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Given dismal exchange rates

Given dismal exchange rates

Old Sep 28th 2010, 12:10 am
  #31  
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Default Re: Given dismal exchange rates

Originally Posted by Seneca21
Sure I know you're just giving your views, thanks. My problem is that PB winnings are treated the same as gambling winnings in the UK and therefore not subject to tax. Do they tax gambling winnings in Australia then? If so this is starting to make sense.

If not I am struggling to see why anyone should pay tax on winnings won in the UK when they are not taxed in Australia, just because they are living in Australia - maybe even temporarily.
From the lovely ATO themselves.

Issue

Is a cash prize received by a taxpayer in their capacity as the holder of a United Kingdom (UK) investment assessable under section 6-10 of the Income Tax Assessment Act 1997 (ITAA 1997)?

Decision

Yes. A cash prize received by a taxpayer in their capacity as the holder of a UK investment is assessable under section 6-10 of the ITAA 1997 as it is statutory income under section 26AJ of the Income Tax Assessment Act 1936 (ITAA 1936).

http://law.ato.gov.au/atolaw/view.ht...D2002123/00001

So you keep the money in the UK and withdraw from the ATM or use your credit card, easy :-D
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Old Sep 28th 2010, 12:19 am
  #32  
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Default Re: Given dismal exchange rates

Originally Posted by markbhx
From the lovely ATO themselves.

Issue

Is a cash prize received by a taxpayer in their capacity as the holder of a United Kingdom (UK) investment assessable under section 6-10 of the Income Tax Assessment Act 1997 (ITAA 1997)?

Decision

Yes. A cash prize received by a taxpayer in their capacity as the holder of a UK investment is assessable under section 6-10 of the ITAA 1997 as it is statutory income under section 26AJ of the Income Tax Assessment Act 1936 (ITAA 1936).

http://law.ato.gov.au/atolaw/view.ht...D2002123/00001

So you keep the money in the UK and withdraw from the ATM or use your credit card, easy :-D
Thanks for this. Totally unfair as well, because I just read that winnings in Australia are not taxable unless you are a professional gambler.

So in sum:

1. You do not pay tax on UK winnings in UK
2. You do not pay tax on Australian winnings in Australia
3. You do pay tax on UK winnings if living in Australia

This sort of thing encourages dishonesty. Like I said earlier I don't have the kind of money you would need to invest in this and win, but if I did and I won I would rather legally transfer the winnings to family and literally and legally let them have it and spend it than pay this tax on it.
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Old Sep 28th 2010, 12:27 am
  #33  
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Default Re: Given dismal exchange rates

Originally Posted by markbhx
So you keep the money in the UK and withdraw from the ATM or use your credit card, easy :-D
And that is how the ATO has already caught up with a few high profile tax evaders (minimisers).

There is also the issue of sharing of information between the ATO and various bodies abroad eg banks, investment houses, et al.
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Old Sep 28th 2010, 12:30 am
  #34  
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Default Re: Given dismal exchange rates

Originally Posted by OzSheila
And that is how the ATO has already caught up with a few high profile tax evaders (minimisers).

There is also the issue of sharing of information between the ATO and various bodies abroad eg banks, investment houses, et al.
If you are using a UK credit card then you are no actually bringing cash into the country. Its not even your money, its the credit cards money. So maybe they should tax the UK credit card company for allowing their money to be spent outside of the UK.
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Old Sep 28th 2010, 12:38 am
  #35  
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Default Re: Given dismal exchange rates

Originally Posted by OzSheila
And that is how the ATO has already caught up with a few high profile tax evaders (minimisers).

There is also the issue of sharing of information between the ATO and various bodies abroad eg banks, investment houses, et al.
Like I said, the unfairness of this tax means people will try to dodge it. There are legal ways to get round this (if slightly inventive), but it's so unnecessary as the tax is so unjustifiable. My opinion is that people are basically honest and will pay most taxes as they understand the social contract, etc. But little government tricks like this encourage people to become dishonest and that's a shame.
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Old Sep 28th 2010, 12:46 am
  #36  
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Default Re: Given dismal exchange rates

Originally Posted by Seneca21
There are legal ways to get round this (if slightly inventive).
I, as I am sure others would be interested to hear these "legal" ways.

Originally Posted by Seneca21
My opinion is that people are basically honest and will pay most taxes as they understand the social contract, etc..
I am not convinced of this. Having worked for 4 small businesses here in Oz for the past 5 years, everyone of them has not, and/or is not paying what they should be. And yet if you are a PAYG earner there is little room for movement.
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Old Sep 28th 2010, 12:50 am
  #37  
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Default Re: Given dismal exchange rates

Originally Posted by OzSheila
I am not convinced of this. Having worked for 4 small businesses here in Oz for the past 5 years, everyone of them has not, and/or is not paying what they should be. And yet if you are a PAYG earner there is little room for movement.
Don't get me started on that for God's sake. I know several of these (UK) and one in particular who is doing very well indeed and has a very relaxed interpretation of various taxes and laws. His reward for his dishonesty and deceit - a large house in the country and no worries about his pension.
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Old Sep 28th 2010, 6:32 am
  #38  
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Default Re: Given dismal exchange rates

Originally Posted by Seneca21
Sure I know you're just giving your views, thanks. My problem is that PB winnings are treated the same as gambling winnings in the UK and therefore not subject to tax. Do they tax gambling winnings in Australia then? If so this is starting to make sense.

If not I am struggling to see why anyone should pay tax on winnings won in the UK when they are not taxed in Australia, just because they are living in Australia - maybe even temporarily.
All Gains from Savings and Investments are taxable in Australia.
Unfortunately the Premium Bond winnings are from the UK "National Savings and Investments"....

Winnings from any UK Lottery however, are NOT taxed in Australia.

Premium Bonds are not classed as gambling, due to the fact that you can never lose your money. Any gain is just a return on your investment.
 
Old Sep 28th 2010, 6:35 am
  #39  
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Default Re: Given dismal exchange rates

Originally Posted by Seneca21
My opinion is that people are basically honest and will pay most taxes as they understand the social contract, etc.
Originally Posted by OzSheila
I am not convinced of this. Having worked for 4 small businesses here in Oz for the past 5 years, everyone of them has not, and/or is not paying what they should be.
Having done tax in both countries, I can assure you that most people/businesses, in both countries, will do whatever they can to avoid tax whenever possible, both legal and not.
 
Old Sep 28th 2010, 8:03 am
  #40  
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Default Re: Given dismal exchange rates

Originally Posted by ABCDiamond
Having done tax in both countries, I can assure you that most people/businesses, in both countries, will do whatever they can to avoid tax whenever possible, both legal and not.
LOL! And thanks for your other post - it was helpful. Basically the UK not taxing PBs is really the unusual position then as it clearly an investment.

Or do they tax PBs? Someone said they don't - I'm just following along with that.
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Old Sep 28th 2010, 8:18 am
  #41  
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Default Re: Given dismal exchange rates

Originally Posted by Seneca21
Like I said, the unfairness of this tax means people will try to dodge it.
Why is it unfair? Unless you agree that all tax is unfair why should this one be any different?
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Old Sep 28th 2010, 8:27 am
  #42  
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Default Re: Given dismal exchange rates

Originally Posted by NedKelly
Why is it unfair? Unless you agree that all tax is unfair why should this one be any different?
Death is even more unfair, IMO
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Old Sep 28th 2010, 11:15 pm
  #43  
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Default Re: Given dismal exchange rates

Originally Posted by NedKelly
Why is it unfair? Unless you agree that all tax is unfair why should this one be any different?
At the time I wrote that my position was that as winnings are not taxed in either country, why should they be taxed because you are in theo ther country when you win something?

But like someone said, they are not classified as winnings by the australian government but as return on investment, and therefore are taxable. In this case then the British Govt. position of not taxing ROI was the "odd man out" I guess. Apologies to anyone who actually knows about this process if I have it all wrong.
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