Wealthy Expats won't find it alluring
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.
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.
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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.
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.
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Wiley there are always ways and means 
. 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
like I have done, because they will sort the problem out for you.
. 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
like I have done, because they will sort the problem out for you.
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.
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.
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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.
Is it any wonder people like 404Titan decide to stay offshore.
[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.
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.
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404 Titan
My Financial Advisor 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.
My Financial Advisor
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.auGood luck commuting.
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.
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.
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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. 
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.
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.
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.
Last edited by Gnadenburg; 30th Oct 2006 at 02:28.
relax737
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
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.
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.
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.
404 Titan, you sound like a very negative chappie; a refugee from the 89 thing perhaps?
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.
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
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.
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.
Gnadenburg
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.
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.
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.
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According to the ATO, capital gains on shares are taxable.
http://www.ato.gov.au/individuals/co...tent/36520.htm
http://www.ato.gov.au/individuals/co...tent/36546.htm
http://www.ato.gov.au/corporate/cont...tent/75498.htm
http://www.ato.gov.au/individuals/co...tent/36520.htm
http://www.ato.gov.au/individuals/co...tent/36546.htm
http://www.ato.gov.au/corporate/cont...tent/75498.htm
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.
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.
Gnadenburg
No.
Yes there will.
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.
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.
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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.
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.
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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:
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
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.
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
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
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