Wealthy Expats won't find it alluring

[N2O]

Wealthy Expats won't find it alluring
Fleur Anderson, The Australian Financial Review, Thursday 7th September 2006, Page 7


New superannuation rules starting next year could discourage wealthy expatriates from returning to Australia.
Treasurer Peter Costello revealed on Tuesday, the final details of the government's super overhaul, which promises to remove tax on benefits for those aged 60 or over.
The tax cut is accompanied by new annual limits on the money people can contribute, capping pretax contributions to super at $50,000 a year and post-tax contributions at $150,000 a year or $450,000 over three years.
Grant Thornton director of taxation services John Ross said the rules would affect wealthy immigrants or expatriates wanting to live in Australia and transfer retirement savings into local super accounts.
"Transferring from overseas super funds will see capital in excess of $1 million before 1 July 2007, or $450,000 after that date, being subject to tax at the top marginal rate" Mr Ross said.
The rules could discourage highly skilled or wealthy people from moving to Australia, he said, particularly once the transitional arrangements disappeared, so that people could transfer only $450,000 in after tax contributions to their retirements savings once every three years.
Under the government's transition arrangement, people will have until 30 June 2007, to put up to $1 million in after-tax contributions into their super fund without being hit by the extra tax.
An amount in excess of the contribution limits would be taxed at the highest marginal rate of 45 per cent.
Under the transitional arrangements, those 50 and over would have up to five years to contribute up to $100,000 a year in pretax contributions.
However, Mr Ross said this would be barely enough to catch up since people 50 and over did not enjoy the full benefit of compulsory super, which was introduced in 1992.
Opposition leader Kim Beazley yesterday gave his qualified support for the plan as long as long as the government could guarantee the changes were affordable.
The final details of the package showed the preliminary cost of the reforms had increased by $1 billion to $7.2 Billion over four years.
"We note that the cost has already blown out by $1 billion since the budget in May - this vindicates our caution about the total cost of the package," Mr Beazley said. "We support these changes in principle, subject to the final details in the legislation."
Under the rules, owners of small businesses will have to have owned their business for at least 15 years before being permitted to tip the proceeds of the sale into a super fund.
Council of Small Business Organizations of Australia chief executive Tony Stevens noted some small business owners would have to wait before selling their businesses to retire.
"Not everyone has $1 million at hand, but small business owners who have, or are in the process of selling their business, can take advantage of this, giving them a tax free bonus not previously available", Mr Stevens said.
"The minimum 15-year limit of owning a business before you can invest your funds from the sale will mean some business owners who have yet to have their business for that long may hold on and stay the business until that limit has been reached."

[qcc2]

to aviation is????:rolleyes:

[404 Titan]

qcc2

The relevance is there are plenty of expatriate pilots who read this forum who now may just decide to live somewhere else in our retirement for exactly the same reason or one of the reasons we left in the first place, the extremely high taxation in Australia compared to the rest of the world.

[lowerlobe]

There is also the angle that Darth may not get as many pilots from the sand box and HKG as he would like to fly for J* because of the changes.

[Elroy Jettson]

May "Discourage"??? They are deluded! Put your hand up if you have ever felt encouraged to join one of the highest taxed schemes on earth! Most of those who leave cite the ATO as a contributing reason for going. Govt Morons think that until now , it has been financially attractive to return? Mc Fly!!!

[N2O]

Company docks pay after overtime ban

September 07, 2006

AN electrical parts manufacturer has docked its workers a week's pay because they banned overtime as part of an enterprise bargaining campaign, ACTU president Sharan Burrow says.


Ms Burrow said today the action by Heinemann Electric, in Melbourne's south-east, fell within current Federal industrial relations laws.
But it was a "monstrous interpretation" of the law, she said.
Ms Burrow said 56 workers, members of the Electrical Trades Union, had been unpaid for a week's work after they banned extra overtime to support their enterprise bargaining campaign.
"Under the Industrial Relations Act they cannot place a simple overtime ban to put gentle pressure on the boss for an outcome," Ms Burrow said.
Under the law, the workers had to take full strike action.
"Who does that support? The boss? No, because they are getting no work out. Does it help the workers? No, because they do not have any means to apply subtle industrial pressure.
"These men have worked for five days for no pay. If (Workplace Relations Minister) Kevin Andrews thinks that that is fair, he has a whole other level of morality.
"Let's see what the minister says, if he thinks it's fair for workers to work for five days with no pay."
Ms Burrow urged the company to pay the workers and return to the bargaining table.
Heinemann Australia manufactures and distributes circuit breakers and circuit breaker switchboards.
The company's managing director, Richard Ross, has been approached for comment.
link
http://www.theaustralian.news.com.au/story/0,20867,20368400-1702,00.html

[oldhasbeen]

Is this the same government that is " voting" to restore their super benefits to pre 2004 levels?? God bless 'em:mad:

[Fliegenmong]

AND a 7% pay rise - pushed through late on a Friday night, clearly embarrased about it.

[ShockWave]

I don't understand:confused:
Does the gov want people to contribute more to Super or not?
If the aim is to stop people from relying on the pension in retirement, then why make it so damm confusing, complicated and restrictive.
If I have any money left when I retire, I certainly won't be bringing it back to Oz so they can Tax me on it at the top tax rate:ugh:

[international hog driver]

Your right I dont.

After not voting several times, and able to prove I was operating crew o/s each time. The government removed me from the electoral role.

After being audited because I was working o/s and sending money back home in a country that has no tax agreement with Aus, they could not tax me directly. The governement decleard me a non-resident for tax purposes..... solely so i could not clame the tax free threashold on my Australian Investment income.... what did they make a whole A$700 extra p/a!

I own property and have investments back in Oz but for me to face taxation on bring my funds back into the country so I can support myself without and government help ...its a joke. Or am I just funding their retirement not mine.

Word of the wise, if you are earning it o/s.keep it o/s and when or if you plan to come back and retire like i do, then live off your credit or debit card connected to your o/s funds.

They will trace it like any other international transfer over Au$9980.00 but if you can prove that you have been o/s for any resaonable length of time then then Canberra has no recourse.

Just remember to get your passport stamped each and every time you enter and leave the country. Stampy at immigration will not normally stamp your passport these days but they will if you ask.

Why because it has helped the judiciary throw out several cases against expats I know.

[precession]

International Hog,

Totally agree with what you have said, I have worked in both the UK & OZ finance industries, and a more convoluted and unfair tax regieme than here in OZ I have yet to encounter (I know the US one is bad, but it can;t be as bad as here or as obviously skewed in terms of those who have friends in err......)

Careful with the debit/credit cards tho', the ATO (and there are legions of the sob's ) are interested in the usage of overseas cc's and dc's by aus citizens, which leads me to ask , why don't the tax all the overseas first timers when emigrating here with a ute full of readies ?

The good thing about OZ, is that you can sail as close to the wind as you like with comparison to european tax law, and still look like mother theresa compared to most aussie businessmen!

I have been advised by my accountant to buy a new car to save tax , how does that work then, when the old one is just fine ?????? some tax system eh ?

The only other solution is to get dual ressie status, *and* keep your investments overseas.

[international hog driver]

Good Ideas however there are some better answers.

Dual ressie status is a no go as the European country I am in does not allow dual ressie with Oz.... stupid i know. I can go to the UK and use my Medicare card (I pay my Tax in oz on income earnt there, dont worry). But here If I want a passport I have to give up the Emu & Roo.... sorry thanks but no thanks.

As I have been o/s for the past 10 years, using my o/s credit card is the only way, they can bitch and moan all they want in Canberra but if there is no tax agreement between your country of residence and your country of citizenship then thats their problem not mine.

Better still if you meet the 183 day rule and then when you get audited again you show them their own paperwork which removed you from the electoral role and declared you a non resident for tax purposes.

I was given notice of Audit and returned to Oz, (tax deduction too as i came to inspect my investment property). The Inspector plus two cronies had volumes of documents and I sat their with my accountant and a manila folder.

They started their preliminary speil, blah blah blah, regulation, regulation, you have done this and that and do you have anything to say.

Open folder show them their own document stating above declration and removal and passport.

The lead auditor sat back closed his folder, actually said "thank you very much, we'll be in contact."

That was two years ago and I have not heard peep since.

If they want to stop me then they have to ban every foreign credit card in Aus..... highly unlikely.

I feel sorry for the yanks I have worked with in the past who have not only paid local taxes but also on what ever they earnt outside of the US when working for a US firm.

If you can, have yourself removed from the electoral role and the be declared a non resident for tax purposes, as in individual it worked well for me as I only had to pay tax on the first 5k which as a resident you dont, so even at 20% is only A$1K. bugger all really.

If however you are an Aussie trading as a business name (invoiceable) in your contracts o/s and have to keep your Aus licence valid, medical, CIR, rateing etc current and then claim that as a deduction for the up keep of professional qualifications you may find yourself at the rough end of the pineapple!

Just remember, if its more than 7 years old...... schred it

It was not me, I did not do it, you cant prove a thing,...... thanks Bart I owe you one!

[mills cross]

Hog thanks for your posts I am also overseas and have been for several years. I am thinking of taking a commuting contract and basing myself for the time off back in oz and I am curious if you could shed a little more light on this 183 day rule you spoke about and how it applies. I was looking at the website for the oz tax office and it was talking about a 1 in 6 rule for evaluating if you were a resident for tax purposes. Is this this a new rule with the 183 day rule now null and void at some previous date or is there some thing else I should know. Just curious on your thoughts as the contract time at home would be about 30%, more than 1 in 6 but less than 183 days a year.

[international hog driver]

Dont know about the 1 in 6.

Enlighten me and our avid readers.

Last I knew it was 183 out of the country, most fellas i knew on equal time contracts would have the Mrs & Kids come meet them o/s on a holiday once (or more) times a year just to make sure.

For the Brits I under stand that there was another clause that sead they had to spend either 8 or 12 out of the country continously.

1 in 6 is there a link you can post.

[mills cross]

Just had another look at the www.ato,gov.au (http://www.ato,gov.au) and found the bit I read before with the 1 in 6 rule. It is regarding foreign earnings If you are a resident for tax purposes. It was at www.ato.gov.au/individuals/content.asp?doc=/content/28908.htm (http://www.ato.gov.au/individuals/content.asp?doc=/content/28908.htm) Then found the 183 day rule regarding residency that you spoke about which got my interest and hopes up as say 10 days back a month on a commuting contract would at first appear ok until I dug a liitle deeper. Assuming the tax office will get the money if at all possible It appears a few points regarding domicile would be a cause for concern. Point 1 must have a permanent home/dwelling overseas so hoteling it between night stops would not be sufficient, easily fixed rent a place. Point 2 moving from country to country overseas does not define residing there. And most disturbing Point 3 Your domicile is where you sleep with your family which gives me the impression that if your family are in oz and and you visit and sleep there with them in the same house they can interpret that as being your country of residence and tax you accordingly even if you are away less than 183 days a year. I must say I am not an expert or authority on this just getting an impression from what I have been reading and would welcome anybodies thoughts on this from anybody who is more experienced in the matter

[relax737]

mills cross, don't listen to the bush lawyers here. Go and pay for some decent advice, from two different sources, get it in writing and then if there's a problem you can hold them to it.

People see and try to interpret what they hear to fit their own circumstances.

[blueside^]

mills cross I would suggest having a look at http://www.majenda.com

[cunningham]

Super money will be tax free for those over 60 from July 1 2007. (still a proposal at this stage)

I'd say this would be a big carrot for some to come home who already have a nice little pot here.

Yes we do get taxed a hell of a lot in this country but this is because we are by far the most generous/ stupid in the world when it comes to welfare.

I still reckon Oz is the best place to live on this planet !!:ok:

[Wiley]

There's a sting in the tail under the new scheme, at least for expats, cunningham. If they don't have a little 'nest egg' already in place, (which is the situation many are in), they can't set up a self-funded super scheme before they return and become residents, and when they do, they'll only be able to put a maximum of $150,000 a year into any such scheme. The rest of any funds they have will be left outside super where the ATO can and will take its cut.

No one's spared a thought for returning expats, but a lot of the money men are concerned about the effect this will have on very wealthy Asians who might want to retire in Australia. They see their brokerage fees for handling these (right sort of) economic immigrants' considerable funds disappearing.

[blueside^]

Wiley $150,000 per year as a contribution to super is true, but your spouse (if you have one) is also permitted the same, so that would total $300,000 Also up to the 30th June 2007 (the end of this financial year) a contribution of $1,000,000 is permitted and if you are married that would be $2,000,000. After this date, if you are returning to Oz you are permitted to contribute 3 years of contribution, without paying tax, so that would mean $450,000 and if you are married $900,000.

So there is time to put the nest egg in place.

Have a look at http://www.majenda.com/html/s02_article/article_view.asp?id=179&nav_cat_id=210&nav_top_id=78 for a more succinct explanation.

Bytheway, Cunningham this is no longer a proposal.

[Gnadenburg]

It's sad to see poorly strucutured expats, repatriate with so much lost opportunity. Pay for the expertise. H & R block won't cut it. Ten grand of taxation lawyers and accountants professional advice, per million you bring home, is a good start.

If super is your vehicle, they are already on to it. Latest I've heard is some sort of shuffle, repatriate as a non resident, sell up the assets you need to, forming a super trust, live on the beach abroad for another six months, and come home with all in place. Not neccessarily in that order! Pay for the advice!


PAF

Repatriation of expatriate wealth and skills, should have a welcoming government policy.

There are near a million Australians working abroad, from all vocational backgrounds, including the areas government is concerned of shortages.Most would be looking to repatriate a million plus per head ( at least ). Certainly help ,prop up an economy that digs holes and sells over priced real estae to each other. :}

Except, of course, the fools that work overseas for the China experience. Helping to transfer massive amounts of intellectual property, at no cost, to a future competitor, whilst drawing on meagre savings.

[Wiley]

I'm sure someone will correct me if I'm wrong, but I understand that the killer is you have to be a resident to take advantage of the 'one off' $1,000,000 contribution between 10 May and 30 Jun 2007, at least to put it into a self-funded scheme.

For those with more than eight months to go to retirement and whose assets are largely tied up in company provident funds etc that can't be cashed in until their retirement, this 'one off' million dollar concession by the government is meaningless.

As has been stated above, a single man can't put any more than $450,000 into super upon his return to Australia (or a married couple, $900,000) and then nothing more for three years. Anything else he or they bring back will be taxed. I know many would be very happy to have half that amount in super, but basically, this means that those who have invested wisely (or not lived the high life so they will be comfortable in retirement), will be penalised.

I can't help but think that this is yet another of those "unforeseen circumstances" so beloved of Paul Keating when he had this mitts on the federal pursetrings.

[blueside^]

Wiley there are always ways and means :mad: . To setup a SMSF you only need a resident Australian to have 51% of it, such as your wife or children. However you can still place the 1 million in other forms of Super other than a SMSF and be a non resident.

If you are retiring in February 2007, 8 months after the financial year deadline and your money is tied up in a company scheme then consider borrowing the money for the short term. Better than that speak to a professional :8 like I have done, because they will sort the problem out for you.

[404 Titan]

blueside^

Borrow the money? You have got to be f*****g kidding. I may as well drop my daks and expose myself to the elements. If that is what your financial adviser is advising you I suggest you change advisers.

I have the right to live in a number of countries because of birth right how long I have lived and worked in a country and marriage. Most Asian counties that I would like to live in have an open door policy to wealthy expats in retirement and won’t tax me to death.

If the Australian government thinks for one minute they will see one cent of my retirement money think again. I will retire else where, where governments reward people who have worked hard to provide for themselves in retirement, not tax them to death and let those on the old age pensioner bludge off the rest of society because they didn’t plan for retirement. My wife and I will keep our house on the beach in Sydney and continue to live as expats abroad, only coming down for less than six months of the year to maintain our non-residency status. If the government change the rules then I will adapt. Push me into a corner and I will sell everything in Australia and take it all abroad. So my advice to the Australian government is you have been warned. There are many expats like me who will drop Australia like a hot potato if you back us into a corner. Then you won’t see anything, not even GST revenue.

[410]

Someone could confirm this, but I've been told by a friend who has just retired to Australia and decided to remain a non-resident much as 404Titan has because he tells me that if you put your money into an Australian super fund and then make one of the many errors in managing it that the ATO deems you might make in their incredibly complex tax syatem, they will impose a 45% penalty on you - ie, take almost half your retirement money and you get no say in the matter. The decision on whether you have erred or not is the ATO's and they can take the money straight out of your fund without you having any say in the matter.

Is it any wonder people like 404Titan decide to stay offshore.

[Metro man]

[QUOTE]If the Australian government thinks for one minute they will see one cent of my retirement money think again. I will retire else where, where governments reward people who have worked hard to provide for themselves in retirement, not tax them to death and let those on the old age pensioner bludge off the rest of society because they did’t plan for retirement. My wife and I will keep our house on the beach in Sydney and continue to live as expats abroad, only coming down for less than six months of the year to maintain our non-residency status. If the government change the rules then I will adapt. Push me into a corner and I will sell everything in Australia and take it all abroad. So my advice to the Australian government is you have been warned. There are many expats like me who will drop Australia like a hot potato if you back us into a corner. Then you won’t see anything, not even GST revenue. [/QUOTE

Agree entirely, Oz is a nice place but the demands of the ATO for living there are just not worth it. South Island NZ looking better all the time, < six months there and six months in Asia, with a couple of short visits to Oz each year, sounds great. Where I am at the moment I can save without being taxed left right and centre. On +AU$100 000/ year I'm paying 8% income tax and get good value for it. If Canberra stopped squandering money on welfare, foreign aid and a ridiculously large bureaucracy they could tax in a similar manner and attract some talent back home, that may not have left in the first place.

[blueside^]

404 Titan

My Financial Advisor :8 didn’t propose the borrowing concept; in fact he had the same impression as you. That idea was published in the Australian Financial Review Smart Investor September issue. http://www.afrsmartinvestor.com.au

Good luck commuting.

[404 Titan]

blueside^

Smart investors don’t follow the advice of a rag paper, especially the Australian Financial Review. There are too many vested interests for my liking in that piece of toilet paper.:yuk:

[MBA747]

New Zealand sounds like a good idea.

[relax737]

404 Titan, you sound like a very negative chappie; a refugee from the 89 thing perhaps?:*
I find those with such a negative slant on everything from Australia to newspapers to financial advisers are usually in that group.:*
I've lived in five different countries, three in Asia, and visited forty on holidays over many years, and even with what may be termed an unfavourable taxation regime, Australia is still the best country, bar none.:8 :ok:

[Gnadenburg]

It makes me shudder, poorly structured expats, who end up having to retire in developing Asian nations to beat the taxman.

There are so many ways around it. But you need to pay for the expertise.

With taxation losses perpetual, share market gains tax free, how can a non-resident not happily retire comfortably in Oz?


You borrow 100% for a 500,000 AUD property ( easy abroad ). You rake up 30K tax credit annually- negative gearing, depreciation, visits home for inspection etc. Interest only strucuture on the loan, with the cashflow you would traditionally use to pay off the principal, freed up to put money in to the sharemarket. After a decade abroad, you have a 300K taxation credit, a share market portfolio that is not far from the original value of the property. The most basic of structures.

[404 Titan]

relax737
404 Titan, you sound like a very negative chappie; a refugee from the 89 thing perhaps?
No, I’m just shrewd with my money. I only had a PPL in 1989 so no wasn’t involved in the 1989 dispute. I didn’t say Australia wasn’t a great place to live. I spend half the year there after all. What s***s me though is the Australian taxation system and how it disadvantages those that work hard and make sacrifices all their life but openly supports those that have bludged all their life. While it may be getting better and certainly if you are a resident in Australia the super system is getting better it has no benefit at all as an expat. Infact it is penalising us.

Gnadenburg
It makes me shudder, poorly structured expats, who end up having to retire in developing Asian nations to beat the taxman.
You are shooting at the hip. Most expats that I know retire very comfortably in Australia. Like all aspects of society there will be some that make bad decisions just as there are those that live and work in Australia that make bad decisions. Asia is only one of the places I can live. I also have right of abode in Europe, USA and New Zealand. While most of Europe has a more socialistic welfare and taxation system than Australia, the US and believe it or not NZ don’t.
There are so many ways around it. But you need to pay for the expertise.
I do pay for very good financial advice and am more than qualified myself to make my own informed decisions being an accountant myself. Unfortunately Super in Australia has been the playing fields of politicians for many years. They have constantly changed the rules to the point that it is impossible to make any reasonably informed long-term decision as to how to invest in it. Governments will continue to come and go over the next 21 years before my retirement and they too, just as the sun rises in the east and sets in the west, will also change the rules to suit their political agenda. In that light I will continue to keep my Super (Provident Fund) off shore out of their reach.
You borrow 100% for a 500,000 AUD property ( easy abroad ). You rake up 30K tax credit annually- negative gearing, depreciation, visits home for inspection etc. Interest only strucuture on the loan, with the cashflow you would traditionally use to pay off the principal, freed up to put money in to the sharemarket. After a decade abroad, you have a 300K taxation credit, a share market portfolio that is not far from the original value of the property. The most basic of structures.
What do you base this on? Just to put you in the picture all the financial institutions here in Hong Kong require at least a 20 – 30% deposit on residential investment property in Australia. Secondly interest only loans are for fools, especially in a declining property market as most of Australia is at the moment. If I were to finance a property in Australia from Hong Kong and the property was to fall below about 20% equity the bank will call the loan. I will then have to find the money to restore that loan to at least 20% equity or sell the property at a loss. As for the rest of your figures, they are rubbery to say the least. They are as credible as some of the figures I have seen from the shonky financial advisers from Australia that ply their dishonest trade throughout Asia and the Middle East trying to suck in some poor expat into their shonky financial schemes.

[Gnadenburg]

404

If you are on a 15 to 30K AUD package a month in HK, and can't raise some creative finance to borrow at 100%, to take full advantage of tax losses in Oz, I can't help you. Whether it be equity or offset accounts or whatever.

Run the scenario from a decade ago- you buy a 500K AUD home anywhere in OZ, interest only because you are comfortable in debt management, and invest your excess cashflow in to the stockmarket. Where do you sit today? Property worth a million, the 2K a month you didn't pay off the loan but invested with tax free capital gains on the sharemarket is worth ( you tell me ) and you have a tax credit of about 300K.

Interest only is a superb vehicle to maintain high cashflow and minimise taxation. It is hardly for fools. That said, a fool will get themselves in trouble pretty quickly through mismanagement of this strategy.

[404 Titan]

Gnadenburg
If you are on a 15 to 30K AUD package a month in HK
Not on “B” scale I’m not. You’re still under the misguided belief that everyone at CX is on “A” scale and earning heaps more than the average QF driver. We’re not.
and can't raise some creative finance to borrow at 100%, to take full advantage of tax losses in Oz, I can't help you. Whether it be equity or offset accounts or whatever.
Yep I could if I wanted to but that would mean less to invest else where, considerably less. With interest rates at over 8% for investment properties and only slightly less in HK and gross returns on investment properties currently running at less than 3% Australia wide with no improvement in sight, no negative gearing is going to offset the loss you are going to make. You might have caught the wave ten years ago but those times have well and truly gone. Even the stock markets are starting to look awfully overvalued. The people that will make money over the next 5 – 10 years are those that are conservative with their investments, not those that take stupid risks and over gear themselves in a declining market. And I haven’t even mentioned the inherent risks that currently exist with the high Australian dollar and buying property in Aus. That didn’t exist 10 years ago either.

[Biggles_in_Oz]

... but invested with tax free capital gains on the sharemarket ...
According to the ATO, capital gains on shares are taxable.
http://www.ato.gov.au/individuals/content.asp?doc=/content/36520.htm
http://www.ato.gov.au/individuals/content.asp?doc=/content/36546.htm
http://www.ato.gov.au/corporate/content.asp?doc=/content/75498.htm

[Gnadenburg]

Biggles

Thanks for the links but we are talking about non-residents! CGT exempt on share gains until the day they repatriate. Go and talk to an accountant.



404

Are you an S/O?

There will be money made out of property and shares in the next decade. Studious expat investors with good structuring are at considerable advantage.

[404 Titan]

Gnadenburg
Are you an S/O?
No.
There will be money made out of property and shares in the next decade.
Yes there will.
Studious expat investors with good structuring are at considerable advantage.
Yes they are but like all investor the trick is to get in when the market is at a low and get out when the market is at a high or to make a quick killing in a volatile market. The stock markets worldwide are currently at a high. Granted property on the east coast is down a little but quite frankly the capital gains won’t be there for the foreseeable future as the affordability just isn’t there for the average Australian and the interest rate cycle hasn’t finished.

[relax737]

404, I didn't say that you'd suggested Australia wasn't a good place to live; but I still contend that it is the BEST place to live, in spite of an unfriendly taxation system, supporting the bludgers in society, inadequate penalties for crime, etc., etc.

There are ways to minimize what you give Mr Carmody, but you will always pay some tax.

Comparing a vast, sparsely populated country like Australia with almost anywhere else will never be a valid comparison. The cost of infrastructure for low population centres, connecting those centres, etc., is huge compared with somewhere like Hong Kong, or Japan, or anywhere else.

Japan has a maximum (for most) tax rate of 20% I believe, but it has 125 million people in a country just marginally bigger than New Zealand, BUT only about 20% of the country is developed because it is so mountainous.

The cost of roads, services, etc., in a country like that will always be way less than Australia. I'm not making excuses for the taxation rates, but if you want services and want to liv e here, then taxes are inevitable.

Live somewhere like Vanuatu where there are no direct taxes, but no services either; roads are $hit, much is unsewered, septics rule, contaminating the groundwater, and I could go on and on.

I still contend that in spite of its shortcomings, I would live nowhere else, particularly in retirement, where if you blow everything on the nags or flea bags, then there is a safety net. I hope I'll never need it, but it's there if I do. :ok:

[Swingwing]

Am I alone in starting to find this all a bit unseemly? Expats plotting ways to avoid paying any tax here at home, but at the same time asserting the right to retire here (free of tax of course) when they've racked up a nest egg of suitable size overseas?

And then we get the lecture from Metro Man:

There are many expats like me who will drop Australia like a hot potato if you back us into a corner. Then you won’t see anything, not even GST revenue.

Thanks for the threats, but if that's your attitude, why don't you stay away? A few cashed up old Cathay captains returning from Hong Kong to their properties on the Gold Coast is hardly going to reverse the brain drain you know. If you were a cancer researcher or a mining engineer then maybe, but if you suck $1000p.a from Medicare then you're only just going to pay your own way in GST - so spare us the sanctimoniousness about the tax system here. Those of us who are actually building and funding the society that you plan to retire in (after proudly contributing nothing in tax for the previous 30 years) are too busy working to listen to your whingeing.

Sorry - having re-read the above, it was maybe a bit harsh (cuppla nice Barossa reds gets me fired up.) I've got no objection at all to you living offshore - and if you choose to do so, then I'd agree that you shouldn't have to pay income tax while you're away. But with rights come obligations. If you want to continue to be Australian, and you want to spend your twilight years here, then I think it's only fair that you pony up a bit of the freight that's going to be involved in carrying you once you come home. Your protestations to the contrary, hardly anyone is a fully self-funded retiree - everyone gets the benefits of Medicare, pensioner travel and concessional tax treatment.

We all know about the demographic challenge - it's going to be hard enough for the next generations to support those of us who are working here now, let alone the returnees who think they're entitled to a free ride because they've got a passport with an emu on it......so go easy eh?

That's only my 20 cents worth though. Enjoy Hong Kong.

SW

[Metro man]

You talk about funding Medicare, I did, yet as I earned over $50 000 a year I had to either take out private medical insurance or pay the Medicare levy.

You talk about the next generation funding your retirement, where I work the idea is to fund your own, does that sound fairer ?

Who thinks the Australian government spends the tax revenue it receives sensibly ? I don't, the waste is unbelievable 1/3 of the budget in welfare, a considerable proportion to those who just don't want to work and a not inconsiderable sum supporting an overblown government bureaucracy at state and federal level.

I feel no obligation to provide those who will not work with a higher standard of living than I had when unable to find a flying job and had to undertake other things.

As for the society being built at the moment in Oz, I don't think too much of it. A culture of entitlement and penalising those who try to get ahead. A revolving door, slap on the wrist justice system where only the criminals have rights. A bunch of hand wringing politically correct whingers running things where if you are a straight white male you are an out cast, much better to be an ethnic, non English speaker with a criminal record.

That's my 2c worth.

P.S. Love it here in SE Asia ;)

[ShockWave]

Being an Ozi expat I have to agree with what both of you guys have to say.
I don't think there are many expats who are unwilling to pay tax on their return to Oz. However it is the type and level of tax that is the problem.

If you have been out of the country for ten or twenty years you obviously have not been using the roads, medicare, schools or old folks homes so why should we be taxed on money we bring back with us? The ivestments we make in Oz or the interest is taxable, medicare or private health insurance still has to be paid, anything we spend our often hard earned expat cash on will attract GST, sales tax etc etc and provide a boost to the economy overall.
Wealthy expats will not be relying on the pension, or medicare in their retirement.
Just like immigration really, wealthy immigrants and their money are welcomed with open arms, but we just gotta tax those expats after escapeing the tax system for a few years.:ugh:

[Gnadenburg]

Swingwing


There are two attitudes that worry me in Australia. The first is yours. The second, the political correctness that has us importing and tolerating garbage such as the Hilali.

It is fashionable to dismiss aviation as a brain drain- probably because standards are now so low in Oz. However, don't forget, it was repatriated aviation expertise that launched Virgin Blue & to a lessor extent Jetstar. Although it was expertise that was destined to go abroad that gave J* a leg up.

There are a million expats abroad. A good percentage are professionals. The wealth is immense in all fields. Expats invest heavily in Australian property which in effect subsidises rent, raises standards of living, props up the critical building industry and thankfully, goes some way in reducing government investment in public housing.

Expats are big investors in the Australian sharemarket. Aswell as huge consumers of Australian products abroad, initially creating niche markets that often manifest into wider export opportunities for Australian business- that Barossa red you had tonight, was of a high quality whatever the price range, helped by booming wine export markets. Incidentally, I'm imbiding in a 91 Rockford's Basket Press shiraz from the Barossa, absolute testament to the quality of some Australian wine producers.

Government should look at repatriating Australian wealth wisely- it could be a billion dollar industry annually! It could just as easliy be lost flippantly, as alluded to here, by a more globalised world in retirement.

And on taxation, and not being wanky, but drawing attention to expat contributions to the economy, I pay more in tax than a J* FO in GST on my commercial holdings alone. But I structure as best as I can to minimise tax, using government appoved taxation policy as an investment vehicle.

Foreign investment in Australia- a good percentage of it from non-residents financing their retirement! :ok:

[404 Titan]

Gnadenburg

Maybe we are in heated agreement after all. I agree totally with your last post.:ok: