Finances
 

Hi

We have just sold our house and are moving to Oz in Feb (currently sleeping on the floor at parents house :eek: ) We are not sure what to do with the money we have made on the house. We will be putting it straight back into property in Oz but that won't be for about a year. Is it best to invest it in the uk and then transfer it to Oz in about a year, or just transfer it straight away? Not sure if there are any tax implications? sorry if I sound vague, xmas hangover :beer:

Thanks!!

Re: Finances
 

We got a forward contract with a Money Exchange six weeks or so before we came out which meant we got the highest rate for that period which was 2.50 which seems to be the average highest over the last few months and then they tranferred it once we had opened an account in Oz I understood, but I may be wrong, that you need to bring money over within the first six months or there would be tax implications, but then I'm sure somebody said that was wrong! You may need to have some when you are here as the balance helps to get a rental if you haven't got jobs! We opened an account with St George here and they have been fab. We've got 5.75% which I think is reasonable. There is a risk that if you don't transfer it and the exchange rates drops a lot, but its just a lottery really, you could wait and it might go right up. Probably best to do whats right for you.

Good luck with the move anyway!

Re: Finances
 

Hi i'm in the same position, i'm moving out to Sydney in around 6 weeks. I've also got to set up an account and transfer my house-sale money.
Can anyone recomend an account with a good rate of interest and easy access? is it easy to set up online and are there any fees for importing large ammounts of money?
Also, can i get a taxfile number before i enter the country or do i have to wait till i get to sydney, thanx

Re: Finances
 

Alan Colette is a good contact for these matters. Usually funds need to be in Australia within 6 months of arrival - this includes and pension funds,or you'll be taxed as income when in arrives! Also watch for any ISA's etc... Arrgh. However i may be wrong as sales of property are slightly different. I would transfer it when you can - oz accounts pay better interest than the uk.

Re: Finances
 

Hi Mark123

can i ask why watch for ISA's? we have a couple ongoing in uk which we plan to leave behind for now.

cheers
Raiz

Re: Finances
 

However if you are on a temporary visa the above does not apply. Seek professional advice from people like the aforementioned Alan Collett (he is a member of this site and can be contacted by PM).


:beer:

Buzzy

Re: Finances
 

Hi Riaz - you cant hold tax free accounts if you are not uk resident. Legally they have to be taken out of ISA status and then the interest earned declared as income on your australian tax return minus any tax deductions taken from the uk.

Re: Finances
 

for good rates of interest - try city pacific, we get 9.5%, there is a risk, of course, however when we saw their website and their profits... they build on the goldcoast and thats not stopping for a while. we do not have to give notice to withdraw but it is'nt a current account, and the rate drops if you do. basically we just had $20k in it and in two and a half years it went up to nearly $25k.... (we often say that it would have been good if we'd had a higher balance in teh first place!) needed to draw $5k a few months ago when we were moving properties, no problem, and i put it back in a couple of weeks later anyway. if left for the whole 12 month period we get the full 9.5%. of course you have to declare the interest on your tax return, this is split between me and hubby as earned income.
current accounts vary bank by bank, we have a commonwealth one which pays 5.75% which you can only draw online through another account.
karen

Re: Finances
 

This is not what I was told by my bank. They were very specific, and said that I CAN keep my ISA account open even when I am not UK resident for tax purposes. The only restriction was that I am not allowed to add any additional funds, as the allowance that you can add annually only applies to residents.
I did not check whether interest earned could be added to my ISA account, I suspect that this may be allowed but I will look in to it.
I certainly intend to keep my ISA in the UK with the maximum in it that I can add before we depart.

Re: Finances
 

When you say there is a risk.... is it an investment thing where your money can go down as well as up? I am just not gutsy enough to put all our house deposit money in a risky place, however lucrative it MIGHT be!

Re: Finances
 

Correct you can keep it when you migrate, however you cannot add to it. However its not classed as an ISA anymore. Thats what I meant. Also interest earned must be declared on your australian tax return. If you are on PR and intend to bring the cash in after 6 months of taking resident then the amount brought to australia could be classed as income, and income tax applied to the WHOLE amount taking a significant amount of capital away!

Re: Finances
 

Be aware that income from UK ISAs is usually taxable if you are a tax resident of Australia - unless you are a "temporary tax resident" (as defined - see the ATO website).

Also, retaining ISAs as a tax resident of Australia can trigger a tax exposure under Australia's Foreign Investment Funds legislation whereby you are required to include the increase in the value of your FIFs from one tax year to the next in your assessable income.

Maybe request the free tax factsheet on Foreign Investment Funds at this webpage:
http://www.collettandco.com/factsheet.cfm

Best regards.

Re: Finances
 

yes...you are right, check out the website. we are not gamblers either however, after weighing it we felt this was as reliable as it could be.....

Re: Finances
 

I read these boards with some interest and noticed your comment about City Pacific. Just to be clear about this, City Pacific states in their annual report that it is not a bank. It is a small (by Uk and world standards) finance house with just 300 employees and AU$1bn under management. It is very much tied to the continued success of the property market.
As you say, "there is a risk, of course". The trick is to assess carefully whether chasing high interest rates is creating an undue risk.

Re: Finances
 

Hi Adam,
This thread started me thinking about the only investment i have at the moment which is a endowment policy. Although i no longer have a mortgage i continued the payments to the endowment policy i had previuousley. Will this be counted as a taxable investment when it matures if i am resident in Australia?

Cheers

Chris