Wealthy Expats won't find it alluring
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Wealthy Expats won't find it alluring
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."
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
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.
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.
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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.
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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!!!
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Not just tax, Industrial Relations too
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...0-1702,00.html
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...0-1702,00.html
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I don't understand
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
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
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Wealthy Expats won't find it alluring
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.
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.
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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.
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.
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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!
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!
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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.
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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.
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.
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Just had another look at the 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 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
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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.
People see and try to interpret what they hear to fit their own circumstances.
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mills cross I would suggest having a look at http://www.majenda.com
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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 !!
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 !!
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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.
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.
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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_arti...&nav_top_id=78 for a more succinct explanation.
Bytheway, Cunningham this is no longer a proposal.
So there is time to put the nest egg in place.
Have a look at http://www.majenda.com/html/s02_arti...&nav_top_id=78 for a more succinct explanation.
Bytheway, Cunningham this is no longer a proposal.