yafm

My sister in law who is migrating to France - sold her house this week. Advised to put her money into offshore funds Jersey/Guernsey or Isle of Man until the Euro is a better exchange rate. Also saving CGT as then funds are offshore.

Is this not a good idea for all of us who are waiting to get their main funds at a better rate for the $AU

Do the australian tax people accept this or have they 'ways of getting around it':scared: :scared: :scared:

Any advice gratefully recewived.

Incidentally the sister in law has been advised that Co-op in those islands is the best deal at present.

Kiwipaul

First of all I must advise I'M NO TAX EXPERT.

But The Australian Gov want to know about ALL your foreign income once you become resident in Australia for tax purposes.

But if you didn' tell them don't see how the would be able to find out about any of your funds worldwide. Your only risk would be in bring the money into Australia when you wanted it here. But then again millions are move in and out of the country on an hourly basic, so you pay your money and take your chance.

For big fish down here ripping off the public and cocking your noise at the gov seems to standard practice.

One guy a few days before HIH went belly up who was the finiancial director decided he was owed $200,000 for consultancy work he was going to do that evening. Got the MD to give him a signed check for the ammount then sent one of his minions down to the bank to cash it immediately.

The following day HIH went bust and all cheques were worthless, but this parasite has still got his money to the best of my knowledge.

Another director Rodney Adler from the same firm ripped off millions, but the only time you see in on TV is sipping his cocktails on a sun lounger on one of the most exclusive islands in Australia.

At the rate the Gov is going they will die of old age before the gov gets it's finger out.

yafm

Still hoping for some advice on this matter - perhaps from someone who has an off shore accpount or knows about the system Thanks

pommie bastard

Paul is giving good advice tell the buggers here sod all , keep your cash where they cannot tax it .
Mr fat bastard Packer the richest guy in Australia paid bugger all last year in tax his advice was all tax payers are mugs.

Don

For UK tax residents, you still have to pay tax on income from bank a/cs whether the money is held offshore or not. For Aus tax residents, you are taxed on worldwide income. Evading that tax liability is illegal.

Cheers - Don

yafm

Yes understand about income tax on worldwide income but thinking about GST on large sum while waiting for £ to strengthen against aud:scared:

Don

Do you mean Capital Gains Tax rather than Goods and Services Tax? Assuming you mean CGT, to my knowledge the UK doesn't tax you on gains in GBP terms if you held the money in (say) Euro and EUR appreciated against the pound. You can hold that money anywhere in the world and it doesn't change your eventual liability to tax on the interest oincome.

Aus, however, does charge CGT in the above scenario - so you need to observe the 6 month rule about bringing in monies when you take up residence.

Any clearer? I'm not sure I completely understand your question though!

Cheers - Don

yafm

Thanks Don I do mean capital gains tax and I thought someones posted on a thread that if you held your money in UK bank waiting for a better exchange rate you would pay CGT on the difference but my sister in law was told that off shore banking would solve this problem was she wrong?

pixie

[QUOTE][
Aus, however, does charge CGT in the above scenario - so you need to observe the 6 month rule about bringing in monies when you take up residence.

Could you explain the 6 month rule please.

Thanks

Pixie

Don

OK here's one answer. You have GBP100000. You stick it in the UK bank to wait for a better exchange rate. You go to live in Aus and the day you enter Aus as a resident the exchange rate is 1GBP = AUD2.50.

A year later the exchange rate is 1GBP = AUD3.00 and you convert everything to AUD and bring it into Australia to buy a house. You have 'made' AUD50000 on the better rate.

You are charged CGT in Aus on your gain because you did not bring the money into Aus within 6 months. (Experts, correct any misunderstandings please!)

Offshore banking would not change your tax liability in Aus.

Cheers - Don

pixie

Hello Don,

You seem very patient sharing your knowledge, can I take it that you can move to OZ and if you transfer funds within six months of becoming resident you are not taxed.

We are still dithering on whether to take the plunge this summer or just dip our toes in the water. From the advice you gave yesterday I think we need to take the plunge and have a mindset of staying permanently.

The financial implications of any decision will ultimately sway any decision and it is really useful receiving good information.


Pixie

Don

That's how I understand it for Aus, info picked up by checking these boards (we're off to NZ ourselves). You get 6 months' grace/ taxfree period to transfer assets from the Aus taxman. Have you checked the financial factsheets from Alan Collett? - see www.gomatilda.com and http://www.collettandco.co.uk/factsheet.cfm .

Cheers - Don

pixie

I do a little research on the web and 'double tax' seems like 'double dutch'

At first I think oh yes I understand it then I blink re-read the paragraph and think I'm not sure.

I thought I would share the info to tax your brains ( I know not very funny)

Double Tax Treaties

If you are in Australia for less than a relevant 183 day (approximately six months) period and are tax resident (and paying taxes on your salary/benefits) elsewhere then it may be possible and desirable for you to claim tax relief under a particular Double Tax Treaty. The relevant 183 day period is either 183 days in a calendar year or in any period of 12 months, depending upon the particular treaty involved. The Double Tax Treaty with the UK, for example, looks at 183 days in the Australian tax year which runs to 30 June.

So, for example, you could work in Australia from 1 February through to the following 30 November and could claim to be exempt from Australian tax under a Double Tax Treaty which considers 183 days in the Australian tax year. This is on the basis that, during the period concerned, you were tax resident in the other country and paying taxes on your salary and benefits there. Unfortunately, the same approach will not work with regard to any dividends you receive although, as you will see below, these may be exempt from Australian tax in any event.

In some cases, it would be beneficial, from a tax standpoint, to claim exemption under a Double Tax Treaty, i.e., if your other country of tax residence levies lower taxes, e.g., as with the UK and Germany. In other cases, whilst the tax liability in Australia may be broadly similar to or even lower than the taxes levied in your home country as with, perhaps, France, claiming exemption under a Double Tax Treaty offers administrative convenience and savings in professional fees (payroll bureau, tax return filing etc). If you remain tax resident in another country and either choose not to claim under a Double Tax Treaty or are not eligible to do so, you will not be able to achieve tax savings even if your home country taxes are higher than in Australia. This is because you will remain liable to tax in your home country and Australian taxes will simply be available to credit your home country liability. If Australian taxes exceed your home country liability, no tax refund may be obtained.

You will need to seek specialist tax advice from an Australian accountant or tax lawyer as regards any need to submit a formal claim for relief under the particular Double Tax Treaty concerned. Apart from the 183 day rule, the other criteria for obtaining relief are usually that you are paid by a non-Australian company and that the costs of your employment are borne by a non-Australian company. You should not, generally, have a problem satisfying these criteria.


Pixie

yafm

Now I'm REALLY confused. As we will probably not be earning and will NEVER be PR but will have to have a tax number will all these rules apply to us?

Don if we kept the money off shore for 5 and a half months and then got a good exchange rate would be skip the CGT Thanks for your assistance

Don

Must preface this by saying I'm not a qualified financial advisor nor offering any advice.

As I understand it, the key things are: PR status and tax residency.

PR: if you are not going to be PR in AUS, you need to explain a bit more what you will be. If you are going as a work visa holder for a limited duration, I honestly don't know if the 6 month rule applies to you. I wouldn't think so. Maybe one of the experts could help?

If the 6 month rule applies to you, you can do what you jolly well like with your money before you move it to Aus (provided you observe the 6 month rule). But if you were trading with that money and tax resident from day 1 but before the 6 month period was up, the profits from trading (shares/ frequent currency switches etc) would probably be seen as income and taxable. But a couple of switches (say, GBP-EUR-AUD) would not be seen as trading.

Cheers - Don