wafoo1

What's the best return on savings anyone has seen over here?
I've seen 5.3% from citibank is this beatable by anyone,need to do some serious money putting away instead of spending!

Stormz

we got a high interest savings account through BankWest a few years ago.... but that`s only 5% and you couldn`t withdraw any money before a year was up, and then only $5000 at a time minumum, so yours sounds good.

Kiwipaul

Ingdirect pay 5.00% with an internet account with no bank fees and no min balance. The rate varies with interest rates generally so you are not tied in.


dragondirect have the same account at the same 5.0% rate.

mh929

As an aside, is the interest subject to tax? The accounts I've looked at dont seem to specify gross and net interest like in the UK.

Or am I just living in a dreamworld

Kiwipaul

Yes it is subject to tax, but it is paid to you gross, so you have to declare it at the end of the year in your tax return and then depends wether you have overpaid or underpaid tax wether you pay more or get a refund.

Beware
If you bring over loads of dosh and put it in a high interest account for say 12 months before you buy a house or buisness. In the following tax year they will assume you are earning the same interest (plus 10%) and bill you 3 monthly throughout the year. You can advise them that your circumstances have changed and they will reduce the rate to what you advise.

BUT if you get it wrong and underpay (based on your year end tax return) their are penalty rates that apply so ere on the side of caution.

Wol

We have an ING account in the UK, so I emailed the Oz lot asking how we could set up an account down under before lleaving, and if they charge to receive money.

I got a reply saying that "We do not offer an account such as the one you are talking about"! (I had not mentioned any particular kind of account at all)

Would this be typical of an Oz bank's grasp of things?

Kiwipaul

You cannot pay money into these accounts except through a conventional Oz bank. And all transfers are done through this bank using the internet. I use my saving account at ANZ to transfer money to and fro.
So until you have a regular Oz bank account that meets the transfer requirements (most do) of the internet bank your stuffed.
The people who reply to your e mail are low paid students on min wages who have a list of how to answers and if your question dosn't fit it dosn't exist.
I doubt you would be able to open an account up from abroad their are ID requirements and so forth.

Stormz

Your best bet is to keep your money in your account in the UK, but get some friend or family you trust to be allowed to manage it. The bank will want their signature and address.

Then go to Oz, look around and open up a bank account.

When you feel like it, get your friend to transfer your money from the UK into your Oz account, via a transfer bank who will get you the best rates for the day.

check out places like:

http://www.money-exchangeonline.co.uk/

http://www.currenciesdirect.com/

I think we used currencies direct a few years ago... very good.

and here`s an exchange rate site:

http://www.moneyworld.co.uk/rates/currency/tourist.htm

ABCDiamond

Having a HSBC account in both UK and OZ, i set up a "Fax Authority" with HSBC, that allowed me to fax instructions to the bank in the UK.

When i needed to transfer a large sum from UK to OZ, i faxed over an instruction telling them the rate that I wanted the funds transferred at, and when the exchange rate reached that figure, they did the transaction.

I have internet banking in both countries, to make everything easy.

I visited the local manager before I left UK, to discuss everything, and spoke directly to him, on the phone, a couple of times before the transfer.

bondipom

You can wire from the UK directly into the INGdirect accounts. Tried and successfully tested. The Ingdirect account must be linked to an Australian Bank account.

gld

Be careful about holding cash in UK Australia has introduced a tax on cash whereby you make elections as to how you would be taxed on foreign exchange - this affects all migrants

Its rocket science - we have had to get legal opinion about it.

It does create opportunity to get tax relief on exchange losses.

Here is the URL.

Forex - the $250,000 balance election

This election allows gains and losses arising in respect of transactions on certain low balance bank and credit card foreign currency accounts to be disregarded. http://ato.gov.au/distributor.asp?do...tent/34043.htm
Published: 15 Oct 2003

It can result in a lot of tax saved or cause tax to be paid.

The URL starts off as follows:

Forex - the $250,000 balance election

The ordinary operation of the measures is that deposits to and withdrawals from foreign currency denominated bank accounts, where a gain or loss arises from a currency exchange rate fluctuation, give rise to a gain or loss that is realised under the measures. Withdrawals from an account with a credit balance will also generally have a consequence under the Capital Gains Tax provisions.

However, this election broadly enables taxpayers to disregard certain foreign currency gains and losses on certain foreign currency denominated bank accounts and credit card accounts with balances below a specified limit.

An election can be made in relation to a qualifying forex account. A qualifying forex account is an account held (in Australia) with a bank or (overseas) with a bank or similar institution, denominated in a foreign currency. The account must be a credit card account, or an account held for the primary purpose of facilitating transactions.

A taxpayer can elect, in writing, in relation to any number of accounts. An election can be varied, in writing, by adding or removing one or more qualifying forex accounts. Removing an account or withdrawing an election does not prevent a fresh election being made in relation the same account at a later time.

An election applies in relation to a particular account from when it is made (but see More information about elections) and continues in force in relation to that account until:

the taxpayer ceases to hold the account or
the account ceases to be a qualifying forex account or
the election is varied by removing the account or
the election is withdrawn.

This one is a gem of legislation.

Cheers

Wol

Looks pretty straightforward. All you have to do is hire Smith Barney for a couple of years to work out what the **** that little lot means to the man on the Clapham omnibus and Bob's your uncle.

Makes you realise that politicians are politicians 'cos they can't do anything else!

Alan Collett

Here are the salient words:

"A qualifying forex account is an account held (in Australia) with a bank or (overseas) with a bank or similar institution, denominated in a foreign currency."

Most migrants to Australia I have encountered are considering retaining funds in a UK£ bank account located in the UK, which means that for most the election is not available. There may therefore be merit in arranging a UK£ account with an Australian bank if one wishes to retain UK£'s in anticipation of an improvement in the exchange rate (from the £ perspective).

Best regards.

Wol

>>Here are the salient words:

"A qualifying forex account is an account held (in Australia) with a bank or (overseas) with a bank or similar institution, denominated in a foreign currency."

Most migrants to Australia I have encountered are considering retaining funds in a UK£ bank account located in the UK, which means that for most the election is not available. There may therefore be merit in arranging a UK£ account with an Australian bank if one wishes to retain UK£'s in anticipation of an improvement in the exchange rate (from the £ perspective).<<

The wording does indicate, because of the (overseas), that UK institutions ARE included if you read the sentence as properly constructed English. A comma after the first "bank" would have helped though!

Of more interest is the heading at the top of the ATO page "Large Corporates and Multinationals", implying that this applies to them and not to individuals.

gld

This legislation does affect individuals - its not just limited to corporates - the man in the street is affected.

Opinion has been sought on this legislation by the Montfort International team and the legal opinion from Australia confirms the teams research. The opinion was not cheap - even though it was a fixed price contract. There are significant tax issues. We strongly advise anyone reading this thread to look carefully at this legislation and take advice as to how they are affected.

We appointed a leading Australian Tax Barrister based in Wentworth Chambers in Sydney - the brief given certainly caught him by surprise, he thought it was an easy answer, it wasn't. Thank-goodness we got a fixed price opinion.

It is not straightforward - in any shape way or form.

Already the opinion given has caused us to recommend definitive election policies as set down by this legislation - having naturally calculated through our tax programme the tax saving \ liability.

The brief was drafted by Australia's leading UK based Australian trained Chartered Accountant - former Director of International Tax of one of the world's largest tax firms - now based in our offices in UK.

The opportunities and pitfalls this legislation opened up are considerable.

A UK bank account held in Australia - is not what it is cracked up to be as a means of dealing with this legislation.

This is another example of one of the very reasons why advice should be taken pre-departure - not post departure.

The brief and the opinion are available on a case by case basis and on pre-agreed terms.

Words which should now be considered are as follows as per ATO Web Site

This election allows a taxpayer to bring to account gains and losses in relation to a qualifying forex account on a retranslation basis. A qualifying forex account is an account or accounts held (in Australia) with a bank or (overseas) with a bank or similar institution, denominated in a foreign currency. The account must be a credit card account, or an account held for the primary purpose of facilitating transactions.