British Expats - Savings and Interest

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British Expats (https://britishexpats.com/forum/)

- Australia (https://britishexpats.com/forum/australia-54/)

- - Savings and Interest (https://britishexpats.com/forum/australia-54/savings-interest-701549/)

swans

Jan 21st 2011 3:25 pm

Re: Savings and Interest

Quote:

Originally Posted by tking (Post 9117075)

If I wanted to live off the interest of my savings, I'd want ALL the interest without tax being deducted to live off - maximising my income.

Then, I'd hopefully get a job and pay the tax owed on the interest at the end of the year.

Hopefully that's a bit clearer - as it's not against the law to withold your tax file number.

Correct,it is not against the law to withold your TFN,but if you do not give it then you are taxed at the highest rate + medicare levy.The bank will withold that money and you would need to claim it back at the end of the tax year.

Geordie downunder

swans

Jan 21st 2011 3:50 pm

Re: Savings and Interest

Quote:

Originally Posted by Grayling (Post 9117117)

Agree

It is a tough one really.

I don't like the idea of the ATO holding on to my money but then I don't like paying the annual bill either.

Psychologically I can see that having a rebate each year must seem the best but I can't decide if it actually is.

Perhaps you are looking at it the wrong way.You have the use of the tax money for the full year.Leave it in the bank and get interest on it.

Thus, say your tax bill is 10K,at 6% you will get interest of $600 for the year.At the end of the year you will pay $180 in tax leaving you $420 better off simply by having use of that money.

Unless laws have changed and you do not have the lump sum you can make weekly or monthly PAYG payments just as an employee is taxed.

The best way to earn money in OZ is through dividend payments,max tax 15% +medicare levy,or CGT,max tax 22.5% + medicare levy.

geordie downunder

spottydog

Jan 21st 2011 8:47 pm

Re: Savings and Interest

Quote:

Originally Posted by tking (Post 9116956)

Also, if you give them your Tax File Number they will take interest immediately (i.e. not give you your $6K tax-free allowance). So personally I'd keep the TFN and pay the tax at the end of the year!

If you don't give them your TFN withholding tax applies (which I think is around 40%) whereas if you give them your TFN they can pay you all your interest then you declare the interest received on your tax return at the end of the year and pay the tax then.

if you are living in Australia definitely best to get your TFN to the savings provider asap to reduce the amount of tax withheld.

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