Australian share broker

[BaanOz]

Hi,

 

I'm just looking at brokers at the moment and started registering for SelfWealth. Near the end of the application it had requirements including "must be an Australian resident for tax" so canceled.

Just looked at CMC Markets and sent them an email asking if I was a non-resident and this was the reply:
"Please note you can set up an account if you are a resident of Australia. Depending on the country of where you are moving we may not have jurisdiction to have a trading account operation in a particular country so the account may need to be closed in the future".

I also see on the Comsec website here: https://www.commsec.com.au/support/frequently-asked-questions/62.html
"Some restrictions apply to applicants from different jurisdictions depending on various legal and regulatory requirements".

Wondering if anyone has had a problem becoming a non-resident with regards to their broker and if you can recommend any please?
Thanks.

Edited November 24, 2017 by BaanOz

[Oxx]

Legislation globally is making it difficult for non-residents to open accounts in their native country.  The easiest solution is to open an account with a broker which services expats, such as Internaxx (Luxembourg) or Saxo (Singapore), both of which give access to ASX.  However, the commission on trades will be somewhat higher than a bargain basement broker.

[BaanOz]

Thanks Oxx,

 

Will have a look at those.

I was thinking Interactive Brokers might be OK too but was hoping to get one where shares are chess sponsored.

[BaanOz]

By the way, CMC Markets just confirmed...

 

"Unfortunately Thailand is not on the list.  We will not be able to establish the account".

 

[ELVIS123456]

Australian resident for tax, means a very different thing than being an Australian resident. Suggest you contact ATO and ask what is required to be classified as a resident for tax purposes. Commsec etc cant pay money into a foreign bank account and/or to a person who does not pay tax/duties in Aust.  There are many people 'temporarily' living overseas that are still a resident for tax purposes.  Ask ATO what you would have to do to could become a tax resident (address, bank account, voting, visits, etc) , as you dont want to use a Singapore based broker and pay duties/taxes there - which means ATO gets nothing. 

[Oxx]

1 minute ago, ELVIS123456 said:

you dont want to use a Singapore based broker and pay duties/taxes there - which means ATO gets nothing. 

 

Uh, using a Singapore broker you don't pay any duties or tax there.  End of.

[BaanOz]

I'm not sure what the difference is with using an overseas broker.

I've used Interactive Brokers for years including before they setup a formal Australian operation. I've always paid tax on any Austalian shares bought.

Anyway, I've contacted Saxo Australia to see what they say. I suspect they might be OK being more international operation compared to the others I've tried but if negative will try Singapore. Their fees look OK too :)
Thanks.

Edited November 24, 2017 by BaanOz

[BaanOz]

8 hours ago, ELVIS123456 said:

Australian resident for tax, means a very different thing than being an Australian resident. Suggest you contact ATO and ask what is required to be classified as a resident for tax purposes. Commsec etc cant pay money into a foreign bank account and/or to a person who does not pay tax/duties in Aust.

Thanks. I'm currently an Australian resident but looking for a broker that doesn't have a problem with a non resident for when that time (>183 days in Thailand) comes for me :)

[ELVIS123456]

5 hours ago, BaanOz said:

Thanks. I'm currently an Australian resident but looking for a broker that doesn't have a problem with a non resident for when that time (>183 days in Thailand) comes for me :)

Cheers Baan. Keep in mind that the CLink definition of a non-resident for welfare purposes (183 days etc) is not the same as ATO's definition for tax purposes.  ATO takes a far more 'open' view about things - try using this online test - you change change answers to get different outcomes.  When it means ATO/ASIC will not get any taxes/duties if you are not a tax resident, then they will rule you are still a tax resident (although depends on the amounts involved). One 'basic' I have noticed is that after a 2 year absence, then they can get a bit 'harder' on the test (if there is nothing in it for them).   There is no definitive set of rules, and often you will get 'we cannot determine your residency at this time' - bit of a fluid target - you need to 'play the game'. Keep an address (relative?), keep bank accounts, keep voting, keep visiting (once per 2 years min), and you should be OK. 

https://www.ato.gov.au/Calculators-and-tools/Host/?anchor=DORSLA&anchor=DORSLA/questions#DORSLA/questions

 

[BaanOz]

On 25/11/2017 at 2:27 AM, ELVIS123456 said:

try using this online test - you change change answers to get different outcomes.

Yes tried that before and same result "non-resident for tax" and is due mainly to bringing all family and not moving around. No plans to do any travel so no stamps in passport to prove it.
 

On 25/11/2017 at 2:27 AM, ELVIS123456 said:

ATO/ASIC will not get any taxes/duties if you are not a tax resident

Having shares and $'s in Australia means they still will.
ie: for me, bank interest and any dividends on shares not 100% franked.

I could take it out of Australia but prefer the guarantees on bank accounts.

I'm not really concerned about becoming a non-resident for tax but want to know the rules :)

Anyway, will see if Saxo accepts non-residents. Have also asked Interactive Brokers and assume they will be OK but as mentioned prefer one that has Chess sponorship (in case broker goes belly up). That goes for the Singapore Saxo too.

[4MyEgo]

On 25/11/2017 at 7:37 AM, BaanOz said:

Thanks. I'm currently an Australian resident but looking for a broker that doesn't have a problem with a non resident for when that time (>183 days in Thailand) comes for me :)

BaanOz I use an Australian broker in a large firm, who use the Comsec platform, and when I set up my account as a "non-resident" there was no issues, all that was required of me was certified copies of an Australian passport, Drivers licence and Medicare card, plus my overseas address, i.e. this was all carried out after my 12 month term deposits matured, i.e. I wanted to see how things went for a year before I invested in the ASX and have no regrets as I have full control, i.e. I instruct the broker, or he advises, I say yey and ney, we work well.

 

The process was as easy as doing it if I was in Oz, now there are certain funds you don't want to get into because they tax you as a foreign resident, i.e. managed trust funds for one when I did the research, the tax turned me right off for a second lot of funds that I had, although the yield was double to what I "would make" as an individual non resident, the tax and paperwork that I would have to do was a no no for me, that and of course the higher the yield, the higher the risk.

 

I can't understand why you would be having dramas, if you have the above and a bank account set up in Australia, should be a piece of cake.

 

Should you still be having troubles I can put you onto my broker and you two can sort it, however best PM me for the details.

Edited November 28, 2017 by 4MyEgo

[4MyEgo]

On 26/11/2017 at 2:13 PM, BaanOz said:

Yes tried that before and same result "non-resident for tax" and is due mainly to bringing all family and not moving around. No plans to do any travel so no stamps in passport to prove it.

That was the clincher for me also, kids going to a school in Thailand, most guys here do not have kids going to schools here, I also have a daughter in Oz (adult) and my mum, would still have Buckley's trying to retain residency, suffice to say, it works to my advantage not having to pay tax on fully franked shares and no capital gains tax.

 

If you want to buy unfranked shares then just pay the tax on them, for me its the paperwork that keeps me away from them, after all, when one retires, the only paper one will want to use is the paper in the bathroom, along with the water blaster 555  

Edited November 28, 2017 by 4MyEgo

[BaanOz]

19 hours ago, 4MyEgo said:

I can't understand why you would be having dramas, if you have the above and a bank account set up in Australia, should be a piece of cake.

Some brokers will just not allow non residents. I didn't know this at all, so it ends up I can't choose the top of my list.

Anyway, your right. I've spoken to Comsec and they seem fine with having an overseas address. Good, think I'll go with them.

Just wondering, do you have an Australian address that your Chess Holding Statements are sent. What do you do about those?

Thanks.

Edit: by the way I mentioned Saxo Australia above. They are fine too but not Chess sponsored.

 

Edited November 29, 2017 by BaanOz

[4MyEgo]

2 hours ago, BaanOz said:

Some brokers will just not allow non residents. I didn't know this at all, so it ends up I can't choose the top of my list.

Anyway, your right. I've spoken to Comsec and they seem fine with having an overseas address. Good, think I'll go with them.

Just wondering, do you have an Australian address that your Chess Holding Statements are sent. What do you do about those?

Thanks.

Edit: by the way I mentioned Saxo Australia above. They are fine too but not Chess sponsored.

 

Yes I do have a an Australian residential address but going to have to change that now I suppose as I just sold my mums place as she is now in a nursing home, although the mail gets sent to my PO box and is picked by a friend.

 

So its always good to have a PO box and a friend to collect once a week/fortnight for you, they get used to the crap we get emailed each time we make do a buysell so they put those aside, anything else that they feel is important they take a photo and send on LINE, or scan.

 

Also probably best you do it all before you leave, i.e. with Comsec and you can always update your overseas address later.

Edited November 29, 2017 by 4MyEgo

[ELVIS123456]

3 hours ago, 4MyEgo said:

Yes I do have a an Australian residential address but going to have to change that now I suppose as I just sold my mums place as she is now in a nursing home, although the mail gets sent to my PO box and is picked by a friend.

 

So its always good to have a PO box and a friend to collect once a week/fortnight for you, they get used to the crap we get emailed each time we make do a buysell so they put those aside, anything else that they feel is important they take a photo and send on LINE, or scan.

 

Also probably best you do it all before you leave, i.e. with Comsec and you can always update your overseas address later.

I rented a room from a relative for a peppercorn fee - we drew up an REIA contract.  Used the rental contract to 'register' that address with Govt agencies (driving licence, Voting, CLink, Medicare etc) and then used the new Govt credentials to register the address with banks, insurance, etc. Kept a post office box in the same town, and all mail was delivered there, and my relative  checked it (and used it for free).  Anything important was scanned and emailed to me in Thailand. Obviously it was set up before I left, but it could also be done in a few weeks during a return visit. Easiest way to maintain a residence in Aust, if you dont want to own a place and pay rates etc. But of course you must return 'home' to Aust at least once every 2 years - preferably every year. 

 

[BaanOz]

On 11/28/2017 at 11:12 PM, 4MyEgo said:

BaanOz I use an Australian broker in a large firm, who use the Comsec platform.

 

Hope you don't mind all the questions!

 

One more, do you have the Comsec CDIA (Commonwealth Direct Investment Account - preferred cash management account for ComSec ) linked to your trading?

Wondering if you arranged the 10% withholding tax to be taken off any interest earned in that account?

Thanks.

Edited November 30, 2017 by BaanOz

[4MyEgo]

6 minutes ago, BaanOz said:

 

Hope you don't mind all the questions! :)

 

One more, do you have the Comsec CDIA (Commonwealth Direct Investment Account - preferred cash management account for ComSec ) linked to your trading?

Wondering if you arranged the 10% withholding tax to be taken off any interest earned in that account?

Thanks.

I don't mind all the questions at all.

 

I do have an account linked to Comsec, and it earns something like 1.65% for anything sitting in there while I am trading in and out, however I don't access that account as I have a different account which has enough funds in it for me to survive off.

 

Now I have to be honest, everything was set up by the broker, and if he overlooked it, so did I, oh dear, oh my, my bad 555

Edited November 30, 2017 by 4MyEgo

[steven100]

I was reading a topic a couple of days ago where one TV member was saying he was Forex trading and he said he was doubling his money every month,  hard to believe ...........

I can't find the topic again and I forget the poster ....

[BaanOz]

18 hours ago, 4MyEgo said:

if he overlooked it, so did I, oh dear, oh my, my bad 555

 

Haha!
I was just wondering if that CDIA account is fine to get the tax taken out. I've asked Comsec but they have told me to call the bank accountant.

[BaanOz]

18 hours ago, steven100 said:

I was reading a topic a couple of days ago where one TV member was saying he was Forex trading and he said he was doubling his money every month,  hard to believe ...........

I can't find the topic again and I forget the poster ....

 

Yeah, I found it.
He must be young with plenty of working life left.

I've a much lower risk threshold :)

[BaanOz]

On 11/29/2017 at 8:53 PM, 4MyEgo said:

Yes I do have a an Australian residential address but going to have to change that now

I haven't looked into this much but this might be another option, a service that scans mail for you:
http://www.aussiemailman.com.au/
http://www.hotsnail.com.au/

[4MyEgo]

25 minutes ago, BaanOz said:

I haven't looked into this much but this might be another option, a service that scans mail for you:
http://www.aussiemailman.com.au/
http://www.hotsnail.com.au/

Thanks for passing that on, worth looking into, as I pay about $120 a year for my PO Box and have to rely on my wife's Thai friend who, if you know Thai's, goes in Thai time 555 

[4MyEgo]

7 hours ago, BaanOz said:

 

Haha!
I was just wondering if that CDIA account is fine to get the tax taken out. I've asked Comsec but they have told me to call the bank accountant.

I would call that a pathetic response, bank staff should be able to handle such an enquiry.

 

I remember with the other bank I am with and its not an Aussie bank, they always handle my enquiry at the coalface, leaving the others for dead.

[4MyEgo]

On 30/11/2017 at 1:14 PM, steven100 said:

I was reading a topic a couple of days ago where one TV member was saying he was Forex trading and he said he was doubling his money every month,  hard to believe ...........

I can't find the topic again and I forget the poster ....

We have a slang word for guys like that, starts with a W and ends with an R, or a similar word which is 6 2 1 half dozen the other, starting with a T and ending with an R again.

 

The higher the risk, the higher the loss, i.e. if you have say $500k and invested in low risk stocks living off dividends and doing some trading, a minimum of 9.6% return (tax free) should be achievable, but you have to be on the ball, day in, day out and everyone knows living on 100k baht per month in Thailand is very doable, especially if you have zero debts, and that beats the crap out of working back in the old country and paying about that amount in bloody tax 555 

[BaanOz]

16 hours ago, 4MyEgo said:

I would call that a pathetic response, bank staff should be able to handle such an enquiry.

Yeah Comsec wouldn't answer but Combank did:

"Once you have updated to your overseas address, the bank is required to deduct Non Resident Withholding Tax (NRWT) and pay it to the Australian Taxation Office (ATO). We are required by law to deduct tax from any interest that you earn on your account. The current Non Resident Withholding Tax (NRWT) rate is 10% if interest earned is above $10.00".

For the record as a non resident these brokers will not accept you:
Interactive Brokers (with an Australian account)
Selfwealth
Bell Direct
CMC Markets

So far have found only Comsec and Saxo will accept.

Edited December 1, 2017 by BaanOz

[BaanOz]

17 hours ago, 4MyEgo said:

The higher the risk, the higher the loss, i.e. if you have say $500k and invested in low risk stocks living off dividends and doing some trading, a minimum of 9.6% return (tax free) should be achievable

Yes say 4% average dividend (fullly franked) plus the rest capital gain, both tax free.

The only thing that capital gain is variable and could be more or less (or negative) some years so a backup to cover those years.

Here's not a bad site for comparing dividends:
http://dividends.com.au/yield-finder/

Edited December 1, 2017 by BaanOz

[4MyEgo]

5 hours ago, BaanOz said:

Yeah Comsec wouldn't answer but Combank did:

"Once you have updated to your overseas address, the bank is required to deduct Non Resident Withholding Tax (NRWT) and pay it to the Australian Taxation Office (ATO). We are required by law to deduct tax from any interest that you earn on your account. The current Non Resident Withholding Tax (NRWT) rate is 10% if interest earned is above $10.00".

For the record as a non resident these brokers will not accept you:
Interactive Brokers (with an Australian account)
Selfwealth
Bell Direct
CMC Markets

So far have found only Comsec and Saxo will accept.

Thanks for the heads up, will now how to provide them with my overseas address, if the broker hasn't already done so, truth of the matter is, I don't even know where my Comsec account is, I have the details, but have never accessed it online, as I have said before, I have other funds that I survive off, but best I pull my finger out so to speak so as to make sure that I comply, and if it hasn't been sorted, work it out and put that amount in when I do my tax return and pay the difference, which won't break the bank, but as I said above, best get it sorted, because being retired, no not retarded, makes one lazy 555

 

[4MyEgo]

5 hours ago, BaanOz said:

Yes say 4% average dividend (fullly franked) plus the rest capital gain, both tax free.

The only thing that capital gain is variable and could be more or less (or negative) some years so a backup to cover those years.

Here's not a bad site for comparing dividends:
http://dividends.com.au/yield-finder/

Spot on, but I think you should be able to get more than 4%, i.e. between 5% - 6% and as you don't pay tax on the dividends therefore it works out being more in % terms.

 

I do have that site thanks.

 

I find that I want higher returns, although at low risk, so I won't sit just on just dividends, although 90% of my funds are in for the dividends and capital gains, but I will throw some coin into stocks when they are down and flick them when they go up, a couple of good ones they I have made coin on of late are BIN, which has made me some nice % returns, no dividends, but when it drops, it drops, and when it climbs, it climbs, i.e. I have bought in at $2.02 and sold out at $2.18, then bought back in a couple of days later at $2.10 to watch it climb to $2.40.

 

Another is EVN it pays a dividend, but when the gold market dips, always a good time to buy in, SAR is another.

 

I also bought ALL a couple of days ago and should climb a couple of $ in the short term, so keep an eye on the above and make your own decision.

 

By doing this you can make your returns double, I have found.

[BaanOz]

20 hours ago, 4MyEgo said:

being retired, no not retarded, makes one lazy 555

LOL ...looking forward to being lazy :D
 

20 hours ago, 4MyEgo said:

I think you should be able to get more than 4% , i.e. between 5% - 6%

Yes, was being a bit too conservative there!

 

20 hours ago, 4MyEgo said:

you don't pay tax on the dividends therefore it works out being more in % terms.

Yes, get the full dividend but did you mean more compared to a resident who pays tax?

As a resident you would get a rebate if your income was low but pay tax if you are on a higher tax rate (higher then company tax). I don't really see a benefit being a non resident for dividends unless you were on the highest tax rate as a resident, where you would have to pay tax. I'm no where near the highest tax rate!

These rates are out of date but an example as a resident. Top tax rate gets 53.5c.



I think the biggest benefit (compared to a resident) is what your doing boosting capital gains and paying zero tax! :)

 

[BaanOz]

On 30/11/2017 at 1:36 PM, ELVIS123456 said:

I rented a room from a relative for a peppercorn fee - we drew up an REIA contract. 

Never thought to do this but I'd be interested in a comparison non vs resident as far as tax goes.

 

Maybe it IS worth a peppercorn fee to rent a room in Sydney :D

I'll start with this as I think a fair amount, about Baht 100,000/month:
 

On 01/12/2017 at 3:57 AM, 4MyEgo said:

$500k and invested in low risk stocks living off dividends and doing some trading, a minimum of 9.6% return

Actually, I'll just make it 50k income with dividends 5% return and capital gain 5% return.

Edited December 3, 2017 by BaanOz