All Aussie Related Stuff (excluding the old age pension)

[stud858]

2 minutes ago, Mister T said:

On advice from a lawyer and accountant, I transferred ownership of my properties to my kids several years ago. No GST was payable as I owned them pre 1983, I still use the house as my residential address.

I'm curious.

We're all the fees and taxes the same as if you sold it to a stranger? 

Is ok if you don't answer.  Getting into personal info is optional. 

 

[Mister T]

1 minute ago, stud858 said:

We're all the fees and taxes the same as if you sold it to a stranger

Same, from memory it was $4k all up.

[4MyEgo]

7 minutes ago, Mister T said:

On advice from a lawyer and accountant, I transferred ownership of my properties to my kids several years ago. No GST was payable as I owned them pre 1983, I still use the house as my residential address.

Now that's what I call good advice and I am sure you meant CGT as opposed to GST which does not apply to residential dwellings. The only thing you would have had to fork out would have been the stamp duty on the transfers, but I am sure the kids picked up that tab and any CGT if any, but as you say they were purchased pre 20 September 1986,so there wouldn't be any CGT on the investment property/s, and you have given your kids a good head start in life with your generosity.

[stud858]

1 minute ago, Mister T said:

Same, from memory it was $4k all up.

Not fair.  Is it? But the pollies need their tailored suits.

[stud858]

Some people buy their homes in their kids names from the get go, but you are taking a risk that your kids will turn out sensible. 

 

[4MyEgo]

2 minutes ago, stud858 said:

Not fair.  Is it? But the pollies need their tailored suits.

Interfamily transfers attract the same stamp duty as a buyer at arm's length, the only difference when selling to family, a qualified property valuer has to be engaged to provide the OSR Office of State Revenue department with a stamp duty valuation, and if he has balls will go lower than market to save his client the extra $'s in values, e.g. if it's worth 1 mil, stamp duty in NSW for example is $40k, if he put $900k on it he saves his client $4,000 that he would have had to pay extra at a valuation on a mil.

 

Sometimes it's not possible to go low because of sales evidence, so there is a little risk involved, but generally speaking in a downturning market shouldn't be a problem.

[stud858]

1 minute ago, 4MyEgo said:

Interfamily transfers attract the same stamp duty as a buyer at arm's length, the only difference when selling to family, a qualified property valuer has to be engaged to provide the OSR Office of State Revenue department with a stamp duty valuation, and if he has balls will go lower than market to save his client the extra $'s in values, e.g. if it's worth 1 mil, stamp duty in NSW for example is $40k, if he put $900k on it he saves his client $4,000 that he would have had to pay extra at a valuation on a mil.

 

Sometimes it's not possible to go low because of sales evidence, so there is a little risk involved, but generally speaking in a downturning market shouldn't be a problem.

I was told here in Thailand a 500k baht condo was considered as 900k by land office. So,  they wear tailored suits too?

[4MyEgo]

3 minutes ago, stud858 said:

Some people buy their homes in their kids names from the get go, but you are taking a risk that your kids will turn out sensible. 

 

They can always put a Caveat on the property that the kids owe them money, with the kids signing a mortgage document to the parents and they are put on title as 2nd mortgagee.

 

Parents who used to transfer their properties to their kids used to do this on advice from their solicitors, I have a mate who's dad gave him a property paid out right for his wedding, but his son signed a mortgage document that he owed his dad the value of the house, i.e. 100% and his dad was on title as 1st mortgagee, like the banks are, this was incase his new bride decided to give him the flick after a kid or two and take 75% of the worth of the house, smart man his father, fortunately the couple are still together with two adult daughters, but I have seen some cases where the parents life savings went down the gurgler, getting off the topic though.

[4MyEgo]

1 minute ago, stud858 said:

I was told here in Thailand a 500k baht condo was considered as 900k by land office. So,  they wear tailored suits too?

I know nothing about Thai values or the stamp duty office, that's because I personally wouldn't buy a property in Thailand unless it was land, and we know farangs cannot own land unless it's through a Thai company which holds 51%

[stud858]

16 minutes ago, 4MyEgo said:

They can always put a Caveat on the property that the kids owe them money, with the kids signing a mortgage document to the parents and they are put on title as 2nd mortgagee.

 

Parents who used to transfer their properties to their kids used to do this on advice from their solicitors, I have a mate who's dad gave him a property paid out right for his wedding, but his son signed a mortgage document that he owed his dad the value of the house, i.e. 100% and his dad was on title as 1st mortgagee, like the banks are, this was incase his new bride decided to give him the flick after a kid or two and take 75% of the worth of the house, smart man his father, fortunately the couple are still together with two adult daughters, but I have seen some cases where the parents life savings went down the gurgler, getting off the topic though.

Good to know that.  Still there is the emotional toll as well.  I guess everybody is entitled to weigh up risk to benefit. I'm not having kids so easy decision for me. For those that have kids.  You are strong. 

[4MyEgo]

3 minutes ago, stud858 said:

Good to know that.  Still there is the emotional toll as well.  I guess everybody is entitled to weigh up risk to benefit. I'm not having kids so easy decision for me. For those that have kids.  You are strong. 

Yes one definitely has to way up risks, my kids will divide my assets up when I am gone, it will be easier than property as I have none, but not before I am gone as I wouldn't want to see any disappointments while I am alive, although we have raised them well enough to expect them to be sharp enough to know the difference between ones hard labour and peeing it up against the wall.

[4MyEgo]

1 hour ago, stud858 said:

This person has not been classed as a non resident because she had been away for 3 years. She has been classed as a non resident because she has set up an abode overseas and lived in it for more than 2 years years with proof that she can stay that long due to work commitments

 

It's not the same as say a retiring person to Thailand who can only be guaranteed stay in Thailand year by year.  Ie, temporary guest visa.who just may in future time stay longer but has every intention to return to their.abode in Australia that collects their mail, and stores there most valuable items there.that will consider it their only true safe normal ordinary and permanent address. 

 

The 183 rule has nothing to do with either case.

The ATO says does not apply. 

 

It's an interesting article, but in no way suggests if you spend more than 183 days or 5 years out of the country, then you automatically become a non resident.

 

 

This is what I mean about things not being cut and dry, if you remember, Bronwyn was classed as a non resident, that would have been from an old ruling, the link below shows a recent one which went in the opposite direction and wouldn't allow an xpat to be a non resident, even though he leased a fully furnished place for years, at the end rendering him a resident of Australia and taxing him according to his worldwide income, no doubt Harding who was working in a middle eastern country wasn't paying any tax as he was claiming to be a non resident a very interesting read.

 

https://www.step.org/news/court-ruling-makes-australian-non-residency-much-harder-maintain

[stud858]

2 minutes ago, 4MyEgo said:

This is what I mean about things not being cut and dry, if you remember, Bronwyn was classed as a non resident, that would have been from an old ruling, the link below shows a recent one which went in the opposite direction and wouldn't allow an xpat to be a non resident, even though he leased a fully furnished place for years, at the end rendering him a resident of Australia and taxing him according to his worldwide income, no doubt Harding who was working in a middle eastern country wasn't paying any tax as he was claiming to be a non resident a very interesting read.

 

https://www.step.org/news/court-ruling-makes-australian-non-residency-much-harder-maintain

Sure. Agreed. It's harder to prove non resident.  

Say for example there was a rule that I would lose residency for tax then I would be forced to go back to australia by my own decision so I could retain residency for tax. 

 

If I did that then as unemployed I would first jump on the unemployment benefit line.  Hardly what the government wants. 

[oznomad]

A further snippet on tips to be a tax non-resident.

 

In order to relinquish your Australian tax authorities, you need to prove to the tax-man that you no longer have ties to the country. The following are factors indicating non-resident status the commissioner will consider the following factors. 

There does not exist a set of laws that is set in stone, but (as if often the case) interpretations and precedent case law that determines residency. 

The following will most likely be considered: 

1. Intention 

2. Personal/Family/Social Ties 

3. Economic Ties 

4. Business Ties 

1. Intention 

Essentially, the totality of the circumstances surrounding your Australian tax residency based on your intended as well as actual length of stay in the overseas. An important aspect of this factor includes your intention (or non-intention) to return to Australia. 

Again, it should not be understated that your intention seems to be a key factor, spread across the other 3 factors: family, economic and business. 

For instance, if you decide to return regularly, particularly within a short period of departing Australia, then you may not pass this test. Or if you hadn’t intended to stay abroad, but just continued a vacation. 

Key Questions In Determining Your Tax Liability in Australia Based on “Intentions Factor”: 

• What date did your intention change, or even if you had a change your intentions? 

• Was the period you spent outside of Australia for a minimum period of two to three years or was it indefinite? 

• When and how often did you return to Australia and for what purpose? 

• What was the overall intention of the time spent outside of Australia? 

• Did you intend to make your permanent home at your new location, and develop your home to the equivalent of the one you left in Australia? 

2. Personal/Family/Social Ties 

Where your immediate family accompanies you to the new location, there is little difficulty in explaining to the Commissioner of Taxation that you permanently departed Australia (taken with the other tests). 

This being said, if your husband or wife needs to remain in or return to Australia for a period, you may have a reasonable argument if this is for a family/children’s educational commitments, but you’ll likely need to show cessation of residence independently from your spouse. 

Each taxpayer’s residence is determined separately by law, but it is more difficult to prove cessation of Australian tax residence in a situation where your spouse remains living in/returns to Australia, especially if your spouse lives in the family home. 

 

In general here are some points to follow: 

• Limit your trips to Australia as much as possible – especially during the first 12 months. An exception would be for trips necessary for work purposes. 

• If you leave the pets at a kennel in Australia, your intention to leave Australia indefinitely may be questionable. Consider taking family pets with you or giving them away. Sorry Fiddo! 

• Write letters or emails to your extended family, friends and work colleagues informing them of your intention to reside overseas and keep copies of such correspondence. Be sure to include the long term/permanent intention. 

• Inform your doctors and dentist, as well as your health fund, of your departure in writing and suspend your family health fund membership. 

• Stop accessing the Medicare system in Australia and avoid using Medicare benefits during any subsequent visits you make to Australia. You better not live off social benefits if you don’t pay taxes there! If you aren’t paying taxes in Australia, this is only right. Expat health insurance is better, cheaper and has better coverage anyway. 

• Join a library or a gym. Make sure to collect documentation of new memberships and find new, but equivalent, medical practitioners and educational institutions. 

• Take your personal belongings with you and sell any unneeded belongings. The idea is to indicate a desire to form a new home in the foreign location. If you use a sea freight to transport your belongings, make sure you keep that all important documentation. 

• Register as a non-resident voter on the Australian electoral roll. 

• Make sure to change your mailing address to a new overseas address for all mail where practicable. 

• Cancel your utilities and services, such as internet/cable/mobile phone accounts and set up new accounts in the new foreign location, with matching addresses of your new home. 

• If practical, attempt to obtain an appropriate driver’s license in your new location and consider not renewing your Australian driver’s license when it comes up for renewal. 

• If you do need to maintain any goods back home, such as antiques, you could arrange for long term storage and, in writing, advise the storage company of your intended long term absence. 

3. Economic Ties 

• Close any surplus bank accounts, credit card accounts and any subscriptions your might have. 

• You’ll have to pay taxes if you have money wired into your Aussie account, so it is best to set-up an offshore company and bank account where you’ve relocated to. Again: keep documentary evidence of account closures. 

• Open equivalent credit card accounts and bank accounts as possible in new location. 

• Get rid of cars and marine vessels, or transfer them out of your name. 

• Real Estate: sell it. You’ll be taxed at same rate if you are abroad. While you are at it, write to your real estate agent indicating your intention to leave Australia long term. Less assets equals more paper showing your intention. 

Bank and Brokerage Accounts You Maintain 

• Instruct, in writing, any banks with interest-bearing accounts of your non-resident status so that they deduct 10% withholding tax. 

• Instruct, in writing, share registrars of your non-resident status so that 15% withholding tax can be deducted from dividends. 

• If you have any domestic investment portfolios purchased through an Australian broker, you may want to close these based on sound investment advice. 

• If you need to keep these accounts open, at least have a new financial plan drawn up in your new location (documentation!) and maintain your Australia investments as only a portion of your portfolio. 

4. Business Ties 

• If you have a superannuation fund make sure that you inform them of your intended long term absence in writing and suspend contributions to the fund. 

• You could also write to professional associations where you are a member and advise them of your long term absence, whilst joining equivalent groups in your new location. 

• Consider continuing professional education in your new foreign location, which should be undertaken locally in preference to classes by correspondence. 

• Appoint a tax adviser in your new location to assist you with tax issues on income derived in your new location. 

 

[kevvy]

I see most people are talking about the Australian law .

Well I found this interesting about our government .

The Australian Government will provide an estimated $84.2 million in total ODA to Vietnam in 2018-19. This will include an estimated $58.4 million in bilateral funding to Vietnam managed by DFAT.

https://dfat.gov.au/geo/vietnam/development-assistance/Pages/development-assistance-in-vietnam.aspx

 

This makes me so sick and tired of this government and previous governments of Australia .. The lucky country..Our farmers are doing it hard and have for years , and yet the pollies think Vietnam is more important . The true blues are dying fast .

[moojar]

On 8/11/2018 at 2:05 PM, stud858 said:

The 183 rule is for someone like a Chinese man comes to live in Australia for 184 days. And intends to live and sets up abode.  He has no abode outside Australia then as he had been in Australia for over 183 days so he can be an Australia resident for tax. 

It would only affect an Australian if they became an immigrant of another country and set up abode there. Which is the debatable point. But not many Aussies are immigrants in Thailand. 

I think you may be confusing 'permanent resident' with 'resident of'.   If you live in Thailand you are a resident of Thailand.  Does not mean you are a permanent resident with any citizenship-type rights.

 

But how does the ATO prove 'set up an abode there' is an interesting point, especially if someone is renting in Thailand. 

[stud858]

2 minutes ago, moojar said:

I think you may be confusing 'permanent resident' with 'resident of'.   If you live in Thailand you are a resident of Thailand.  Does not mean you are a permanent resident with any citizenship-type rights.

 

But how does the ATO prove 'set up an abode there' is an interesting point, especially if someone is renting in Thailand. 

I've never stated someone living in Thailand is permanent.

The ATO defines these items fairly well. Live, reside, residency,  residency for tax purposes, constructive residency, abode, domicile, permanent, and usual are defined as their dictionary meanings on the ATO Site.

I agree with about your " live in Thailand" statement. . 

You need to apply for an immigrant visa/citizenship/ permanent residency, if you want the rights and  to be taken off the temporary guest list.

[moojar]

So, don't read the forum for a few days and there are pages and pages of ATO-resident argy bargy.  LOL.  

 

I called the ATO this morning.  Advice was apply for a private ruling.  

 

I have an investment property and will retire to Thailand in a couple of years.  Will still own our family home in Oz.  If the property market is still spiralling down then, I'll hang on to the investment property as well.  What the ATO guy on the phone told me:  

•  I'd be non-resident and pay tax at non-resident rates, with no tax-free threshold.  Not a showstopper, the investment property is more or less revenue neutral - can still claim all the regular deductions. 
•  CGT discount when I do sell will be calculated with the year/s of non-residency taken into account.  Own for 20 years / non-res for 2 of those years, somewhere there will be a 10% penalty in the calculations. 
•  Spending 183 days in Oz in the financial year I sell will not automatically make me 'resident'.  Would not affect the CGT calculation but would affect the tax rate - no tax free threshold etc. 

 

As I say, advice was to apply for a private ruling, that ruling is then legally binding.  Instructions on the website.  

 

Too many $$ at stake to tell them I'm resident the whole time then close my eyes and pray not to be audited.   Govt departments are linked, so Immigration departure info will find its way to other departments.   And those govt treaties with Thailand - if your spouse owns property in Thailand you have to assume the ATO can find out, whether you tell them or not.  There's your 'permanent abode'.  

 

I'll post the result once I have a permanent ruling. 

[moojar]

3 minutes ago, stud858 said:

I've never stated someone living in Thailand is permanent.

The ATO defines these items fairly well. Live, reside, residency,  residency for tax purposes, constructive residency, abode, domicile, permanent, and usual are defined as their dictionary meanings on the ATO Site.

I agree with about your " live in Thailand" statement. . 

You need to apply for an immigrant visa/citizenship/ permanent residency, if you want the rights and  to be taken off the temporary guest list.

Oh sorry, your line " became an immigrant of another country" made me think you meant  'became an immigrant of another country'.  ?  

 

 

[stud858]

6 minutes ago, moojar said:

So, don't read the forum for a few days and there are pages and pages of ATO-resident argy bargy.  LOL.  

 

I called the ATO this morning.  Advice was apply for a private ruling.  

 

I have an investment property and will retire to Thailand in a couple of years.  Will still own our family home in Oz.  If the property market is still spiralling down then, I'll hang on to the investment property as well.  What the ATO guy on the phone told me:  

•  I'd be non-resident and pay tax at non-resident rates, with no tax-free threshold.  Not a showstopper, the investment property is more or less revenue neutral - can still claim all the regular deductions. 
•  CGT discount when I do sell will be calculated with the year/s of non-residency taken into account.  Own for 20 years / non-res for 2 of those years, somewhere there will be a 10% penalty in the calculations. 
•  Spending 183 days in Oz in the financial year I sell will not automatically make me 'resident'.  Would not affect the CGT calculation but would affect the tax rate - no tax free threshold etc. 

 

As I say, advice was to apply for a private ruling, that ruling is then legally binding.  Instructions on the website.  

 

Too many $$ at stake to tell them I'm resident the whole time then close my eyes and pray not to be audited.   Govt departments are linked, so Immigration departure info will find its way to other departments.   And those govt treaties with Thailand - if your spouse owns property in Thailand you have to assume the ATO can find out, whether you tell them or not.  There's your 'permanent abode'.  

 

I'll post the result once I have a permanent ruling. 

Can I ask which would you prefer to be?  R or non R for tax? 

[stud858]

5 minutes ago, moojar said:

Oh sorry, your line " became an immigrant of another country" made me think you meant  'became an immigrant of another country'.  ?  

 

 

An Australian who "became an immigrant of another country"  can be seen as a non resident of Australia if they set up abode in their immigrated country. That's all I was saying. 

Is there a problem with my statement?

 

[moojar]

5 minutes ago, stud858 said:

Can I ask which would you prefer to be?  R or non R for tax? 

I'd prefer to be resident of course, given that I'll be retired and not earning any money outside of Oz.  I don't believe I get a choice in the matter though - ticking a 'resident' box on my tax return does not magically make me legally resident, unfortunately.  

 

I'll discuss with my accountant before applying for a private ruling though - don't tell the ATO more than they need to know, and that includes applying for a private ruling.  But no point pretending one thing if they are easily gonna catch me in a lie.   

 

IMO one reason these rules are there is to stop people avoiding tax by claiming to be resident when they are not.  Not necessarily aimed at long-time residents of Oz that have retired overseas, but we get caught up in the rules brought in because people who can claim residency, do.  Like the hoops we have to jump thru for a pension now - people have been gaming the system, the govt has to change the rules, we get caught up in that closing of loop-holes.  

[Will27]

40 minutes ago, moojar said:

I think you may be confusing 'permanent resident' with 'resident of'.   If you live in Thailand you are a resident of Thailand.  Does not mean you are a permanent resident with any citizenship-type rights.

 

But how does the ATO prove 'set up an abode there' is an interesting point, especially if someone is renting in Thailand. 

Having residency in Thailand doesn't affect your residency status in Australia.

 

I'm guessing way over 90% of Aussies living in Thailand have not gained residency.

Again, being a non-resident of Thailand doesn't make you a resident of Australia for tax purposes.

 

Why do you need to set up an abode?

Wouldn't it just be easier to claim non-residency status?

 

 

[Will27]

11 minutes ago, stud858 said:

An Australian who "became an immigrant of another country"  can be seen as a non resident of Australia if they set up abode in their immigrated country. That's all I was saying. 

Is there a problem with my statement?

 

Didn't you say earlier, that if you don't have residency of Thailand, that makes you a resident of Australia for taxation purposes?

[stud858]

2 minutes ago, moojar said:

I'd prefer to be resident of course, given that I'll be retired and not earning any money outside of Oz.  I don't believe I get a choice in the matter though - ticking a 'resident' box on my tax return does not magically make me legally resident, unfortunately.  

 

I'll discuss with my accountant before applying for a private ruling though - don't tell the ATO more than they need to know, and that includes applying for a private ruling.  But no point pretending one thing if they are easily gonna catch me in a lie.   

 

IMO one reason these rules are there is to stop people avoiding tax by claiming to be resident when they are not.  Not necessarily aimed at long-time residents of Oz that have retired overseas, but we get caught up in the rules brought in because people who can claim residency, do.  Like the hoops we have to jump thru for a pension now - people have been gaming the system, the govt has to change the rules, we get caught up in that closing of loop-holes.  

It can very much depend on what you say.  If you say your intention is to retire to Thailand and not intend to return then you're on your way to get a non resident ruling. 

If you say you will get a non immigrant visa based on retirement because you are over 50 and you intend to return to your home in Australia as it holds all your personal items,  receives your mail,  and you have every intention of returning to Australia as the Thai government will not give you permanent residency. This will set you on your way to a residency for tax ruling.

 

[moojar]

1 minute ago, Will27 said:

Having residency in Thailand doesn't affect your residency status in Australia.

 

I'm guessing way over 90% of Aussies living in Thailand have not gained residency.

Again, being a non-resident of Thailand doesn't make you a resident of Australia for tax purposes.

 

Why do you need to set up an abode?

Wouldn't it just be easier to claim non-residency status?

 

 

See my reply to Stud858.  You don't have to have been granted Thailand residency (path to citizenship) to be a resident of Thailand.   Just living there on a retirement visa makes you a 'resident of Thailand' (living in Thailand).  No legal rights, but still a resident.   Like a foreign student studying in Australia.  Does not have PR or citizenship, he is on a visa of some sort - he is residing in Australia. 

[Will27]

5 minutes ago, moojar said:

I'd prefer to be resident of course, given that I'll be retired and not earning any money outside of Oz.  I don't believe I get a choice in the matter though - ticking a 'resident' box on my tax return does not magically make me legally resident, unfortunately.  

 

I'll discuss with my accountant before applying for a private ruling though - don't tell the ATO more than they need to know, and that includes applying for a private ruling.  But no point pretending one thing if they are easily gonna catch me in a lie.   

 

IMO one reason these rules are there is to stop people avoiding tax by claiming to be resident when they are not.  Not necessarily aimed at long-time residents of Oz that have retired overseas, but we get caught up in the rules brought in because people who can claim residency, do.  Like the hoops we have to jump thru for a pension now - people have been gaming the system, the govt has to change the rules, we get caught up in that closing of loop-holes.  

If you're going to be living in Thailand pretty much fulltime, in all likelihood you will be a non-resident.

 

There are too many people on here that because they have a medicare card, a drivers licence and an Aussie postal

address seem to think they're still residents.

 

I know there are exceptions to every rule, but how anyone honestly think they're a resident living 51 weeks a year

in Thailand is a bit strange.

[stud858]

8 minutes ago, Will27 said:

Again, being a non-resident of Thailand doesn't make you a resident of Australia for tax purposes.

Correct, and vice versa,  it doesn't make you a non resident either.  All things are considered. 

[Will27]

1 minute ago, stud858 said:

It can very much depend on what you say.  If you say your intention is to retire to Thailand and not intend to return then you're on your way to get a non resident ruling. 

If you say you will get a non immigrant visa based on retirement because you are over 50 and you intend to return to your home in Australia as it holds all your personal items,  receives your mail,  and you have every intention of returning to Australia as the Thai government will not give you permanent residency. This will set you on your way to a residency for tax ruling.

 

So if the ATO audits Joe Bloggs and says "you haven't been back to Australia for 7 years" or something similar, you

think that by saying you have a house there makes you a resident? How can you prove an intent to move back to Oz?

 

That's pretty much wrong.

 

The ATO could say, well when/if you return to Australia, then you can say you're a resident.

[Will27]

1 minute ago, stud858 said:

Correct, and vice versa,  it doesn't make you a non resident either.  All things are considered. 

Yes all things are considered, but the main thing would be how long you are out of the country I'd imagine.