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Tax question on funds brought in from outside Aus

Tax question on funds brought in from outside Aus

Old Jul 4th 2008, 4:19 pm
  #1  
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Default Tax question on funds brought in from outside Aus

I have a question for those tax boffs out there....

If we have investments outside of Australia that deliver an income. And if we pay taxes on that income in the country that they are in then bring it into Aus to help support our expenses.......do we pay tax on that income in Aus?

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Old Jul 4th 2008, 4:22 pm
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Default Re: Tax question on funds brought in from outside Aus

Originally Posted by Nix and Mike View Post
I have a question for those tax boffs out there....

If we have investments outside of Australia that deliver an income. And if we pay taxes on that income in the country that they are in then bring it into Aus to help support our expenses.......do we pay tax on that income in Aus?

Nix
Yes

If you are a permanent resident then you pay Australian tax on ALL your worldwide income.

If the investment is in the UK then you do not need to pay UK tax but will need to arrange this.

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Old Jul 4th 2008, 8:19 pm
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Default Re: Tax question on funds brought in from outside Aus

MMMmmmm. That is not good news.

On a related issue then......how do immigrants arrange to have their "wordly funds" transferred to Aus and avoid being taxed on it? It is obviously after tax income....?

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Old Jul 4th 2008, 9:25 pm
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Default Re: Tax question on funds brought in from outside Aus

If you're PR then you pay tax on the income but you get a credit for the tax already paid in the other country (assuming it's a country like the UK that has a double taxation agreement with Aus).

So, if the Aus tax is higher than the tax already paid then you pay the difference.
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Old Jul 4th 2008, 9:41 pm
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Default Re: Tax question on funds brought in from outside Aus

Originally Posted by MartinLuther View Post
If you're PR then you pay tax on the income but you get a credit for the tax already paid in the other country (assuming it's a country like the UK that has a double taxation agreement with Aus).

So, if the Aus tax is higher than the tax already paid then you pay the difference.
This really is an area that warrants specialist advice.....whether you opt (or indeed are able to opt) to pay tax in any particular country depends very much on your individual circumstances.

For instance: endowments are tax free in the Uk but are not in australia...nor are any FIF's beyond a certain limit.

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Old Jul 4th 2008, 9:52 pm
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Default Re: Tax question on funds brought in from outside Aus

Originally Posted by Grayling View Post
This really is an area that warrants specialist advice.....whether you opt (or indeed are able to opt) to pay tax in any particular country depends very much on your individual circumstances.

For instance: endowments are tax free in the Uk but are not in australia...nor are any FIF's beyond a certain limit.

G
I disagree that you need specialist advice. It doesn't take much to get up to speed on FIFs and Endowments.
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Old Jul 4th 2008, 9:57 pm
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Default Re: Tax question on funds brought in from outside Aus

Originally Posted by MartinLuther View Post
I disagree that you need specialist advice. It doesn't take much to get up to speed on FIFs and Endowments.
....but it does to get up to speed on the tax rules.

For instance.......your tax free allowance in the UK means bugger all as far as the ATO is concerned.....

Yet people still think they can 'hide' their ATO tax liabilities within their UK tax allowance.

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Old Jul 4th 2008, 10:07 pm
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Default Re: Tax question on funds brought in from outside Aus

Originally Posted by Grayling View Post
....but it does to get up to speed on the tax rules.

For instance.......your tax free allowance in the UK means bugger all as far as the ATO is concerned.....

Yet people still think they can 'hide' their ATO tax liabilities within their UK tax allowance.

G
And some people think that the tiered tax rates in Aus are strange (despite the UK doing the same thing). Just because there are some numpties out there doesn't mean everyone should go running to the tax advisor.
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Old Jul 4th 2008, 10:11 pm
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Default Re: Tax question on funds brought in from outside Aus

Originally Posted by MartinLuther View Post
And some people think that the tiered tax rates in Aus are strange (despite the UK doing the same thing). Just because there are some numpties out there doesn't mean everyone should go running to the tax advisor.
.....but most of the posters on this forum will have vastly different circumstances from each other....therefore an answer which is relevant to some is unlikely to be relevant for all.

The OP did not reveal the source or nature of their investments so a 'catch all' answer is not possible.

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Old Jul 4th 2008, 10:18 pm
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Default Re: Tax question on funds brought in from outside Aus

Originally Posted by Grayling View Post
.....but most of the posters on this forum will have vastly different circumstances from each other....therefore an answer which is relevant to some is unlikely to be relevant for all.

The OP did not reveal the source or nature of their investments so a 'catch all' answer is not possible.

G
So which bit of my answer do you think is wrong?
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Old Jul 4th 2008, 10:19 pm
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Default Re: Tax question on funds brought in from outside Aus

Originally Posted by MartinLuther View Post
So which bit of my answer do you think is wrong?
Which bit of mine is?
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Old Jul 4th 2008, 10:31 pm
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Default Re: Tax question on funds brought in from outside Aus

Originally Posted by Grayling View Post
Which bit of mine is?
Depending on the income then these could be wrong:
  • "If the investment is in the UK then you do not need to pay UK tax but will need to arrange this."
  • "This really is an area that warrants specialist advice"

Don't you just hate it when you bat back the same question instead of an answer and the other person answers it
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Old Jul 4th 2008, 10:39 pm
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Default Re: Tax question on funds brought in from outside Aus

Originally Posted by MartinLuther View Post
Depending on the income then these could be wrong:
  • "If the investment is in the UK then you do not need to pay UK tax but will need to arrange this."
  • "This really is an area that warrants specialist advice"

Don't you just hate it when you bat back the same question instead of an answer and the other person answers it

Depending on the income then you could be wrong as well

You can not pay tax on ISA's etc in the UK as they are Tax free there but are not in Australia.......touche'.

Rental income from UK property will be taxed in Australia...despite your UK tax allowance.

Credits are only available for tax actually paid.....you can not opt to claim your tax free allowance in both countries.

This discussion demonstrates that specialist advice is necessary in some (many/most) cases.

G

Last edited by Grayling; Jul 4th 2008 at 10:42 pm.
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Old Jul 4th 2008, 11:02 pm
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Default Re: Tax question on funds brought in from outside Aus

Originally Posted by Grayling View Post
Depending on the income then you could be wrong as well
Give me an example then!

Originally Posted by Grayling View Post
You can not pay tax on ISA's etc in the UK as they are Tax free there but are not in Australia.......touche'.
I said that you pay tax in Aus on the income but you get credit for tax already paid. In this case you have to pay Aus tax on the income and you get no credit as you've paid no UK tax. I got that right then!

If you want to cross swords, at least argue against what I said not what you make up!

Originally Posted by Grayling View Post
Rental income from UK property will be taxed in Australia...despite your UK tax allowance.
This proves your point ("If the investment is in the UK then you do not need to pay UK tax but will need to arrange this") wrong, however it does not prove my point wrong. If the Aus tax on the UK rental income is greater than the UK tax already paid then you pay the difference. If your UK allowance means that you pay no UK tax then you still pay Aus tax on the income and have no UK tax credit. The UK allowance affects how much UK tax you pay (and thus how much credit you get) but does not affect how much the Aus tax is. I got that right then!

Originally Posted by Grayling View Post
Credits are only available for tax actually paid.....you can not opt to claim your tax free allowance in both countries.
The first part is exactly what I said – no need to repeat it back to me. I made no allusion to the second part – that’s just your misinterpretation. I got that right then!

Originally Posted by Grayling View Post
This discussion demonstrates that specialist advice is necessary in some (many/most) cases.

G
This clearly demonstrates that you may need specialist advice. It does not prove that everyone needs specialist tax advice.

For the cases you have given (ISAs and Rental income) specialist advice would only be required in a limited number of cases. And unfortunately in these limited cases there's a large possibility that the specialist will get it wrong too.

Last edited by MartinLuther; Jul 4th 2008 at 11:46 pm.
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Old Jul 5th 2008, 8:35 am
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Default Re: Tax question on funds brought in from outside Aus

How many angels can dance on a pinhead?

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