The exchange rate for Australian dollars to British Pounds
Sterling has enjoyed steady growth over the last decade as the Australian
economy has thrived. This has made the UK a comparatively cheaper place to go
for a few months abroad, and has created a boom in Australian tourist dollars
being brought to bear on the UK economy.
At the same time, this growth in the relative strength of
the Australian currency has historically encouraged UK nationals to head to
Australia in pursuit of profits, where large salaries have offered an
opportunity to sidestep the financial woes of the UK.
This trend UK has caused many Australians who had previously
emigrated to the UK to return home, with Britain floundering whilst Australia
boomed. The rate at which the Australian population of the UK declined over the
financial crisis sharply increased, jumping over 50% from 2005 to 2008,
reflecting its impact on how lucrative a working destination the UK is for
However, recently things have changed. The UK economy is now
starting to bounce back, with good growth forecasts sending the value of the
pound skywards. The trend of the last decade has shown a dramatic reverse since
April 2013, with the value of the Pound against the Australian dollar increasing
rapidly, now at its highest point since the final quarter of 2009.
This has led to an exact inversion of the previous
situation. Now, it is the rate at which British expats are leaving Australia which
is reaching new highs, with net immigration from the UK dropping. The biggest
demographics for immigration growth in Australia are coming from Asia and
For many young Australians, vacationing in UK has become
more expensive, whilst sending money home is becoming potentially more
What this means is that we are gradually seeing a reversal
of the traditional movement between these two countries, with Australians once
again starting to think of the UK as a better deal for long term living.
None of this changes the fact that some parts of the UK have
the most expensive house prices on planet earth, with London second only to
Monaco as the most expensive place to buy property. It’s unlikely that an Australian
national will be able to convert their equity into enough cold hard cash to
purchase an equally sized dwelling in the UK. Tax can also be prohibitive when
a major sale, transfer and purchase are considered. You will generally have to sell up in the
first 6 years to avoid substantial capital gains tax.
Therefore, a good option for Australian expats is to live
and work in the UK before returning back to Australia before retirement. The UK
is a great destination for this arrangement as you can transfer company pension
contributions to your Australian superannuation to ensure that your nest egg
continues to grow whilst you’re away. Renting out your home can be an excellent
way of ensuring regular income in addition to whatever money you earn whilst working
in the UK.
Australian tax rules do not allow you to transfer your
Australian superannuation to any overseas pension fund (apart from New
Zealand.) The only exception to this is if you are aged 55-65 and can satisfy
conditions of release. There are some circumstances which can allow for early
release relating to incapacity, terminal medical conditions, and terminating
gainful employment. The Australian Tax Office has more information about conditions
of early release.
However, the UK is one of the locations where this does work
the other way around; as long as your UK pension qualifies as a Qualifying
Recognised Overseas Pension Scheme (QROPS), you will be able to transfer your
pension contributions back to your Australian equivalent. You will still pay
tax on this, but as the UK and Australia have double taxation relief agreement
you will be prevented from paying tax in both countries.
It is best to ensure that you know ahead of time whether an
employer’s pension scheme (or private pension) qualifies as a QROPS. A list of such schemes
is available here.
Note that as a UK resident you will be liable to pay tax on
letting revenue. The UK revenue and customs service have resources to help
discover how much tax you will have to pay on lets. They
publish a PDF on this which is available here.
When it comes to letting property in Australia as a UK resident,
the actual transfer of your letting income can prove to be prohibitively
costly. Xendpay’s money transfer options will be significantly cheaper than any
high-street bank, and over the long term, savings to be gained from using FX
services instead of banks are astronomical. This is one of the simplest things
that can be done to slash the costs associated with letting a property abroad whilst
you live in the UK.
As well as offering far better rates of exchange, money
transfers to Australia through FX services have far lower transfer fees. With
banks, you can wait as much as 4 working days for transactions to take place. As
an alternative, money sending bureaus don’t suffer from such time constraints,
and even offer online options, but their costs tend to be even more prohibitive
than the banks.
To transfer Money
to Australia from the UK, Xendpay offer fees as low as just £3.99. We’re
confident that we’ll offer the best and most convenient deal around.