provide a roadmap that maximises wealth creation over the course of the assignment.
We know that the demands of relocation to a foreign country and removal from the usual family and social environment can be challenging, with additional stress arising from issues associated with schooling, particularly for children in the secondary phase. We offer advisers with first hand experience of life as an expatriate, who understand the issues you will face.
What to Consider
Here are some of the important issues that you should consider as part of your pre-departure planning activity.
- Develop and document your key financial and lifestyle goals to be achieved while on assignment and upon your return.
- Ensure that your personal documents are up to date including passports, birth certificates, marriage certificates, driver’s license and school records. Take a copy of these documents with you, and also leave a copy with a trusted adviser, family member or friend as a precaution in case of theft.
- Review your Will and other Estate Planning documents. If needed, we can assist you with establishing or updating these documents under our Estate Planning services.
- Decide which important documents and valuables you plan to leave in Australia and arrange for a safe place to store these items.
- Make a comprehensive list of furnishings and personal belongings for insurance purposes and arrange the shipping and storage of these goods.
- Have a complete medical and dental examination including appropriate inoculations. Make sure you take copies of your latest medical and dental records.
- Obtain an appropriate supply of your prescriptions or medicine and update your optical prescriptions as required. This will avoid the need to attend to these areas until after you settle into your assignment.
- Advise your health fund to suspend your membership and ensure that your company has arranged an appropriate level of cover for you while on assignment.
- Advise your home insurer of your movements particularly where you plan to leave the property vacant for an extended period of time.
- Develop a comprehensive understanding of your employment compensation package. Your employer may offer to compensate you under a Hypothetical Tax Equalisation arrangement. It is important that you are aware of the impact of this arrangement on your employment and personal investment earnings.
- If you are being contracted directly by the foreign affiliate, then you will need to develop an understanding of the foreign taxes applying to both your employment and personal investment earnings.
- You may receive Employee Share incentives so it is important that you understand the tax and other implications of your foreign assignment on these incentives.
- Your company should arrange the relevant work visa and permits. These are important documents and should be securely stored. Ideally, you and a nominated person should retain a copy.
- Ensure that you understand the temporary and permanent accommodation arrangements that will apply both before you depart Australia and when you arrive at your foreign destination.
- Ensure that you understand the currency and any practical aspects of managing day-to-day finances and banking. e.g. The timing of public holidays and how to operate a credit card in your destination country.
- Ensure that you understand any cultural differences in the conduct of both your personal and professional affairs to avoid any potential mishaps or embarrassment. e.g. Dress codes, ordering and consuming food and alcohol (particularly in a business forum), use of public transport, the taxi system, public telephones, photographing public buildings or being in a public place.
- Meet with your company’s tax adviser or your personal tax adviser to discuss the various implications associated with your assignment.
- Work with appropriate advisers to determine your status under the ATO regulations.
- Take a copy of important financial documents including your tax returns, bank statements, superannuation and other investment documents, and ensure that you can easily access these records.
- Review your current investments and investment structures and ensure that you understand the tax implications for these structures while on assignment. In some cases, it may be essential that you restructure some of these investment structures. e.g. .
- Consider your options relating to your opportunity to elect to pay Capital Gains Tax on existing assets at the time of departure.
- Consider the implications of your existing debt liabilities and develop an management strategy that takes advantage of your new assignment conditions.
- Arrange for the leasing and management of your
and other investment properties while on assignment. You may like to use our service to pay your bills and provide you with ongoing reporting capabilities.
Rely On an Expatriate Expert
As you can see, there are many issues to consider and attend to prior to commencing your expatriate assignment. That’s why we recommend meeting with a financial adviser who specialises in the complex area of expatriate financial planning. They will assist you to develop a comprehensive plan that addresses the key issues and maximises your wealth creation while on assignment.
Strategic Wealth is a leading advisory practice specialising in the expatriate advice area and can help you navigate your way through these and other issues. We can work directly with your other key advisers, including your company’s taxation advisers, to ensure that all aspects of your situation are considered. We can provide you with ‘peace of mind’ that you have attended to these important issues and ensure that you obtain the greatest financial reward from the opportunity to work and live overseas.
