Australian Aged Pension

[Olmate]

2 minutes ago, Will27 said:

What member are you talking about?

Why encourage the daily diatribe? 

[giddyup]

5 minutes ago, KhunHeineken said:

The member is definitely a non resident for tax purposes. 

 

He doesn't meet any of the old criteria to be a resident, and certainly non of the new rules coming in. 

 

In his favor, he also has nothing in Australia to tax, and that's a good thing. 

 

If he's on a pension, we'll have to wait and see how they deal with pensions when the new laws come in.   

I get a part pension, approx 50%, as I also have a super pension.

[Will27]

2 minutes ago, Olmate said:

Why encourage the daily diatribe? 

Because it was a taxation question.

 

I've lost interest in debating the proposed 183 non-resident rule.

[KhunHeineken]

4 minutes ago, deej said:

FWIW

IF and a big IF

this 183 day  intended law is passed, it may well grandfathred in,  which will  allow the present pensioners to continue, with  happy normal retirement oversea,s????????????

 

 

I don't think it's an "if" I think it's a "when."

 

I doubt they would grandfather anything, it would cause quite a few early retirements so people could join the scheme.

[giddyup]

15 minutes ago, KhunHeineken said:

I got that from my bank a while ago as well.

 

I also ticked resident, despite spending most of the year outside Australia.  However, I do maintain a domicile, vehicle, bank account, sim card, license, utility bill, insurances, and so on, and submit a tax return every year.  This possibly did meet the criteria of being a resident, because maintaining these things showed an intention to return to Australia. 

 

People doing the same as me have flown under the radar in the past.  The ATO hasn't bothered with the small fish like me because they would have to look at each case individually, and each person's different circumstances, and look at all the associated documents submitted.    

 

Fast forward to 2022, and the 183 day rule relieves the ATO of looking at individuals, and their personal circumstances, and all the case investigation and documents submitted.  

 

You were outside of Australia for 183 days, that's all they need to know, their proof comes from immigration, and we can't fight it.  No case by case basis anymore, no individual circumstances to be investigated, no documents to be sifted through.  It throws a big net over all Aussies outside of Australia for 183 days.  That's everyone from Paul Hogan, to the backpacker who has just finished school who is going away for a year.    

 

The 183 day rule is perfect for the ATO because it uses time, and geographic location, both of which can not be refuted by Aussies abroad, leaving nothing to review, or appeal.  I can see why they are bringing it in.  It will scoop up a lot of people, and net them a lot of money.  

 

Will just have to wait and see if the pension is deemed as "income" and is taxed at non resident rates, or, may possibly be given an exemption.  

 

You've basically made a false declaration.  I doubt there will be any repercussions, but it is an offence.  

I'll plead confusion due to my age.

[KhunHeineken]

3 minutes ago, giddyup said:

I get a part pension, approx 50%, as I also have a super pension.

Ok, but that has nothing to do with residency for taxation purposes.  

 

We'll have to wait and see what they do with government pensions, but I would think your super pension would attract non resident taxation.  

[Lacessit]

1 minute ago, Will27 said:

Because it was a taxation question.

 

I've lost interest in debating the proposed 183 non-resident rule.

There's no debate about it, either it will happen or it won't.

[KhunHeineken]

2 minutes ago, giddyup said:

I'll plead confusion due to my age.

They have to find you first.  ????  

[RJRS1301]

6 minutes ago, giddyup said:

I'll plead confusion due to my age.

Tell that to the reviewing officers, as they send you off for an assessment at your expense ????

 

[giddyup]

2 minutes ago, RJRS1301 said:

Tell that to the reviewing officers, as they send you off for an assessment at your expense ????

 

Are these the officers that are coming to Thailand to interview me. Seriously?

[Lacessit]

10 minutes ago, giddyup said:

Well, they should have asked for that proof in the letter they sent, not just asked me to tick a box.

In my case, they asked for proof afterwards. They have not done so in previous years.

I don't know if they are taking on the authority of the ATO to ask for proof because they wish to, or if it is with the ATO's blessing.

The form states there are penalties for making false statements, so I guess every person who has not lived in Australia for years is subject to those penalties if the ATO chooses to go down that path.

[giddyup]

Just now, Lacessit said:

In my case, they asked for proof afterwards. They have not done so in previous years.

I don't know if they are taking on the authority of the ATO to ask for proof because they wish to, or if it is with the ATO's blessing.

The form states there are penalties for making false statements, so I guess every person who has not lived in Australia for years is subject to those penalties if the ATO chooses to go down that path.

The form only gave two options, resident or non resident, it never spelled out a distinction. It wasn't a Stat/dec so I can't see how I commited an offence.

[KhunHeineken]

17 minutes ago, Lacessit said:

There's no debate about it, either it will happen or it won't.

Here's one of the best articles I have found on it.

 

https://taxbanter.com.au/banter-blog/tax-residency-rules-to-change-behind-the-federal-budget-proposals/

 

Some quotes:

 

"One of the key tax measures is a long-anticipated proposal to change the tax residency tests for individuals to better reflect the modern world. This article outlines the Board of Taxation recommendations which underpin the Budget measure and sets out the model on which the new rules will likely be based."

 

"The Board has developed proposed rules to re-focus tax residency in three critical ways:

making physical presence the primary measure of residency — moving Australia to closer alignment with international practice;

focusing on Australian connections — providing that two individuals with identical physical presence and other connections to Australia should be treated the same;

adopting only objective criteria — removing any requirement to test intention or undertake broad, holistic examinations to promote simplicity, consistency and certainty.

The proposed model is intended to:

lead to more certain outcomes;

maintain existing outcomes (in a streamlined and simplified way) where appropriate in order to minimise disruption and revenue implications."

 

There's some great charts in the article that explain the differences very well, and a good flow chart you can do to see if you are a resident or non resident.  

 

As the proposals were tied to the budget, I would say the changes are a certainty, even with a change of government.  

 

 

 

[KhunHeineken]

5 minutes ago, giddyup said:

Are these the officers that are coming to Thailand to interview me. Seriously?

No, they are the officers that may / will be taking around 30% of what you currently transfer to Thailand, from dollar number one.  

[giddyup]

Just now, KhunHeineken said:

No, they are the officers that may / will be taking around 30% of what you currently transfer to Thailand, from dollar number one.  

I'll worry about it when it happens.

[Will27]

19 minutes ago, Lacessit said:

There's no debate about it, either it will happen or it won't.

That's what the debate is about.

[KhunHeineken]

27 minutes ago, giddyup said:

Well, they should have asked for that proof in the letter they sent, not just asked me to tick a box.

The bank forwards the information you supplied to the ATO.  The ATO cross references it with data bases, including immigration.   Up comes a red flag.  

[KhunHeineken]

13 minutes ago, giddyup said:

I'll worry about it when it happens.

How does the ATO contact someone like yourself to inform you it's happening?  

[giddyup]

8 minutes ago, KhunHeineken said:

The bank forwards the information you supplied to the ATO.  The ATO cross references it with data bases, including immigration.   Up comes a red flag.  

The ATO could do that anytime, they don't need me to tick a box to verify. The ATO already know I'm in Thailand, they sent me a letter 6 years ago (I'd already been here 6 years) telling me I owed them $600 from the sale of my house when I left the country. They also said they wouldn't pursue the matter, it was a very strange letter, but I paid them what I owed anyway.

[giddyup]

3 minutes ago, KhunHeineken said:

How does the ATO contact someone like yourself to inform you it's happening?  

They have my address.

[KhunHeineken]

22 minutes ago, Lacessit said:

In my case, they asked for proof afterwards. They have not done so in previous years.

I don't know if they are taking on the authority of the ATO to ask for proof because they wish to, or if it is with the ATO's blessing.

The form states there are penalties for making false statements, so I guess every person who has not lived in Australia for years is subject to those penalties if the ATO chooses to go down that path.

It's my understanding that the ATO has instructed the banks to ask everyone with an account that earns interest to declare their residency for tax purposes. 

 

This information is then sent to the ATO to be cross referenced, which is going to be a hell of a lot easier after the 183 day rule comes in.  The ATO will then instruct the banks to tax the interest at non resident rates of account holders outside of Australia for more than 183 day, and forward it to them. 

 

Given it's low interest rates at the moment, many expats won't care, but they then have you on the non resident Merry Go Round which will spread to other income you have.   

[Lacessit]

37 minutes ago, giddyup said:

The form only gave two options, resident or non resident, it never spelled out a distinction. It wasn't a Stat/dec so I can't see how I commited an offence.

Maybe you can't. However, the ATO can call it an offense if they choose to, and I guess they are the ones with the power of definition.

[KhunHeineken]

6 minutes ago, giddyup said:

The ATO could do that anytime, they don't need me to tick a box to verify. The ATO already know I'm in Thailand, they sent me a letter 6 years ago (I'd already been here 6 years) telling me I owed them $600 from the sale of my house when I left the country. They also said they wouldn't pursue the matter, it was a very strange letter, but I paid them what I owed anyway.

As I have posted before, under the old criteria, you could have said you have an intention to return, you may have still had a car, you may have a place to stay, you may still have a sim card, you have a bank account, and so on.  These could prove some intention, although after 12 years in your case, I doubt it.  All of this would be looked at.  That takes manpower and time, which may have not resulted in a financial outcome for them, so they didn't bother.

 

Fast forward to 2022 and the new 183 day law, and your residency for tax purposes is generated by computer data bases.  No manpower involved, and very timely.  It does away with your possible intentions, and doesn't care if you have a house to come back to, a car, a sim card, a bank account, and so on.

 

It only focuses on you were outside of Australia for more than 183 day.  Pretty much end of story.  This is enough for them to contact you and tell you that you haven't paid the appropriate tax and here your bill for what you have to pay as a non resident.  There's nothing an individual can do about it, because it can't be refuted.  How would one ask for a review, or appeal it, they can't.  

 

As for your circumstances, it remains to be seen how they will deal with government pensions, but I think the earnings of your super will be up for grabs.    

[LosLobo]

49 minutes ago, KhunHeineken said:

Ok, but that has nothing to do with residency for taxation purposes.  

 

We'll have to wait and see what they do with government pensions, but I would think your super pension would attract non resident taxation.  

Obviously you like to make stuff up!

 

"If you're age 60 or over, your entire benefit from a taxed super fund (which most funds are) is tax-free."

Retirement income and tax - Moneysmart.gov.au

 

[Will27]

17 minutes ago, KhunHeineken said:

It's my understanding that the ATO has instructed the banks to ask everyone with an account that earns interest to declare their residency for tax purposes. 

 

This information is then sent to the ATO to be cross referenced, which is going to be a hell of a lot easier after the 183 day rule comes in.  The ATO will then instruct the banks to tax the interest at non resident rates of account holders outside of Australia for more than 183 day, and forward it to them. 

 

Given it's low interest rates at the moment, many expats won't care, but they then have you on the non resident Merry Go Round which will spread to other income you have.   

Is this factual or are you guessing again?

[LosLobo]

Reserve Bank has increased Cash Rate and Scomo doesn't wants to increase Deeming Rates for those lucky enough on Aged Pension to have financial assets.

 

Scott Morrison announces $1300 cash sweetener for one million Aussies (msn.com)
 

[KhunHeineken]

1 minute ago, Will27 said:

Is this factual or are you guessing again?

All the banks have a page like this.

 

Here's Commbank's.  

 

https://www.commbank.com.au/about-us/opportunity-initiatives/opportunity-from-good-business-practice/sustainable-business-practices/fatca.html

 

Quote:

 

"New laws require you to tell us about your tax residency on account opening and to let us know if this changes

 

CommBank will need to report certain account information to the Australian Taxation Office (ATO)

 

The Australian Government has committed to a new global standard on the automatic exchange of financial account information.  Their aim is to cut down on tax evasion by sharing information about foreign tax residents with other tax authorities."

 

I've had my account/s for years.  They are obviously collecting the same information retrospectively. 

 

I have no doubt the ATO will use the information not only to work with other jurisdictions, but also for themselves, but this is my opinion, I don't have a link for it, so no need to call it out.  

[Will27]

5 minutes ago, KhunHeineken said:

All the banks have a page like this.

 

Here's Commbank's.  

 

https://www.commbank.com.au/about-us/opportunity-initiatives/opportunity-from-good-business-practice/sustainable-business-practices/fatca.html

 

Quote:

 

"New laws require you to tell us about your tax residency on account opening and to let us know if this changes

 

CommBank will need to report certain account information to the Australian Taxation Office (ATO)

 

The Australian Government has committed to a new global standard on the automatic exchange of financial account information.  Their aim is to cut down on tax evasion by sharing information about foreign tax residents with other tax authorities."

 

I've had my account/s for years.  They are obviously collecting the same information retrospectively. 

 

I have no doubt the ATO will use the information not only to work with other jurisdictions, but also for themselves, but this is my opinion, I don't have a link for it, so no need to call it out.  

You didn't really answer the question.

 

I'm talking about this part that you posted.

Where is that stated?

 

"The ATO will then instruct the banks to tax the interest at non resident rates of account holders outside of Australia for more than 183 day, and forward it to them." 

[KhunHeineken]

34 minutes ago, LosLobo said:

Obviously you like to make stuff up!

 

"If you're age 60 or over, your entire benefit from a taxed super fund (which most funds are) is tax-free."

Retirement income and tax - Moneysmart.gov.au

 

Your link is dealing with residents for taxation purposes.

 

Check out this link.

 

https://simplyretirement.com.au/tax-super-overseas

 

Quote:

 

"Additionally, should you draw a pension from an untaxed superannuation fund, and these are largely limited to Government, public sector funds, then you may be taxed on your pension on a non-resident basis in Australia should you retire overseas. Non-resident tax rates are higher than residents tax rates because there is no tax free alowance. That tax may, or may not, be available as a tax offset in the country of residency."

 

Also, Australia and Thailand have a tax treaty, but of course, this is nothing to worry about.

 

 

 

 

[giddyup]

37 minutes ago, KhunHeineken said:

As I have posted before, under the old criteria, you could have said you have an intention to return, you may have still had a car, you may have a place to stay, you may still have a sim card, you have a bank account, and so on.  These could prove some intention, although after 12 years in your case, I doubt it.  All of this would be looked at.  That takes manpower and time, which may have not resulted in a financial outcome for them, so they didn't bother.

 

Fast forward to 2022 and the new 183 day law, and your residency for tax purposes is generated by computer data bases.  No manpower involved, and very timely.  It does away with your possible intentions, and doesn't care if you have a house to come back to, a car, a sim card, a bank account, and so on.

 

It only focuses on you were outside of Australia for more than 183 day.  Pretty much end of story.  This is enough for them to contact you and tell you that you haven't paid the appropriate tax and here your bill for what you have to pay as a non resident.  There's nothing an individual can do about it, because it can't be refuted.  How would one ask for a review, or appeal it, they can't.  

 

As for your circumstances, it remains to be seen how they will deal with government pensions, but I think the earnings of your super will be up for grabs.    

How do they get their money, assuming I owed them something? Can they debit my bank accounts?