Given dismal exchange rates
#31
BE Enthusiast
Joined: Mar 2009
Posts: 623
Re: Given dismal exchange rates
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.
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.
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
#32
Re: Given dismal exchange rates
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
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
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.
#33
BE Enthusiast
Joined: Apr 2005
Location: Melbourne
Posts: 629
Re: Given dismal exchange rates
There is also the issue of sharing of information between the ATO and various bodies abroad eg banks, investment houses, et al.
#34
BE Enthusiast
Joined: Mar 2009
Posts: 623
Re: Given dismal exchange rates
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.
#35
Re: Given dismal exchange rates
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.
#36
BE Enthusiast
Joined: Apr 2005
Location: Melbourne
Posts: 629
Re: Given dismal exchange rates
I, as I am sure others would be interested to hear these "legal" ways.
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.
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.
#37
Re: Given dismal exchange rates
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.
#38
Guest
Posts: n/a
Re: Given dismal exchange rates
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.
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.
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.
#39
Guest
Posts: n/a
Re: Given dismal exchange rates
#40
Re: Given dismal exchange rates
Or do they tax PBs? Someone said they don't - I'm just following along with that.
#43
Re: Given dismal exchange rates
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.