Australian expat self funded retirees - non-resident tax laws & shares etc. How to structure investments?

[aussienam]

56 minutes ago, Old Croc said:

I'm unsure why Leaver, who is not Australian, has such strong opinions and warnings about ATO audit attacks on low income retirees, but his dire predictions are not backed up by examples.

There are a myriad of Australian pensioners, in various categories, living in Thailand and I have not heard of a single one being monstered by the tax office. They would be screaming on these pages if it were the case.

I have not been back to Australia for 10 years and no longer have reason to ever return. My income category is that of retired Australian Government Employee on a CSS pension. I also have other tax free investments. I have no contact with CL at all. In my 70s, I've never applied for a partial aged pension.

As I cannot obtain residency in this country, I consider Australia to be my permanent home even though it would require exceptional circumstances for me to return there.

As someone with long government service at a fairly high level, and who has literally shed blood for the country, I greatly resent the idea that my hard earned pension should be taxed at the same rate as a fruit picking backpacker.

In previous discussions here on this subject several CSS pensioners related that they have talked to ATO and been given oral rulings that they should continue to state they are resident for tax purposes. There are others who have bitten the bullet and pay the higher tax.

I cannot remove the balance of my superannuation from the fund to invest elsewhere (I did once enquire) and continue to pay a small tax on my pension.

ATO provide an e-tax form each year with my CSS income and bank interest pre-filled, and I have no expectations nor fears that an audit is likely.

Thanks mate for the insightful reply.  

I hope you are right as I have no clue what is going to happen.  

 

It seems you smartly have all your investments out of 'harms way' and do not attract any significant tax assessment.  Problem for me is being so exposed to non-super investments and yearly detailed tax returns, plus being of 'working age', albeit total permanent disability.

 

Wondering how many expats travel back to Oz to clock up time there to retain residency status.  COVID just muddies the water of course.  And costs to get back are extreme.  

 

 

[wordchild]

12 hours ago, aussienam said:

I never knew transferring funds into a Thai account attracted tax?  Or does it have something to do with it coming from a brokerage account?  I have always just transferred amounts from my bank in Oz via a FOREX ('Wise') as needed. 

A transfer to a brokers offshore account ,eg the Asia Plus account mentioned,  would not attract any tax, The cash or assets held never actually come into Thailand they remain offshore. I was really thinking of a situation, say in the future, where you needed some cash in Thailand and wanted to transfer some money from your offshore account into your Thai bank account.

strictly speaking transfers into Thailand  could, in certain circumstances , be taxable in Thailand. This is a complex area, however as you are not an existing Thai tax payer I think it highly unlikely that this would be an issue for you.

I am a Thai tax payer and file returns here , because i work here, so i am careful about this kind of thing.

If you look on the Asia Plus website you will see a lot of information about this kind of account , this maybe useful for you wherever you choose to maintain your assets. Certainly AP advise their customers who have offshore accounts to bring in funds they need during the early part of January, so as to avoid any tax issues . 

[wordchild]

A final thought; both the Asia Plus account and the Saxo account are "execution only " accounts; ie you get no investment advice. You need to choose the investments yourself, is this what you want?

I dont know the OZ financial scene very well but maybe, as another option, you could find a Financial Adviser there who has the competence to deal with someone in your situation. 

For sure do not go anywhere near Financial Advisers based  in Thailand, they have  a justifiably poor reputation.

[Fat is a type of crazy]

14 hours ago, Old Croc said:

I'm unsure why Leaver, who is not Australian, has such strong opinions and warnings about ATO audit attacks on low income retirees, but his dire predictions are not backed up by examples.

There are a myriad of Australian pensioners, in various categories, living in Thailand and I have not heard of a single one being monstered by the tax office. They would be screaming on these pages if it were the case.

I have not been back to Australia for 10 years and no longer have reason to ever return. My income category is that of retired Australian Government Employee on a CSS pension. I also have other tax free investments. I have no contact with CL at all. In my 70s, I've never applied for a partial aged pension.

As I cannot obtain residency in this country, I consider Australia to be my permanent home even though it would require exceptional circumstances for me to return there.

As someone with long government service at a fairly high level, and who has literally shed blood for the country, I greatly resent the idea that my hard earned pension should be taxed at the same rate as a fruit picking backpacker.

In previous discussions here on this subject several CSS pensioners related that they have talked to ATO and been given oral rulings that they should continue to state they are resident for tax purposes. There are others who have bitten the bullet and pay the higher tax.

I cannot remove the balance of my superannuation from the fund to invest elsewhere (I did once enquire) and continue to pay a small tax on my pension.

ATO provide an e-tax form each year with my CSS income and bank interest pre-filled, and I have no expectations nor fears that an audit is likely.

The CSS sounds good..I am in PSS which is pretty good but I hit 54 11 a while ago and it would have been nice to take that up. Better than the current super fund which is not defined benefit. 

 

I had been told by someone that getting a government pension made you likely to be treated as a resident full stop but that has been pointed out as incorrect.

 

My 2 cents on the audits is that the concept of whether you are audited on a lower income can depend on data matching. Obviously if  it shows you are sending money overseas, have cash deposits, buying nice cars or real estate, then being on a low income makes you more likely to be audited as you need those funds to live off. If you are on a higher income it is relatively difficult to identify if such things are an issue. 

 

One thing I have noted is the ATO tend to send out warning or guidance messages by email or letter now if you are outside the norm. I got one because I kept claiming $300 for work related deductions and had one about rental property deductions. I think they may do it for other things such as business benchmarks. So it's possible that if you have your contact details up to date, and have not had a warning on an issue such as residency, an out of the blue audit is not likely. If you get that warning you have an opportunity to take action if appropriate.

[Old Croc]

6 hours ago, Fat is a type of crazy said:

The CSS sounds good..I am in PSS which is pretty good but I hit 54 11 a while ago and it would have been nice to take that up. Better than the current super fund which is not defined benefit. 

 

I had been told by someone that getting a government pension made you likely to be treated as a resident full stop but that has been pointed out as incorrect.

 

They scrapped CSS when the pollies worked out it was nearly as good as their super grab.

I was planning to go at 54/11, but was offered a package 13 months before that time when a number of positions in my department were made redundant. As it included 12 months tax free salary I jumped at it, and was out the door in about 3 days. Getting more money to not go to work was too attractive.

Strict interpretation of ATO residency rules states you must pay the higher tax rate, but as I pointed out, some individuals have received more favorable oral rulings.

Incidentally, I disagree with a poster early in this thread who said you can discuss your situation with ATO anonymously.  I believe they always require your TFN for any contact. 

[Fat is a type of crazy]

19 minutes ago, Old Croc said:

They scrapped CSS when the pollies worked out it was nearly as good as their super grab.

I was planning to go at 54/11, but was offered a package 13 months before that time when a number of positions in my department were made redundant. As it included 12 months tax free salary I jumped at it, and was out the door in about 3 days. Getting more money to not go to work was too attractive.

Strict interpretation of ATO residency rules states you must pay the higher tax rate, but as I pointed out, some individuals have received more favorable oral rulings.

Incidentally, I disagree with a poster early in this thread who said you can discuss your situation with ATO anonymously.  I believe they always require your TFN for any contact. 

That was me. You definitely can speak anonymously as I have done so. The computer call centre thing on the phone  asks if you want to give ID, or some sort of voice recognition, but just pick the options not to and they will still help. Obviously if you want binding advice that's different. 

[Old Croc]

31 minutes ago, Fat is a type of crazy said:

That was me. You definitely can speak anonymously as I have done so. The computer call centre thing on the phone  asks if you want to give ID, or some sort of voice recognition, but just pick the options not to and they will still help. Obviously if you want binding advice that's different. 

Sorry, I didn't check back to see who said that.

My experience, a few years ago when I was trying to get someone to check with ATO, was that it couldn't be done anonymously. I tried 3 accountants and my Financial Advisor, none could help without putting me in. Good to see you can now ask questions without commitment.  However, I'm now comfortable with the way it works for me.

[1]

On 4/29/2021 at 11:45 PM, aussienam said:

Hello to all fellow Aussie expats who are living the self funded retirement life in Thailand (and anywhere else in the world outside Australia).  I was wondering if I could ask some of you to take time to read my post and offer suggestions, personal experience?  It is fairly detailed so if you don't want to read for a few minutes probably best to skip this.  Thanks

Hi. I feel your pain as my situation is similar.

 

I have read this thread and there are some great posts and information and wanted to see if I could offer anything. 

 

I stumbled upon this a few weeks ago and these guys seem to offer solid advice. Particularly as you don't seem to be the type to take a roll of the dice with regards to your tax position.

 

It's probably also worth mentioning, a friend of mine a 15 year veteran at the ATO, though not for about 15 years, told me that in his opinion the ATO is more interested in maintaining you as a tax resident. Clearly they do things legally to satisfy the requirements of tax treaties etc, but flying under the radar I don't think means you have to worry about what they know. It's more about why they would be interested in looking at you. Small fish in a big sea...

 

Anyway this is their YouTube channel but it is also available as a podcast.

 

https://youtube.com/c/AtlasWealthAuExpatAdvisers

[lapswim]

On 5/1/2021 at 6:12 PM, Leaver said:

 

Immigration records linked to your annual filling.  Eg. exit Australia 1/1/21.  Enter Australia after 1/7/21 - equals more than 6 months outside Australia. Does this person submit an annual tax report - yes.  Does this person earn any income - yes.  Red Flag residency status.  The data base does the lot.  

 

In the OP's case, he simply informed his bank, who informed the tax department.  

I was thinking of this too, so please correct me if I am wrong. Let’s say you do in fact exit Australia on 1/1/21 and enter Australis on say 27/6/22. You are overseas from 2/1/21 to 30/6/21 or 180 days in the 20/21 Australian Tax Year and you are overseas from 1/7/21 to 27/6/22 or 180 days in the 21/22 Australian Tax year. Would you not remain under the 183 days test in both Australian Tax years and assuming all other things are equal remain an Australian resident¿

[Leaver]

2 hours ago, lapswim said:

I was thinking of this too, so please correct me if I am wrong. Let’s say you do in fact exit Australia on 1/1/21 and enter Australis on say 27/6/22. You are overseas from 2/1/21 to 30/6/21 or 180 days in the 20/21 Australian Tax Year and you are overseas from 1/7/21 to 27/6/22 or 180 days in the 21/22 Australian Tax year. Would you not remain under the 183 days test in both Australian Tax years and assuming all other things are equal remain an Australian resident¿

 

You would need to check it's in a financial year, not a calendar year, but it's most probably in a financial year.  If so, what you propose should be fine. 

 

You are basically talking about 1 year in Australia, and 1 year in Thailand, using the end 6 months of one financial year, and the start 6 months of the next financial year to be in Thailand, and the end 6 months of one financial year and the start 6 months of the next financial year to be in Australia to maintain your Australian tax resident status.  

[lapswim]

1 hour ago, Leaver said:

 

You would need to check it's in a financial year, not a calendar year, but it's most probably in a financial year.  If so, what you propose should be fine. 

 

You are basically talking about 1 year in Australia, and 1 year in Thailand, using the end 6 months of one financial year, and the start 6 months of the next financial year to be in Thailand, and the end 6 months of one financial year and the start 6 months of the next financial year to be in Australia to maintain your Australian tax resident status.  

Mate, Check this out it is all about to change (about 1/3 into the video)