Austro are straightforward to deal with. If your EASA Class 1 is going to be there, you've got the option of applying for your EASA licence with them or transferring your medical records to another Member State (most use Ireland or Malta) then applying to that State for your EASA licence. I've always found the IAA responsive and professional, been with them since 2017.
Once you hold both medicals, you can revalidate them with one trip to the AME as long as the AME holds both approvals. Some charge less than full price for the second medical to cover the admin. You can use an AME approved by any Member State, mine holds Transport Malta approval and sends the report to the IAA each year.
To answer your questions:
1. Are we currently allowed to hold both licences?
Yes
2. Sounds easy enough for ground exams - presume I just take the exam twice as syllabus is the same?
Yes, make sure your groundschool provider holds both approvals. The big ones like Bristol Groundschool do.
3. My PPL is CAA issued - do I need to get one under EAS too before CPL?
No, all that's needed is an ICAO compliant PPL. An FAA one would do!
4. When undertaking CPL, MEP, IR would it be the case of doing the skills test twice under a different examiner (or an examiner who is accredited for both).
I've not seen this question answered in writing by any Aviation Authority, but if the examiner holds both approvals I think you'd be OK with one skill test and two sets of paperwork (not dissimilar to what the AMEs do).
