How to move wealth between countries?

[mrsgrass]

Friends,

My family will be moving from USA to AUS shortly. We plan to be in AUS for the long term.

We have several bank accounts (Chase/Discover etc.). We also have a house, which we will be selling before we move.

a) What should we do with our American bank accounts? should we continue to use Chase/Discover while living and working in AUS? or rather, do we need to open Australian Bank accounts (not against doing this, just curious about the legalities).

b) in the event that we open Australian bank accounts, should we completely close our US bank accounts, or leave them with a very minimal amount of funds so that they can we "re-upped" upon our return to the USA?

c) what is the best way to take the $$$ we make from selling our house with us? caveat is that we wont be buying in the AUS right away, so it has to be kept somewhere that we can access quickly when we want to purchase, but wont be too impacted by inflation. what is the best mechanism for this?

Thank you all!

 

[frhi]

@mrsgrass Keep your US accounts and open a local account.

 

[shamakwa]

@frhi Just to note keeping open US bank accounts can create issues for breaking tax ties with a few of the stickier states. Check state tax implications before doing this.

 

[resjudicata]

@shamakwa Is California one of those states?

 

[shamakwa]

@resjudicata I'm not an expert by any means... but Google their safe harbor rule.

 

[resjudicata]

@shamakwa It looks like California is the worst...

 

[shamakwa]

@resjudicata I think the safe harbor rule is a big help.

 

[resjudicata]

@shamakwa It looks like it only applies if you have an 18-month contract abroad... Which is not going to be the case for me at all and it's not even a thing in Bulgaria

 

[shamakwa]

@resjudicata I'd suggest asking this on the "US expat tax questions" facebook group. Lots of people will have dealt with this.

 

[resjudicata]

@shamakwa Thank you for the suggestion

 

[iamsteve]

@mrsgrass A) If you plan to work in Aus, or even just have someone local transfer money to you at some point (e.g. splitting a bill with friends), then you will want an Aus bank account. No employer will wire your salary to your US based account. Heck, you probably need it for the ATO to file tax returns and receive rebates. I don’t know how you could live here long term and not have an Aus bank account tbh.

If working in Aus, you will also need to open a Superannuation account. By law, your employer will have to pay you Super, and if you don’t nominate one, they will usually set one up for you (potentially with high fees that burn through your Super).

B) I think this is up to you. You should be aware some banks may try to close your accounts if they discover you are no longer a US resident and you are living overseas. It will also be extremely hard for you to open any accounts in the US while living overseas.

C) I don’t know the answer here, but if you’re serious about buying, read up on the Aus property market and develop a plan for when you’d want to buy and what you’d need to do to have a deposit and qualify for a mortgage. Property prices, lending standards, interest rates… there’s lots of moving pieces to consider, depending on your budget and financial situation some of these might be of concern for you. Getting into the Aus property market for the first time is an expensive exercise.

Further to the above - consider a global currency account (e.g. Wise). And brush up on US expat tax filing obligations. You’ll be filing taxes here and in the US for as long as you live and work in Aus.

 

[neprep]

@mrsgrass The Australian property market is outrageously expensive, and if you are considering these an unintended consequence of COVID was all the cheap areas in regions are now far more expensive ... not sure when the 'bubble will burst' but at the mo its cripplingly difficult to buy

 

[micah888]

@mrsgrass If you are a US citizen or resident alien (green card holder), you’ll want to minimize non-US accounts (due to FBAR+FATCA) and avoid non-US investments (due to PFIC+FATCA+FBAR).

In case you are not aware… punitive tax laws, exorbitant reporting requirements & steep penalties for noncompliance await you. Start googling the 4 and 5 letter acronyms I mentioned and you’ll begin to understand.

 

[eee27]

@mrsgrass If you're going to work in Australia you will almost certainly need an Australian bank account in order to get paid. You could try starting with a "borderless" account from Wise or Revolut.

Note that some Australian financial institutions will refuse you as customer due to the FATCA reporting requirements. Also, remember that if a non-US contains more than US$10k equivalent that you must report it on the FBAR at the end of the year.

I would keep your US account and a credit or debit card. You will find it very useful when visiting, for paying US tax obligations if they arise, and for buying geo-restricted services (US Apple and Google accounts, HBO, Hulu, etc).

For any large sum of money (i.e. house sized), my understanding is that Interactive Brokers is the cheapest way. Wise, Currency Fair, or OFX will likely be cheaper than a bank (under 1%), but you'll still be out of pocket a few hundred for every hundred grand you move.

 

[ola2019]

@eee27 How do you use IB to transfer funds? I couldn’t find a reference.

Also for op, another options is xendpay. They give competitive rate with no fee upto a certain limit.

 

[eee27]

@ola2019 I've not done it myself, but IB provides direct access to ForEx markets. Documentation appears to be at https://www.interactivebrokers.com/en/index.php?f=47638

 

[trantrang2461]

@mrsgrass

what is the best way to take the $$$ we make from selling our house with us? caveat is that we wont be buying in the AUS right away, so it has to be kept somewhere that we can access quickly when we want to purchase, but wont be too impacted by inflation. what is the best mechanism for this?

Open an Interactive Brokerages account and put the house money in there. Normally I'd say to buy some kind of bond index fund like VBIPX but that might not be the best option at the moment, talk to a financial advisor. Once you want to buy the house, sell the shares then use IBKR to wire the money to your AUS bank. IBKR is 100% the lowest cost way to get your house money into a new house in AUS.