mvagusta

I have opened a Nab classic account in the hope that my 457 visa application will be approved.
When opening the account my bank also opened an Isaver account for me so that I can maximise my savings and the interest rate is alot better than what is currently available in the Uk unless I want to tie my money up for a long time.
Forgeting about currency fluctuations what are my tax implications (Uk and Oz) if I were to transfer my Uk savings to Nab to take advantage of the better interest rate.
I currently do not have an Australian tax file number and would be unable to get one until my application is approved.

lonndongeek

You're wanting to transfer money to Australia *before* you have an approved visa? Why on earth would you do that?

Fluid36

Why would you transfer savings to Aus at 1.58? - I'm sorry but I can't forget about FX implications if your visa may not be granted.

mvagusta

Because the interest rate is double what I can get in the Uk.

The rate can go up or down. Just because it's 1.58 at the moment doesn't mean it can't go lower or higher, hence the reason for leaving out the fx part of it. I know all about the fx part.

I only want to know about tax on an australian saving account for a British resident.

Fluid36

Could go up and could go down but if you know anything about FX you should have a look at the chart and the related economic factors in both countries, there's a lot more room on the upside than the down, the downward trend is pretty much exhausted so that's why I gave my 2 cents.

Can't help you on tax front but unless you've got at least a few hundred grand then I can't see the point of taking advantage of the extra interest for what could be a short term transaction because once you take into account the rate of exchange and difference between that and the mid rate and then the rate of exchange on the way back if the visa is not granted it's not worth it.

mvagusta

Yes I know a bit about fx as I currently trade the market hence the reason for omiting the fx part.

Fluid36

Ok, no probs, sorry i couldn't help on the tax part.

somme

You will be taxed on the interest untill you get a tax file number

ABCDiamond

Foreign residents pay tax differently from residents.

As a foreign resident you will:

have 10% of any interest earned from your Australian bank accounts withheld for tax. This interest is not included as assessable income.
You must advise the Australian financial institution of your overseas address so that this tax can be withheld, otherwise tax will be withheld at the higher rate of 46.5%

http://www.ato.gov.au/individuals/co...tent/29089.htm

Rambi

As ABC said you get taxed 10% by Aus.

You get this as a tax credit on your UK tax return. Assuming you are tax resident in the UK.

mvagusta

Thanks, that's good to know.

johnnye

If you do not provide a tax file number, the interest on you savings would be taxed at the highest rate 45%. The exchange rate is appaling at present why not wait until it eventually improves

Rambi

That's only if you are resident and don't supply a tax file number.

If you are non-resident then the withholding tax is 10%.