flying dutchman

Hi,
My partner and I are claiming 5 additional points by depositing the $100K migration bond and I was wondering what the tax position would be once we get asked for it.

I am opening an HSBC online account in Oz to collect the interest and understand that as a non-resident I will have to pay a witholding tax.

Once a resident, I believe I can get a tax file number online - which tax rate would be better - one where i do have a tax number (but still reside in the UK), or one where I don't?

Thanks

Alan Collett

- If you don't quote a TFN once you have moved to Australia you can find that interest is paid after deducting the highest rate of tax (plus the Medicare Levy) = 48.5%.

- Where your interest is taxed will be a function of your tax residency, not where your bank account is based => interest from an Australian deposit is not assessable in Australia if you are not tax resident there, but is subject to the 10% withholding tax given that you are tax resident in the UK. This same interest is then (probably) taxable in the UK, with credit given for the 10% tax already suffered.

Hope this helps.

flying dutchman

- Where your interest is taxed will be a function of your tax residency, not where your bank account is based => interest from an Australian deposit is not assessable in Australia if you are not tax resident there, but is subject to the 10% withholding tax given that you are tax resident in the UK. This same interest is then (probably) taxable in the UK, with credit given for the 10% tax already suffered.

Hope this helps. [/QUOTE]

Thanks Alan,
So, the interest from the bond cannot be paid into an australian bank account?

My intention was to leave the money building up in Australia while still in the UK and then access it once living there.

Is it still worth getting a TFN whilst living in the (and having the bond deposited?

Cheers

Alan Collett

- Yes, it can, but it doesn't affect your tax position in the UK (I'm assuming here that you are not non-UK domiciled for income tax purposes).

- I don't see the point in obtaining a TFN until you have income that is assessable in Australia. Indeed, you might not be able to obtain one before then.


Best regards.



Thanks Alan,
So, the interest from the bond cannot be paid into an australian bank account?

My intention was to leave the money building up in Australia while still in the UK and then access it once living there.

Is it still worth getting a TFN whilst living in the (and having the bond deposited?

Cheers [/QUOTE]

Thunder Ace

flying dutchman <member12327@british_expats.com> wrote in message news:<[email protected]>...
    > - Where your interest is taxed will be a function of your tax residency,
    > not where your bank account is based => interest from an Australian
    > deposit is not assessable in Australia if you are not tax resident
    > there, but is subject to the 10% withholding tax given that you are
    > tax resident in the UK. This same interest is then (probably) taxable
    > in the UK, with credit given for the 10% tax already suffered.
    >
    > > Hope
    > this helps.
    >
    > Thanks Alan,
    > So, the interest from the bond
    > cannot be paid into an australian bank account?
    >
    > My intention was to
    > leave the money building up in Australia while still in the UK and
    > then access it once living there.
    >
    > Is it still worth getting a TFN
    > whilst living in the (and having the bond deposited?

You might not be able to get a TFN if you are not physically in Oz. I
applied for one when I went out to validate my visa. I didn't get the
TFN because the tax office checked with immigration and could see that
I had left the country again. The wrote to and said you must be in
the country to get the TFN.

TA

    >
    > Cheers

Jaj

It's a number of years ago now, but I applied for a TFN on a validation
visit, gave them my overseas address and got the TFN in the post a month
or so later.

It's not normally necessary to apply for a TFN until you move proper,
and some professionals advise against it.

Jeremy

Thunder Ace wrote:

    > You might not be able to get a TFN if you are not physically in Oz. I
    > applied for one when I went out to validate my visa. I didn't get the
    > TFN because the tax office checked with immigration and could see that
    > I had left the country again. The wrote to and said you must be in
    > the country to get the TFN.
    >
    > TA
    >
    >
    >>Cheers

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This is not intended to be legal advice in any jurisdiction