exchange rate move or best u.k saving rate
Feb 18th 2010, 5:04 pm
#31
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Joined: Jul 2009
Location: Sydney
Posts: 313
Re: exchange rate move or best u.k saving rate
JAJ,
I have read some of your previous posts on this board, so your view does surprise me a weee bit?
But.............
In answer to your statement in bold above, well.........
If you have worked all your life in the UK, paid your mortgage, done a 60 hour week for years, watched your house in the UK rise in value, no speculation, it just went up like everyone elses. Then you decide to emigrate, so at the time of application, you do the sums. The house should sell at "x", we should recieve "y" at "z" exchange rate.
OK, you get for your house what someone is willing to pay, somewhere near what the lying barstweward estate agent said it would sell for. Lets say you are left with 150 grand in Sterling. Your lifes savings in monetry terms, you had done the maths on visa application at 2.5 to 1, all of a sudden when you book your flights two years later, its dropped to 1.7 to 1, like now.
This is a life changing sum of money, i do not care about it is as it is, its about Australia blah di blah! On arrival your job you have lined up pays $50,000.00 dollars a year gross.
On 150 grand sterling you have not lost, but the difference in the exchange rate from application to arrival is 0.8, and thats on 150 grand sterling, so it adds up to $120,000.00 dollars, nearly two and a half years gross income.
Now if that does not answer your question, well i am sorry, because like many, i would wait. Australia, is.........another country, but it ain't goin anywhere, and we all have to work. If waiting saves me working for two and a half years, well i am no rocket scientist, but my 10 year old niece could work this one out.
I have read some of your previous posts on this board, so your view does surprise me a weee bit?
But.............
In answer to your statement in bold above, well.........
If you have worked all your life in the UK, paid your mortgage, done a 60 hour week for years, watched your house in the UK rise in value, no speculation, it just went up like everyone elses. Then you decide to emigrate, so at the time of application, you do the sums. The house should sell at "x", we should recieve "y" at "z" exchange rate.
OK, you get for your house what someone is willing to pay, somewhere near what the lying barstweward estate agent said it would sell for. Lets say you are left with 150 grand in Sterling. Your lifes savings in monetry terms, you had done the maths on visa application at 2.5 to 1, all of a sudden when you book your flights two years later, its dropped to 1.7 to 1, like now.
This is a life changing sum of money, i do not care about it is as it is, its about Australia blah di blah! On arrival your job you have lined up pays $50,000.00 dollars a year gross.
On 150 grand sterling you have not lost, but the difference in the exchange rate from application to arrival is 0.8, and thats on 150 grand sterling, so it adds up to $120,000.00 dollars, nearly two and a half years gross income.
Now if that does not answer your question, well i am sorry, because like many, i would wait. Australia, is.........another country, but it ain't goin anywhere, and we all have to work. If waiting saves me working for two and a half years, well i am no rocket scientist, but my 10 year old niece could work this one out.
All the 12 month currency graphs show that since October the £/AU$ level appears to have bottomed out at about 1.7-1.8. I didn't cash in my shares when the FTSE bottomed out and I'm not about to do that with my cash now at 1.7.
At the end of the day, I don't need to transfer the cash now so why not just wait. How long can you wait is the more pressing issue?
Last edited by 77hil; Feb 18th 2010 at 5:07 pm.
Feb 20th 2010, 12:28 am
#32
Banned
Joined: Feb 2008
Posts: 421
Re: exchange rate move or best u.k saving rate
Australian tax law says that foreign currency is a CGT asset:
http://law.ato.gov.au/atolaw/view.ht...7#108-5%281%29
So if nothing else, holding GBPs when a tax resident of Australia means you have a CGT asset which is taxed in the same manner as any other investment.
The forex rules overlay the CGT rules.
There are also various Private Binding Ruling extracts on the ATO website, such as:
http://www.ato.gov.au/rba/content.as...tent/65872.htm
While I acknowledge that a Private Ruling is specific to the taxpayer that applied for it, I submit that those who are retaining GBPs in contemplation of an improvement in the number of AUDs they will receive may well have a tax exposure when they eventually sell £ and buy A$'s.
Agreed that these provisions may well be observed more in the breach than in the compliance, but I have yet to see any specific exemption in the tax code that some on this thread are suggesting exists.
Best regards.
http://law.ato.gov.au/atolaw/view.ht...7#108-5%281%29
So if nothing else, holding GBPs when a tax resident of Australia means you have a CGT asset which is taxed in the same manner as any other investment.
The forex rules overlay the CGT rules.
There are also various Private Binding Ruling extracts on the ATO website, such as:
http://www.ato.gov.au/rba/content.as...tent/65872.htm
While I acknowledge that a Private Ruling is specific to the taxpayer that applied for it, I submit that those who are retaining GBPs in contemplation of an improvement in the number of AUDs they will receive may well have a tax exposure when they eventually sell £ and buy A$'s.
Agreed that these provisions may well be observed more in the breach than in the compliance, but I have yet to see any specific exemption in the tax code that some on this thread are suggesting exists.
Best regards.
But i am not convinced, not one bit, this would not stand up in a court of law, too many variables, which would be counter argumentitive in the law courts.
Then there is this footnote.
Note 2:
An asset is not a CGT asset if the asset was last acquired before 26 June 1992 and was not an asset for the purposes of former Part IIIA of the Income Tax Assessment Act 1936: see section 108-5 of the Income Tax (Transitional Provisions) Act 1997.
You may have acquired you cash prior to 1992.
I actually physically asked the question to an ATO representitive, they said no such tax. For me that is enough, i have my visit and conversation documented, so i pay no tax. I move my money; if i do when i want to, so to suit my circumstances. The loopholes are all over the place, its the reason why the UK and the US have no such law for private forex transactions for individuals. Its just impossible to inforce and manage without a long and costly drawn out time in the courts.
Its a nice thought for such a small economy in need of capital asap, for lending and taxation local to Australia, they really need it, but no, myself will not be paying it, nor should i suggest anyone else should worry about it or pay it.
Regards.
Feb 20th 2010, 6:33 am
#33
Lost in BE Cyberspace
Joined: Jan 2009
Location: Brisbane
Posts: 20,821
Re: exchange rate move or best u.k saving rate
[quote=JAJ;8334541]
...
South Africans have had to get used to a chronically weak exchange rate since around 1985/86 and the same may be true for the United Kingdom going forward.
...quote]
You can say that again! Now we're in the UK and thought this was a strong currency. We have built up 'assets' here and now it's all gone pear shaped as well.
...
South Africans have had to get used to a chronically weak exchange rate since around 1985/86 and the same may be true for the United Kingdom going forward.
...quote]
You can say that again! Now we're in the UK and thought this was a strong currency. We have built up 'assets' here and now it's all gone pear shaped as well.
Feb 20th 2010, 7:53 am
#34
BE Enthusiast
Joined: Jun 2009
Location: Wivenhoe
Posts: 595
Re: exchange rate move or best u.k saving rate
Thanks,
But i am not convinced, not one bit, this would not stand up in a court of law, too many variables, which would be counter argumentitive in the law courts.
Then there is this footnote.
Note 2:
An asset is not a CGT asset if the asset was last acquired before 26 June 1992 and was not an asset for the purposes of former Part IIIA of the Income Tax Assessment Act 1936: see section 108-5 of the Income Tax (Transitional Provisions) Act 1997.
You may have acquired you cash prior to 1992.
I actually physically asked the question to an ATO representitive, they said no such tax. For me that is enough, i have my visit and conversation documented, so i pay no tax. I move my money; if i do when i want to, so to suit my circumstances. The loopholes are all over the place, its the reason why the UK and the US have no such law for private forex transactions for individuals. Its just impossible to inforce and manage without a long and costly drawn out time in the courts.
Its a nice thought for such a small economy in need of capital asap, for lending and taxation local to Australia, they really need it, but no, myself will not be paying it, nor should i suggest anyone else should worry about it or pay it.
Regards.
But i am not convinced, not one bit, this would not stand up in a court of law, too many variables, which would be counter argumentitive in the law courts.
Then there is this footnote.
Note 2:
An asset is not a CGT asset if the asset was last acquired before 26 June 1992 and was not an asset for the purposes of former Part IIIA of the Income Tax Assessment Act 1936: see section 108-5 of the Income Tax (Transitional Provisions) Act 1997.
You may have acquired you cash prior to 1992.
I actually physically asked the question to an ATO representitive, they said no such tax. For me that is enough, i have my visit and conversation documented, so i pay no tax. I move my money; if i do when i want to, so to suit my circumstances. The loopholes are all over the place, its the reason why the UK and the US have no such law for private forex transactions for individuals. Its just impossible to inforce and manage without a long and costly drawn out time in the courts.
Its a nice thought for such a small economy in need of capital asap, for lending and taxation local to Australia, they really need it, but no, myself will not be paying it, nor should i suggest anyone else should worry about it or pay it.
Regards.
I feel you may be on the right track regarding taxing any gain as they appear to me not to not allow any tax relief if you make a loss on the exchange rate.
If as I understand it, they are (ATO) not interested in taxing you on any exchange rate gains, what have they said regarding the interest you receive from the money you leave in the UK?
Are they expecting the UK to tax that money and leave it at that or did they say they want a share of that too?
Regards
Feb 20th 2010, 9:36 am
#35
Migration Agent
Joined: May 2002
Location: Offices in Melbourne, Brisbane, Perth, Geelong (Australia), and Southampton (UK)
Posts: 6,459
Re: exchange rate move or best u.k saving rate
Thanks,
But i am not convinced, not one bit, this would not stand up in a court of law, too many variables, which would be counter argumentitive in the law courts.
Then there is this footnote.
Note 2:
An asset is not a CGT asset if the asset was last acquired before 26 June 1992 and was not an asset for the purposes of former Part IIIA of the Income Tax Assessment Act 1936: see section 108-5 of the Income Tax (Transitional Provisions) Act 1997.
You may have acquired you cash prior to 1992.
I actually physically asked the question to an ATO representitive, they said no such tax. For me that is enough, i have my visit and conversation documented, so i pay no tax. I move my money; if i do when i want to, so to suit my circumstances. The loopholes are all over the place, its the reason why the UK and the US have no such law for private forex transactions for individuals. Its just impossible to inforce and manage without a long and costly drawn out time in the courts.
Its a nice thought for such a small economy in need of capital asap, for lending and taxation local to Australia, they really need it, but no, myself will not be paying it, nor should i suggest anyone else should worry about it or pay it.
Regards.
But i am not convinced, not one bit, this would not stand up in a court of law, too many variables, which would be counter argumentitive in the law courts.
Then there is this footnote.
Note 2:
An asset is not a CGT asset if the asset was last acquired before 26 June 1992 and was not an asset for the purposes of former Part IIIA of the Income Tax Assessment Act 1936: see section 108-5 of the Income Tax (Transitional Provisions) Act 1997.
You may have acquired you cash prior to 1992.
I actually physically asked the question to an ATO representitive, they said no such tax. For me that is enough, i have my visit and conversation documented, so i pay no tax. I move my money; if i do when i want to, so to suit my circumstances. The loopholes are all over the place, its the reason why the UK and the US have no such law for private forex transactions for individuals. Its just impossible to inforce and manage without a long and costly drawn out time in the courts.
Its a nice thought for such a small economy in need of capital asap, for lending and taxation local to Australia, they really need it, but no, myself will not be paying it, nor should i suggest anyone else should worry about it or pay it.
Regards.
A verbalised conversation is not a sound basis if you find yourself subject to a tax audit. Apply for a Private Binding Ruling, and see what response you get - only by using that approach can you bind the tax office to a position insofar as the taxation of your income/capital gains (or not) is concerned.
For ease of reference: http://www.ato.gov.au/atp/content.as...tent/19463.htm
Best regards.
Feb 20th 2010, 9:40 am
#36
Migration Agent
Joined: May 2002
Location: Offices in Melbourne, Brisbane, Perth, Geelong (Australia), and Southampton (UK)
Posts: 6,459
Re: exchange rate move or best u.k saving rate
Very interesting thread and thanks for the trouble to share your meeting brendarover.
I feel you may be on the right track regarding taxing any gain as they appear to me not to not allow any tax relief if you make a loss on the exchange rate.
If as I understand it, they are (ATO) not interested in taxing you on any exchange rate gains, what have they said regarding the interest you receive from the money you leave in the UK?
Are they expecting the UK to tax that money and leave it at that or did they say they want a share of that too?
Regards
I feel you may be on the right track regarding taxing any gain as they appear to me not to not allow any tax relief if you make a loss on the exchange rate.
If as I understand it, they are (ATO) not interested in taxing you on any exchange rate gains, what have they said regarding the interest you receive from the money you leave in the UK?
Are they expecting the UK to tax that money and leave it at that or did they say they want a share of that too?
Regards
Re UK source interest received: as a tax resident of Australia you are assessable on your worldwide income and capital gains - unless you can invoke the temporary tax resident provisions.
Note that you can claim any UK tax withheld on interest income as a foreign tax offset when including that same income on your Aussie tax return, and can apply to the UK bank or building society for UK interest to be paid gross if you are no longer ordinarily resident in the UK. Form R105 applies:
http://search2.hmrc.gov.uk/kbroker/h...jsp?formId=805
Best regards.
Feb 20th 2010, 2:45 pm
#37
BE Enthusiast
Joined: Jun 2009
Location: Wivenhoe
Posts: 595
Re: exchange rate move or best u.k saving rate
Losses on the disposal of non-A$ currency are allowable under the forex provisions. The key is to get yourself within those provisions.
Re UK source interest received: as a tax resident of Australia you are assessable on your worldwide income and capital gains - unless you can invoke the temporary tax resident provisions.
Note that you can claim any UK tax withheld on interest income as a foreign tax offset when including that same income on your Aussie tax return, and can apply to the UK bank or building society for UK interest to be paid gross if you are no longer ordinarily resident in the UK. Form R105 applies:
http://search2.hmrc.gov.uk/kbroker/h...jsp?formId=805
Best regards.
Re UK source interest received: as a tax resident of Australia you are assessable on your worldwide income and capital gains - unless you can invoke the temporary tax resident provisions.
Note that you can claim any UK tax withheld on interest income as a foreign tax offset when including that same income on your Aussie tax return, and can apply to the UK bank or building society for UK interest to be paid gross if you are no longer ordinarily resident in the UK. Form R105 applies:
http://search2.hmrc.gov.uk/kbroker/h...jsp?formId=805
Best regards.
In the papers today they suggest UK interest rates could remain below 1% for the next 5 years.
Regards Les.
Feb 21st 2010, 2:39 am
#38
Account Closed
Joined: Nov 2009
Posts: 153
Re: exchange rate move or best u.k saving rate
Marks and Spencer have a good fixed rate "bond" (issue 9) which gives 4% interest. Bond lasts 4 years I believe (might be 3) and you can withdraw your cash at any time for a £100 withdrawal fee. I think this is one of the best account out there at the mo.
Feb 21st 2010, 4:32 am
#39
Account Closed
Joined: Jul 2006
Posts: 14,188
Re: exchange rate move or best u.k saving rate
You don't seriously believe that the ATO wouldn't wage all out war on any case that had the potential to cost them millions in the long run do you?
Feb 21st 2010, 7:35 am
#40
BE Enthusiast
Joined: Jun 2009
Location: Wivenhoe
Posts: 595
Re: exchange rate move or best u.k saving rate
It is one of the few fixed rate bonds with a reasonable get out clause, it is a 3 year bond.
Feb 21st 2010, 6:07 pm
#41
Retired
Joined: Apr 2004
Posts: 34,649
Re: exchange rate move or best u.k saving rate
You go for it mate... if you feel you can win in a battle against the ATO, or any other tax office for that matter, particularly if there are serious sums involved then you have my best wishes.... but I won't be chipping into any charitable fund, set up on your behalf, to help you out after ATO have finished squeezing your pips.
You don't seriously believe that the ATO wouldn't wage all out war on any case that had the potential to cost them millions in the long run do you?
You don't seriously believe that the ATO wouldn't wage all out war on any case that had the potential to cost them millions in the long run do you?
Unclear why Australia chooses to set its system up this way but for large corporations, calculating tax on foreign exchange movements is one of the most complex tax compliance activities and the number of people in the ATO who understand the detail is not high. The answer can be favorable to the corporation or the ATO.
It's not the same as foreign interest, dividends and rentals where it is straightforward to calculate, there's almost always something due to the ATO.
In fact, if the British government doesn't sort out the UK deficits fairly quickly the only way sterling is likely to go is downwards. Hence my comments questioning the assumption that the sterling/AUD rate is likely to recover. It may not. One should ask why Australians are not looking to buy sterling if the exchange rate is really so good.
Feb 22nd 2010, 2:56 am
#42
Banned
Joined: Feb 2008
Posts: 421
Re: exchange rate move or best u.k saving rate
You go for it mate... if you feel you can win in a battle against the ATO, or any other tax office for that matter, particularly if there are serious sums involved then you have my best wishes.... but I won't be chipping into any charitable fund, set up on your behalf, to help you out after ATO have finished squeezing your pips.
You don't seriously believe that the ATO wouldn't wage all out war on any case that had the potential to cost them millions in the long run do you?
You don't seriously believe that the ATO wouldn't wage all out war on any case that had the potential to cost them millions in the long run do you?
Read the thread, you might get some answers, at least i can back up my posts with research in a real physical sense. I even give you the address and phone number.
I have to sometimes remind myself that it is human nature for many to want to inflict as much financial pain on another human fellow. Envy, greed, the monster with green eyes? Why is that, why do posters on this board get so much enjoyment trying to scare other posters with such nonsense. You really are some kind of sad nonse!
.
Feb 22nd 2010, 2:59 am
#43
Migration Agent
Joined: May 2002
Location: Offices in Melbourne, Brisbane, Perth, Geelong (Australia), and Southampton (UK)
Posts: 6,459
Re: exchange rate move or best u.k saving rate
Play the man and not the ball ... that's very constructive.
Best regards.
Best regards.
Feb 22nd 2010, 3:17 am
#44
Account Closed
Joined: Jul 2006
Posts: 14,188
Re: exchange rate move or best u.k saving rate
I have to just read this type of post and realise the quality of financial content on this site at times is much the same as the Beano. Go back to your comics pal, you seriously believe i read this cr@p and take note without any kind of effort or research to back up such a stupid statement on your part?
Read the thread, you might get some answers, at least i can back up my posts with research in a real physical sense. I even give you the address and phone number.
I have to sometimes remind myself that it is human nature for many to want to inflict as much financial pain on another human fellow. Envy, greed, the monster with green eyes? Why is that, why do posters on this board get so much enjoyment trying to scare other posters with such nonsense. You really are some kind of sad nonse!
.
Read the thread, you might get some answers, at least i can back up my posts with research in a real physical sense. I even give you the address and phone number.
I have to sometimes remind myself that it is human nature for many to want to inflict as much financial pain on another human fellow. Envy, greed, the monster with green eyes? Why is that, why do posters on this board get so much enjoyment trying to scare other posters with such nonsense. You really are some kind of sad nonse!
.
Brilliant. Love it. A 'sad nonse' for suggesting that the ATO would come after you for any tax they think you owe them.... ahahahahahahahahahahahaha.
What do you think they would do... just laugh it off?. They never laughed at Paul Hogan.
Seriously, why do you think I even care how much money you make/lose from any transaction?... I don't know you... I'm unlikely to ever know you... and really have no interest in your finances.
Feb 22nd 2010, 3:27 am
#45
BE Enthusiast
Joined: Jun 2003
Location: Melbourne, Victoria
Posts: 524
Re: exchange rate move or best u.k saving rate
Maybe because UK property market is looking attractive when you consider the triple whammy of: low interest rates, fallen prices, weak pound. Whereas Australian property appears overinflated.