Becoming expat in your 50s, money in Australia, what did you do?

[dlited]

I am recent expat 50's with no plans to work in oz again. I have a chunk of money in term deposits and so far ticked the resident for tax purposes box. I am wondering what other people did in this situation? Does it make sense to move money offshore? Any suggestions where and what banks? HSBC looks a possibility. Would it make sense to pay money into super, and then try to start drawing it at 60? Do super care whether we are non resident? 

 

 

 

 

 

[gearbox]

42 minutes ago, dlited said:

I am recent expat 50's with no plans to work in oz again. I have a chunk of money in term deposits and so far ticked the resident for tax purposes box. I am wondering what other people did in this situation? Does it make sense to move money offshore? Any suggestions where and what banks? HSBC looks a possibility. Would it make sense to pay money into super, and then try to start drawing it at 60? Do super care whether we are non resident? 

 

 

 

 

 

You can draw a super pension as non resident tax free, as long as the country you are in doesn't tax you. I'm planning to start drawing pension next year, but I'm a tax resident and will try to remain such. Pension from super after 60 is tax free,  furthermore the fund earnings are tax free too. Hard to beat anywhere else, but I suspect the pollies are going to change this for worse sooner than later.

 

If you remain resident, the earnings outside super are taxed very favourably up to 45k per year. If you are non resident you'll lose the tax free threshold.

 

It really depends how much money you are trying to move. If you have a spare couple of mils look at Singapore, there was a long thread here on this site.

[Adumbration]

How much money is in your chunk?

[4MyEgo]

2 hours ago, dlited said:

Does it make sense to move money offshore?

I moved here in my mid 50's eight years ago, I split my money into 3 banks as the government guarantee is limited to $250k per bank.

 

I am a non resident for tax purposes and have the 10% withholding tax paid by the banks on interest earned paid direct to the taxman.

 

I have a stack of shares and do not pay tax on dividends as the tax is already paid on them and some shares that I do sell, do not pay any capital gains tax on.

 

Make sure you move the bulk of your money if you are going to claim the pension (outside of your super) as there is an asset threshold, a Deeming Rate and a 2 year jail term. 

 

The above has worked for me the past 8 years, e.g. has cost me nothing to live here, and I live a good quality life, as for capital appreciation, well, I be telling lies if I said it was good, but I am content with what I have, it's more so lifestyle and a stress free life that I was looking for and obtained, earning a decent tax free life.

 

The above said, my assets remain in Oz, period !

 

Edited September 12, 2023 by 4MyEgo

[gearbox]

38 minutes ago, 4MyEgo said:

I moved here in my mid 50's eight years ago, I split my money into 3 banks as the government guarantee is limited to $250k per bank.

 

I am a non resident for tax purposes and have the 10% withholding tax paid by the banks on interest earned paid direct to the taxman.

 

I have a stack of shares and do not pay tax on dividends as the tax is already paid on them and some shares that I do sell, do not pay any capital gains tax on.

 

Make sure you move the bulk of your money if you are going to claim the pension (outside of your super) as there is an asset threshold, a Deeming Rate and a 2 year jail term. 

 

The above has worked for me the past 8 years, e.g. has cost me nothing to live here, and I live a good quality life, as for capital appreciation, well, I be telling lies if I said it was good, but I am content with what I have, it's more so lifestyle and a stress free life that I was looking for and obtained, earning a decent tax free life.

 

The above said, my assets remain in Oz, period !

 

There was a recent thread around this forum that the Thai banks are going to start reporting back to the home countries any assets with them, based on the foreigner's passport data the bank has. So if anyone moves money out of Oz in order to qualify for OAP he or she may get caught eventually. The overseas reach of ATO and the Oz govt is constantly expanding, a friend of mine got notice for incorrectly declared dividend from a French company listed in France.

[Will27]

7 hours ago, gearbox said:

There was a recent thread around this forum that the Thai banks are going to start reporting back to the home countries any assets with them, based on the foreigner's passport data the bank has. So if anyone moves money out of Oz in order to qualify for OAP he or she may get caught eventually. The overseas reach of ATO and the Oz govt is constantly expanding, a friend of mine got notice for incorrectly declared dividend from a French company listed in France.

Can you remember a link?

 

TBH, I find this very hard to believe.

 

It would be a huge workload for banks.

Not to mention where would they send this information?

[gearbox]

4 minutes ago, Will27 said:

Can you remember a link?

 

TBH, I find this very hard to believe.

 

It would be a huge workload for banks.

Not to mention where would they send this information?

 

 

It says in the OP "if you have tax residence home",  but the Thai banks wouldn't now your tax residence status and simply use the passport of origin.

[Ralf001]

21 minutes ago, Will27 said:

Can you remember a link?

 

TBH, I find this very hard to believe.

 

It would be a huge workload for banks.

Not to mention where would they send this information?

They have to report to the USA I believe so systems already in place.

[gearbox]

14 minutes ago, Ralf001 said:

They have to report to the USA I believe so systems already in place.

It is hard to figure out which countries are effectively participating in the exchanges and if you call the govt hotline they won't give you a list ????

 

However the only way to take money out of Oz without the govt knowing is to put them in the pocket. Everything is captured, including Wise and PayPal transfers. However afaik the ATM withdrawals are not reported yet, but how to withdraw 300k or a mil with a card? At the Oz side the banking software may flag it as suspicious transactions requiring special report to the govt.

 

After they collect data from anywhere they can legally do, complex data mining and data matching models are applied, including network analysis. The desk officers at Centrelink may not look too smart, but the govt has massive computing power in the background which continuously evolves.

[Peterw42]

12 hours ago, dlited said:

I am recent expat 50's with no plans to work in oz again. I have a chunk of money in term deposits and so far ticked the resident for tax purposes box. I am wondering what other people did in this situation? Does it make sense to move money offshore? Any suggestions where and what banks? HSBC looks a possibility. Would it make sense to pay money into super, and then try to start drawing it at 60? Do super care whether we are non resident? 

 

 

 

 

 

Just leave the money in Australia and in term deposit, they don't tax savings and you can earn $20k in interest before its taxed. 

You have already earned that money and paid tax on it, so no real advantage paying it into super now.

If its a significant amount of money, why not buy a rental property, then live off the rent.

The idea is to do everything to remain an oz resident for tax purposes, own a house, earn and declare income, do tax returns, vote, etc etc. Earn $20k a year in Australia, tax free, and live off it in Thailand.

[Will27]

1 hour ago, Peterw42 said:

Just leave the money in Australia and in term deposit, they don't tax savings and you can earn $20k in interest before its taxed. 

You have already earned that money and paid tax on it, so no real advantage paying it into super now.

If its a significant amount of money, why not buy a rental property, then live off the rent.

The idea is to do everything to remain an oz resident for tax purposes, own a house, earn and declare income, do tax returns, vote, etc etc. Earn $20k a year in Australia, tax free, and live off it in Thailand.

If you're over the tax free threshold, I'm pretty sure it all gets taxed or have I misinterpreted something here?

 

Edit* Assuming the interest is his only source of income, that's correct.

Edited September 13, 2023 by Will27

[Peterw42]

7 minutes ago, Will27 said:

If you're over the tax free threshold, I'm pretty sure it all gets taxed or have I misinterpreted something here?

Any income over the tax free threshold, gets taxed at normal Australian tax rates. The same as its always been for any income you have ever earned in Australia.

Savings in the bank has no impact on tax amounts or thresholds.

[Will27]

2 minutes ago, Peterw42 said:

Any income over the tax free threshold, gets taxed at normal Australian tax rates. The same as its always been for any income you have ever earned in Australia.

Savings in the bank has no impact on tax amounts or thresholds.

Yep

 

I edited my earlier post.

I assumed the OP had other income.

[4MyEgo]

19 hours ago, gearbox said:

There was a recent thread around this forum that the Thai banks are going to start reporting back to the home countries any assets with them, based on the foreigner's passport data the bank has. So if anyone moves money out of Oz in order to qualify for OAP he or she may get caught eventually. The overseas reach of ATO and the Oz govt is constantly expanding, a friend of mine got notice for incorrectly declared dividend from a French company listed in France.

Money/assets stay in Oz.

 

Assets one could say could be transferred to family members with caveats ????

 

Edited September 13, 2023 by 4MyEgo

[dlited]

Thanks for the responses. If I had millions I would split it in 3 offshores and claim residence in a country with zero income tax, but I don't.

 

4MyEgo sounds like our plans and motivations are similar. I hope mate that you have enough that you don't need to go back at 67. Do you mind me asking which banks allowed term deposits and being non resident? I have money in Ubank, Macquarrie and AMP, but am concerned, they could cancel them, if they knew I wasn't residing in oz. My plan is to go back to Oz next month and move money from Ubank, Macquarrie into 5 year term deposits, because it looks like interest rates have peaked. Would make sense to diversify and buy some dividend stocks, but no idea what to buy.

 

FYI, last month Commonwealth bank asked me to confirm address after only 8 months out of the country and threatened to limit transactions, when I tried to ignore their request.

 

It seems the consensus is to maintain residency and assets in oz. For anyone who has become non resident, what was the rationale? How is that going to play out in regards to getting the pension later?

[1]

On 9/14/2023 at 9:03 PM, dlited said:

Thanks for the responses. If I had millions I would split it in 3 offshores and claim residence in a country with zero income tax, but I don't.

 

4MyEgo sounds like our plans and motivations are similar. I hope mate that you have enough that you don't need to go back at 67. Do you mind me asking which banks allowed term deposits and being non resident? I have money in Ubank, Macquarrie and AMP, but am concerned, they could cancel them, if they knew I wasn't residing in oz. My plan is to go back to Oz next month and move money from Ubank, Macquarrie into 5 year term deposits, because it looks like interest rates have peaked. Would make sense to diversify and buy some dividend stocks, but no idea what to buy.

 

FYI, last month Commonwealth bank asked me to confirm address after only 8 months out of the country and threatened to limit transactions, when I tried to ignore their request.

 

It seems the consensus is to maintain residency and assets in oz. For anyone who has become non resident, what was the rationale? How is that going to play out in regards to getting the pension later?

I agree with 4MyEgo shares cash the way to go. The tax residency laws are a dog's breakfast particularly when you take into consideration that is likely to change sometime in the near future.

 

My main reason for posting is just to let you know that I recently had the individual identification thing with Macquarie Bank. I messed around and did all that and a year later have been asked to do it again. It was probably prompted by a property sale. But that's just my best guess.

 

Personally I like to keep most of my assets in Australia to try and help argue tax residency, though in the 7 years I have been looking at this I'm not confident in anything. The only thing I would say with a small amount of confidence is that they seem to be more interested in maintaining you as a tax resident generally. More interested in catching out the guys earning the big dollars in multinational companies and avoiding any income tax in Australia, than guys in their 50s trying to scratch together enough money for a half a dozen Leos! 

 

Of course there's always exceptions to these opinions but the only thing I've come across that I will take as gospel, is a guy here on Asean now who got a ruling from the ATO about his tax residency.

 

One final point. As mentioned by 4MyEgo. Investing in the Australian share market is a very useful way to generate income particularly if they are fully franked. The share market is super friendly to newbies with tons of information available. Things like ETFs LICs etc can help generate relatively reliable income with relatively small amounts of education.

[JimHuaHin]

Keeping financial assets in Australia in different banks is a wise move, and probably provides greater security than having large amounts of money Thai banks.

[4MyEgo]

On 9/15/2023 at 12:03 AM, dlited said:

4MyEgo sounds like our plans and motivations are similar. I hope mate that you have enough that you don't need to go back at 67. Do you mind me asking which banks allowed term deposits and being non resident?

I don't have a problem with CBA who I also use to trade shares through Commsec, there is also NAB and ANZ.

 

As long as you let them know to apply the withholding tax, they can't do anything as it's a requirement of the ATO. That said you could ask the banks what their policies are on non residents before acting. I did have an account with ING for 2 decades and they shut me down one day saying that their policy change didn't allow for non residents anymore, fair enough, I just told them to lift the threshold limit and transferred my money in that account to the two others I was holding at that time, then opened NAB account online from here and picked up my card at the branch 6 month's later when I was due to go back to AUS for a short break.

 

On 9/15/2023 at 12:03 AM, dlited said:

It seems the consensus is to maintain residency and assets in oz. For anyone who has become non resident, what was the rationale? How is that going to play out in regards to getting the pension later?

There is no tax payable or capital gains tax payable as a non resident, so if that is your angle, put money in the banks and pay 10% withholding tax on the interest, if you invest in the stock market, fully franked dividends pay the tax before paying you so there is no problem there, and there is no capital gains tax payable when you sell shares.

 

With regards to the pension, make sure you get ride of everything except what they allow as the threshold for a non home owner, e.g. $543,750 to qualify, they will apply a Deeming Rate and reduce your pension, but that will be minimal. The only bad part is they will apply it when you go to live in Thailand as well, can't have your cake and eat it too so to speak. But when in Oz, you will get the Supplement about $80, Energy Allowance about $14 and rental assistance which is about $185, all are per fortnight, but will lose the rental assistance when you leave, and the Supplement will be reduced by at least 2/3rds after 6 weeks, with the Energy Allowance going all together. 

 

Got to do your homework, I unloaded a lot to my daughter, but I have a Caveat on the place she purchased and she can't sell it without me getting my money back, but she has a great deal rental wise, so she's happy as, besides I have also have a will stating that if I pass the Caveat is lifted as she is the beneficiary.

 

I want to go back to get the 50k baht, I think two years back in Oz alone will do me good and make me want to come back here even more. Like I said in other posts, don't need to, but hey, "a bird in the hand is better than two in the bush" and I figure is I live for another decade whilst getting the pension that's $270k AUS for the girls here because it will be put aside for them, which works out to be about 6 million baht divided by two, not chicken feed in Thailand and will give them a good start, along with what mum will give them from her will that I made out for her.

 

You need to do your homework, and perhaps speak to a financial planner who maybe able to set you up for the pension in years to come or do your own research as I did.

 

My plan is going great so far, just got to get to the pension age, do the 2 years and live as long after that to maximise what the kids get.

[gearbox]

On 9/13/2023 at 10:03 AM, Will27 said:

If you're over the tax free threshold, I'm pretty sure it all gets taxed or have I misinterpreted something here?

 

Edit* Assuming the interest is his only source of income, that's correct.

There is also low income tax offset, which effectively lifts the threshold a little bit.

[KhunHeineken]

On 9/13/2023 at 1:19 AM, Peterw42 said:

Just leave the money in Australia and in term deposit, they don't tax savings

They don't tax interest on savings.  Really?

 

Link please?

 

On 9/13/2023 at 1:19 AM, Peterw42 said:

f its a significant amount of money, why not buy a rental property, then live off the rent.

Investment properties are not as lucrative as they once were.  Taxes, fees, levies, rates, maintenance etc.  

 

On 9/13/2023 at 1:19 AM, Peterw42 said:

The idea is to do everything to remain an oz resident for tax purposes,

How does leaving money in Australia in a term  deposit and / or buying a rental property, help someone remain a resident of Australia for tax purposes? 

[Peterw42]

8 hours ago, KhunHeineken said:

They don't tax interest on savings.  Really?

 

Link please?

Thats not what I said, I said saving are not taxed. and the first $20,000 of interest on savings is not taxed.

 

8 hours ago, KhunHeineken said:

investment properties are not as lucrative as they once were.  Taxes, fees, levies, rates, maintenance etc.  

I find it very lucrative, As Taxes, fees, levies, rates, maintenance are all tax deductions. I get a solid 6% net return on the purchase price, and with the tax free threshhold, a tax free income up to $20,000 a year.

 

 

8 hours ago, KhunHeineken said:

How does leaving money in Australia in a term  deposit and / or buying a rental property, help someone remain a resident of Australia for tax purposes? 

Remaining a resident for tax purposes is based on several criteria, some of them being, an income in Australia, doing tax returns in Australia, owning a Property in Australia. I have not lived in Australia for 10 years, but remain a tax resident. The ATO has an online calculator to determine tax resident status, and I meet the status because I still own a property.

[Will27]

50 minutes ago, Peterw42 said:

Thats not what I said, I said saving are not taxed. and the first $20,000 of interest on savings is not taxed.

 

I find it very lucrative, As Taxes, fees, levies, rates, maintenance are all tax deductions. I get a solid 6% net return on the purchase price, and with the tax free threshhold, a tax free income up to $20,000 a year.

 

 

Remaining a resident for tax purposes is based on several criteria, some of them being, an income in Australia, doing tax returns in Australia, owning a Property in Australia. I have not lived in Australia for 10 years, but remain a tax resident. The ATO has an online calculator to determine tax resident status, and I meet the status because I still own a property.

Do you make regular visits back to OZ?

 

If not, you're probably like most expats on here, a non-resident.

[Peterw42]

5 minutes ago, Will27 said:

Do you make regular visits back to OZ?

 

If not, you're probably like most expats on here, a non-resident.

I have not been back in 5 years. I'm still a tax resident, I just did my tax return last week, and nothing has changed. I still meet the criteria via the ATO website.

[Will27]

8 minutes ago, Peterw42 said:

I have not been back in 5 years. I'm still a tax resident, I just did my tax return last week, and nothing has changed. I still meet the criteria via the ATO website.

Interesting.

 

Based on the ATO calculator, I'd be surprised if 5% of expats are residents if they answer truthfully.

Especially if they don't spend any time in Australia.

[Spilornis]

On 9/13/2023 at 11:19 AM, Peterw42 said:

Just leave the money in Australia and in term deposit, they don't tax savings and you can earn $20k in interest before its taxed. 

Agree... you actually want to retain your Australian tax residency so you can take advantage of the very generous tax free threshold.

Think about putting some into shares with franked dividends. You'll get a refund each year.

It's not hard to retain residency... super fund, bank account, etc all help.

The 180 day test is largely a red herring when it comes to residency. All it does is gives Thailand a right to tax you as well. Depends on their laws as to whether you are taxed

[farmerjo]

On 9/14/2023 at 9:03 PM, dlited said:

For anyone who has become non resident, what was the rationale? How is that going to play out in regards to getting the pension later?

Being a simpleton i never thought about trying to manage assets and banks in different countries,don't need the stress although based my part time work in  places around the world except for Aus.

Have managed to be wise enough to keep enough money aside to relocate if ever required but not sure how it would work as only have a passport with no other documentation.

Not worried about a pension,have about 100K in super in Aus i deal with if i live that long.

 

 

[KhunHeineken]

6 hours ago, Peterw42 said:

Thats not what I said, I said saving are not taxed. and the first $20,000 of interest on savings is not taxed.

You are talking about the tax free threshold, and it's not just for interest, it's all forms of income. 

 

The tax free threshold does not apply to non residents for tax purposes.  It's 32.5% from $0 to $120,000. 

 

6 hours ago, Peterw42 said:

I find it very lucrative, As Taxes, fees, levies, rates, maintenance are all tax deductions. I get a solid 6% net return on the purchase price,

One should not just be relying on a single rental property for living in Thailand, and you forgot that the rent received also decreases a pension.  

 

Once again, your figures are based on being a resident for tax purposes, which many living in Thailand are not.  

 

6 hours ago, Peterw42 said:

Remaining a resident for tax purposes is based on several criteria, some of them being, an income in Australia, doing tax returns in Australia, owning a Property in Australia. I have not lived in Australia for 10 years, but remain a tax resident. The ATO has an online calculator to determine tax resident status, and I meet the status because I still own a property.

This has been discussed to death in the other thread. 

 

Yes, you, me, and many on this thread are currently using 90 year old legislation that says if you maintain a "domicile" in Australia you can remain a resident for tax purposes.

 

As discussed in the other thread, with many links provided, the previous Liberal government put forward proposed changes, and the current Labor government are aware of them, that basically sets out the criteria be changed from "domicile" to a time based criteria, and based on physical presence.  

 

This will have implications for you, me, and many on this thread.  

 

Basically, immigration know you are not in Australia for 183 days, and they inform Centrelink and the ATO, then, you are treated as a non resident for tax purposes.  All done by computer data bases.  Simple, cheap, and no loop holes.  No appeals, no reviews.  Inside Australia 183 days, resident, outside Australia for 183 days, non resident. 

 

It means you will be paying 32.5% tax from dollar number one on all income, including a pension, and yes, a pension is deemed to be an income.  Links have been provided for this.

 

So, can you maintain your current lifestyle in Thailand with 32.5% less money?    

 

[Will27]

24 minutes ago, KhunHeineken said:

You are talking about the tax free threshold, and it's not just for interest, it's all forms of income. 

 

The tax free threshold does not apply to non residents for tax purposes.  It's 32.5% from $0 to $120,000. 

 

One should not just be relying on a single rental property for living in Thailand, and you forgot that the rent received also decreases a pension.  

 

Once again, your figures are based on being a resident for tax purposes, which many living in Thailand are not.  

 

This has been discussed to death in the other thread. 

 

Yes, you, me, and many on this thread are currently using 90 year old legislation that says if you maintain a "domicile" in Australia you can remain a resident for tax purposes.

 

As discussed in the other thread, with many links provided, the previous Liberal government put forward proposed changes, and the current Labor government are aware of them, that basically sets out the criteria be changed from "domicile" to a time based criteria, and based on physical presence.  

 

This will have implications for you, me, and many on this thread.  

 

Basically, immigration know you are not in Australia for 183 days, and they inform Centrelink and the ATO, then, you are treated as a non resident for tax purposes.  All done by computer data bases.  Simple, cheap, and no loop holes.  No appeals, no reviews.  Inside Australia 183 days, resident, outside Australia for 183 days, non resident. 

 

It means you will be paying 32.5% tax from dollar number one on all income, including a pension, and yes, a pension is deemed to be an income.  Links have been provided for this.

 

So, can you maintain your current lifestyle in Thailand with 32.5% less money?    

 

 

 

Edited September 25, 2023 by Will27

[KhunHeineken]

1 hour ago, Will27 said:

 

 

Have you noticed quite a few recent threads, not started by myself, mention resident / non resident for taxation purposes? 

 

Some members, and I am one of them, state they haven't been back to Australia for years, yet are still claiming to be a resident for taxation purposes.  The proposed changes that have been discussed will close this loophole not only for the wealthy, but for everyone, because as it stands, there are no exemptions, or non resident tax free threshold mentioned in the proposed changes.  

[KhunHeineken]

7 hours ago, Spilornis said:

Agree... you actually want to retain your Australian tax residency so you can take advantage of the very generous tax free threshold.

Think about putting some into shares with franked dividends. You'll get a refund each year.

It's not hard to retain residency... super fund, bank account, etc all help.

The 180 day test is largely a red herring when it comes to residency. All it does is gives Thailand a right to tax you as well. Depends on their laws as to whether you are taxed

Perhaps you can explain how an expat who has been living in Thailand for the last 3 years, or longer, can argue with the ATO in the future that they are still a resident for tax purposes. 

 

Things are changing.  It's been discussed at length in the other thread.  Having a house, bank account etc will not be the criteria the ATO will be using to classify you in the future.  

 

You will be deemed either resident or non resident based on time and physical presence, not domicile and "intention." 

 

Currently, anyone can say they have the "intention" of returning to Australia, and for those who still have a property, can show they have a "domicile" in Australia.  The reality is, most have no intention of living in Australia again, whether they own a property there or not.  The proposed changes will address this loophole for everyone, not just the wealthy.