Australian Aged Pension

David Walden · June 24, 2018

1 hour ago, ELVIS123456 said:

I hear you that it is not easy to find, and not one financial adviser told me about this issue - maybe because I was not on the pension yet.

I assume the deeming income and asset for money held in Super when on the pension is clear.

I can assure you that a Super withdrawal is assessed as income by Clink when you are on the pension (been planing this a long time) - it is not when on Newstart and other payments.

I will find the relevant info on web later and post it (crook today) - but for now, be aware that if you take money out of Super it has to go into a bank account in your name (or a cheque that you will need to bank). I remember someone trying to hide it by signing the cheque to someone else, but they got caught - CLink is entitled to know everything that is relevent about your financial and employment and social situation, when you are receiving the pension. Banking records are easily obtained by CLink and they have access to your Super records too.

Sorry...money in super is your money you can do what you like with any tax on it has already been paid. Once it is taken out of a super fund, dividends on that money is now payable just like any other tax matter. (like share dividends) You take $200,000 out of your super whilst you are in retirement Centrelink will want to know what you are doing with it, like divesting you assets it to your kids but that nothing to do with tax. Ha, Ha, the Govt has instigated a tax on super by stealth. That is they have taken 15% of the profits before distribution from the Fund managers which you really don't see unless your super fund is grandfathered. This of course means if you have some other business activity which is running at a loss you cant offset that against those other losses...dangerous places for governments to be at. It's almost a tax on assets.

Edited June 24, 2018 by David Walden

ELVIS123456 · June 24, 2018

28 minutes ago, ELVIS123456 said:

Buggered if I can find the link - but it is there somewhere.

The link provided is the generic CLink rules/regs about income for all payments. When you are on the pension it changes fro many things, including Super withdrawals - but I cant find that link. Head not good I guess, but to back it up I can assure you that if you have $300K in Super and are on the Pension, if you withdrew $100K CLink would stop your pension payments - it would be classified as income.

As I have said above, the DHS/CLink link below provides generic information for all income support - it is not for age pensions as there have changed that and stopped millionaires taking out $100K a year and still getting the pension.

https://www.humanservices.gov.au/individuals/enablers/lump-sums-while-income-support/28961

And I have been searching DHS and cannot find anything - this is atypical of CLink - they dont tell the whole story (some sday deliberately mislead)

https://www.humanservices.gov.au/search/Lump sums while on pension?f[0]=field_dhs_audience_groups%3A36

This site used to be free - but they have recently started charging for their advice (no comment but I aint paying $130 a year)

https://www.superguide.com.au/accessing-superannuation/age-pension-income-test-does-my-superannuation-lump-sum-count

4myego - can you ask your adviser if lump sums taken out from Super when on the pension are classified as income - the taxable component that is.

If anyone else can find a DHS link, please post it.

David Walden · June 24, 2018

1 hour ago, ELVIS123456 said:

As I have said above, the DHS/CLink link below provides generic information for all income support - it is not for age pensions as there have changed that and stopped millionaires taking out $100K a year and still getting the pension.

https://www.humanservices.gov.au/individuals/enablers/lump-sums-while-income-support/28961

And I have been searching DHS and cannot find anything - this is atypical of CLink - they dont tell the whole story (some sday deliberately mislead)

https://www.humanservices.gov.au/search/Lump sums while on pension?f[0]=field_dhs_audience_groups%3A36

This site used to be free - but they have recently started charging for their advice (no comment but I aint paying $130 a year)

https://www.superguide.com.au/accessing-superannuation/age-pension-income-test-does-my-superannuation-lump-sum-count

4myego - can you ask your adviser if lump sums taken out from Super when on the pension are classified as income - the taxable component that is.

If anyone else can find a DHS link, please post it.

This is really a ATO matter...If you have a million dollars and own a house you live in you will not get any pension. I believe you can cash in you super if you are under retirement age but you would be hit with crippling tax so high that the the ATO would get most of. If you have been paying into a super fund for 20 years most of it but likely all that money got their tax free from your boss (politicians excepted). If you are well under retirement age and take it out it is likely that the tax you should have paid will now have to be paid. It would just be other income that you received that you did not pay tax on in years gone by. If your on low income you might get some money, if your a FIFO worker on max tax rate 48% or so the ATO would get most of it. When you reach retirement age all changes and you can get the lot tax free.

You have to download 5% of the total balance as at 1st July each year (6% if over 75y/o). You can't just leave the money there in a tax free zone for ever compounding for your kids in 20 years time(tax is now 15 % on profits by stealth). I you don't take the required download I believe you will be taxed about 48% direct from your super fund on what you were required to download.

PS...not many accountants who do accounts and tax returns for people have got much idea about Aged Pension matters.

Edited June 24, 2018 by David Walden

David Walden · June 24, 2018

6 hours ago, ELVIS123456 said:

As I have said above, the DHS/CLink link below provides generic information for all income support - it is not for age pensions as there have changed that and stopped millionaires taking out $100K a year and still getting the pension.

https://www.humanservices.gov.au/individuals/enablers/lump-sums-while-income-support/28961

And I have been searching DHS and cannot find anything - this is atypical of CLink - they dont tell the whole story (some sday deliberately mislead)

https://www.humanservices.gov.au/search/Lump sums while on pension?f[0]=field_dhs_audience_groups%3A36

This site used to be free - but they have recently started charging for their advice (no comment but I aint paying $130 a year)

https://www.superguide.com.au/accessing-superannuation/age-pension-income-test-does-my-superannuation-lump-sum-count

4myego - can you ask your adviser if lump sums taken out from Super when on the pension are classified as income - the taxable component that is.

If anyone else can find a DHS link, please post it.

4myego - can you ask your adviser if lump sums taken out from Super when on the pension are classified as income - the taxable component that is...No, no,no.

If you take $100,000 out of your super fund you are taking money out of a fund the same as if from a bank a/c, it is not taxable, any interest you receive after is, it's your money and and tax commitments has been paid when you put it in, it is suppose to be a tax free area ...The money in your super fund is your money to do as you wish with it, tax has been paid on it, it is exempt from tax, and it was free of tax until recently. Contribution of the 9% super contribution are not taxed when your boss puts it in, above 9% yes. If you take this money out of your super fund it may make your assets outside the single pension threshold suspect ($456,750) and Centrelink will want to know why that's not ATO. If it is now outside the fund, the Centrelink assets test may now come into play. You don't pay tax on super downloads if your super account is grandfathered. You will be taxed by stealth if it is not grandfathered. That is the ATO will take the 15% TAX from the super fund dividends (not the balance just the dividends) and you will think you paid no tax at all, but it was 15% of the profit which suddenly disappeared from you super account before you new it, it was forwarded by the super fund to the ATO. and no tax credits are available for other business transactions, just like the 3 card trick and you may think you paid no tax on it at all, most don't.. Both major parties in Australia are party to this scam?...it is a scam, for many years both major parties said "no tax is payable of super downloads". But they lied.

I noticed that when I got my last financial statement from my super fund about 3 weeks after it was available Centrelink had already been advised what my balance was nearly 3 weeks earlier then me. They new before me. My statement information had already been recorded on my Centrelink account..

4MyEgo · June 24, 2018

15 hours ago, ELVIS123456 said:

Dont forget to declare it in your tax return for this/next year - it will be taxable income, but the tax will be offset to zero.

Ask him toicheck out if a medicare payment is required - my understanding is that it will for such a large amount - but things may have changed and I could be recalling that incorrectly.

So far I have taken out over $300K from Super - did a chunk before I was 60 and a couple of bigger chunks since then.

No tax - so far - this year is a biggie, so maybe Medicare Levy is payable - not sure - but it wont be much.

Excellent advice Elvis as always.

As I am a non resident for tax purposes, I know I won't be up for any tax on Medicare, however Australian residents are, so look out for that one.

My main issue is the tax as a non resident, as it clearly say any income derived within Australia, I suppose superannuation is not income, its savings with some $'s added over the years, so I suppose it is income, but if that income was from the ASX which 99.9% it was, there is no tax payable for non residence.

Once I get confirmation from my accountant, I will let you know, because if there is tax payable on it, I will leave it till I am 60, that said, I might even leave it in there indefinitely as an emergency back up, and if I do shift my funds 5 years before hand i.e. 2023, and then return to Australia in 2025 for a couple of years, I could draw down on the super while on Newstart, i.e. if they don't knock me back because I have super that I haven't taken, or reduce the Newstart allowance which is peanuts anyway, either way, the money could be used for survival money while waiting for the AAP, Buddha willing and if I don't get there, the Mrs can have it as a bonus....lol 4 kids to kids to raise.

Edited June 24, 2018 by 4MyEgo

Nemises · June 25, 2018

This article, although dated 2015, is still doing the rounds on FB today...

“Australians can forget about relying on the age pension when they retire, according to Federal Treasurer Scott Morrison.

Echoing his predecessor Joe Hockey's pledge about the age of entitlement being over, in a speech on Friday Mr Morrison said the age pension should no longer be seen as an entitlement but "a welfare payment for those who do not have the ability to save enough to fund their own retirement".

https://www.9news.com.au/national/2015/11/30/21/01/morrison-says-age-of-entitlement-with-pension-over

https://auforum.net/d/55-the-truth-about-pensions-defies-the-lies-of-our-leaders

moojar · June 25, 2018

^

Quote

Mr Morrison said the federal government intends to change the definition of superannuation in law next year, to better enshrine the idea a self-funded retirement was a "worthy prize".

Ah <deleted>, here it comes.

And I wonder how long before they jack the preservation age up to be closer to the pension age.

nev · June 25, 2018

7 hours ago, Gregster said:

This article, although dated 2015, is still doing the rounds on FB today...

“Australians can forget about relying on the age pension when they retire, according to Federal Treasurer Scott Morrison.

Echoing his predecessor Joe Hockey's pledge about the age of entitlement being over, in a speech on Friday Mr Morrison said the age pension should no longer be seen as an entitlement but "a welfare payment for those who do not have the ability to save enough to fund their own retirement".

https://www.9news.com.au/national/2015/11/30/21/01/morrison-says-age-of-entitlement-with-pension-over

https://auforum.net/d/55-the-truth-about-pensions-defies-the-lies-of-our-leaders

These Muppets who get elected get their pension early and are now trying to say we after working our whole working life are not entitled to get a pension, How about they bring in a law saying they have to wait until they are 70 like everyone else.

ELVIS123456 · June 25, 2018

I have not voted Labor for a long time, but I am more convinced that, at least in the Senate, we would all be better off we all voted Labor. If Labor can get a majority in the Senate (or close to it) they will block all these draconian measures that the Libs are proposing, and any others they will propose. But if Labor wins in the House and forms Govt, I am worried they may not be a good thing for the economy, and that they will introduce the changes anyway. It was Labor that increased the pension to 67 in 2009, catching everyone by surprise.

And keep in mind that in 2010 Labor under Rudd was also looking at increasing the age to be able to access Superannuation to 67, in line with the pension, and the Libs under Turnbull supported that idea. Luckily they were both thrown out of the leadership not long after that, and things stayed stagnant for a while. But now the Libs are looking for more and more ways to cut costs, and increasing the pension age to 70 is seen as one way to do that and it is the official policy of the Libs.

The reality is that the Govt (both sides when they are in Govt) see the pension as a huge drain on the budget , and will introduce more and more changes to try and reduce that drain. I tell my kids to prepare for the reality that they will not be able to access the pension or their Super (except for severe financial hardship) until they are 70, and to try and make sure they dont lock away too much of their money in Super like I did (get a rental portfolio) and to try and have employment security when they are over 50 - with a very good redundancy arrangement (Govt job?).

Things are not going to stay the same guys, and they wont change for the better. 50 years ago there was 5 workers to 1 pensioner, but by 2030 there will be only 2 to 3 workers for each pensioner. And people are living twice as long as they used to after retirement than they did 50 years ago. The costs of the pension and the associated health bills are becomming unsustainable as each decade passes. That is the number one reason why Aust now allows so many immigrants into the country.

IMO the only way forward is to plan ahead and stay across all the changes and the proposed changes, and to take whatever action you need to do to maxmise whatever benefits and support you can get as you get older. I agree that anyone who has worked for 35-40 years should be looked after by the Govt, but the Govt doesnt see it that way anymore - they mainly see the costs (and they dont notice the downsides to their changes as they are not personally affected).

However, there is always hope that another worldwide economic boom takes place and that China, Japan and Europe follow USA's recent economic growth - and that will lead to budget surpluses in Australia and the Govt will back off for a while - till the next downturn anyway. But it would be better if the older generation (50+) became politically active and voted according to their best interests. Unfortunately the old Pensioners Association became worse than the factions in the Federal Labor Party and self imploded to become National Seniors Association, which is more concerned about issues like healthy lifestyles, community facilities, cheaper wines/insurance/travel and recognising traditional ownership of the land, than they care about political action to protect the interests of older people against the b****ards in Canberra.

Edited June 25, 2018 by ELVIS123456

4MyEgo · June 28, 2018

On 6/25/2018 at 2:28 AM, David Walden said:

4myego - can you ask your adviser if lump sums taken out from Super when on the pension are classified as income - the taxable component that is...No, no,no.

If you take $100,000 out of your super fund you are taking money out of a fund the same as if from a bank a/c, it is not taxable, any interest you receive after is, it's your money and and tax commitments has been paid when you put it in, it is suppose to be a tax free area ...The money in your super fund is your money to do as you wish with it, tax has been paid on it, it is exempt from tax, and it was free of tax until recently. Contribution of the 9% super contribution are not taxed when your boss puts it in, above 9% yes. If you take this money out of your super fund it may make your assets outside the single pension threshold suspect ($456,750) and Centrelink will want to know why that's not ATO. If it is now outside the fund, the Centrelink assets test may now come into play. You don't pay tax on super downloads if your super account is grandfathered. You will be taxed by stealth if it is not grandfathered. That is the ATO will take the 15% TAX from the super fund dividends (not the balance just the dividends) and you will think you paid no tax at all, but it was 15% of the profit which suddenly disappeared from you super account before you new it, it was forwarded by the super fund to the ATO. and no tax credits are available for other business transactions, just like the 3 card trick and you may think you paid no tax on it at all, most don't.. Both major parties in Australia are party to this scam?...it is a scam, for many years both major parties said "no tax is payable of super downloads". But they lied.

I noticed that when I got my last financial statement from my super fund about 3 weeks after it was available Centrelink had already been advised what my balance was nearly 3 weeks earlier then me. They new before me. My statement information had already been recorded on my Centrelink account..

My accountant is as usless as tits on a bull sometimes, and is being very vague on this, suffice to say when I quizzed on preservation age and lump sum superannuation payouts, i.e. would I pay tax on a lump sum payout under the $200,000 threshold as a non resident, he just ducked and weived, which didn't assist me.

I spoke to my superannuation fund today and they said mate, you have reached preservation age, tax has been paid on your super, you can take up to $200,000 and pay no tax, after that amount you will pay tax on the balance if you take it, or leave it till your 60 and then pay no tax on that. This is what ELVIS123456 basically said in one of the other posts, that said, I asked if I would have to pay any further tax to the tax man and the guy said, its not his area and couldn't comment on it and reiterated what he said above.

I have Googled just about everything on non residents paying tax on lump sum super and cannot find anything concrete to say I will pay tax having reached preservation age and taking up to the threshold amount of $200,000, so as far as I am concerned, there is no tax payable on it for Australian or non residents and I am not going to wait around for these clowns to change the goal posts once again, that said I will wait till Monday, so I go into the new financial year when I take up to the threshold amount, because as I read, I have to lodge a tax return noting that I took the lump sum, but from my recollection, non residents do not have to lodge a tax return, unless they have earned an income from Australia, and you cannot say super is classed as an income, well, I would at least hope not.

Sorry I cannot answer your question regarding taking super while your on the pension, but I would imagine Centrelink would deem any money, be it super or anything else as an asset ?

4MyEgo · June 28, 2018

On 6/25/2018 at 4:28 PM, moojar said:

^

Ah <deleted>, here it comes.

And I wonder how long before they jack the preservation age up to be closer to the pension age.

Take it now if you have reached preservation age, I reached it and come Monday will be taking up to $200,000 (the threshold) so I don't pay any tax, the balance I will wait till I am 60 in 2 years so I don't pay any tax on the balance. They can have my left one before I give them any tax on what I put into my super.

Edited June 28, 2018 by 4MyEgo

ELVIS123456 · June 28, 2018

12 minutes ago, 4MyEgo said:

My accountant is as usless as tits on a bull sometimes, and is being very vague on this, suffice to say when I quizzed on preservation age and lump sum superannuation payouts, i.e. would I pay tax on a lump sum payout under the $200,000 threshold as a non resident, he just ducked and weived, which didn't assist me.

I spoke to my superannuation fund today and they said mate, you have reached preservation age, tax has been paid on your super, you can take up to $200,000 and pay no tax, after that amount you will pay tax on the balance if you take it, or leave it till your 60 and then pay no tax on that. This is what ELVIS123456 basically said in one of the other posts, that said, I asked if I would have to pay any further tax to the tax man and the guy said, its not his area and couldn't comment on it and reiterated what he said above.

I have Googled just about everything on non residents paying tax on lump sum super and cannot find anything concrete to say I will pay tax having reached preservation age and taking up to the threshold amount of $200,000, so as far as I am concerned, there is no tax payable on it for Australian or non residents and I am not going to wait around for these clowns to change the goal posts once again, that said I will wait till Monday, so I go into the new financial year when I take up to the threshold amount, because as I read, I have to lodge a tax return noting that I took the lump sum, but from my recollection, non residents do not have to lodge a tax return, unless they have earned an income from Australia, and you cannot say super is classed as an income, well, I would at least hope not.

Sorry I cannot answer your question regarding taking super while your on the pension, but I would imagine Centrelink would deem any money, be it super or anything else as an asset ?

I found all accountants (2) and financial advisers (2) that I used in the years leading up taking early retirement as useless as cow manure on a blanket. They will only ever limit their answers to yes or no (just like CLink financial advisers). They did not and would not take my situation and otpions and tell me the best way and why. They only ever gave generic and heavily caveated advice. That is why I did it myself and spent over a year researching and learning - and there aint no easy way and no single source - but it is worth it knowing where to look.

So having read your post 4myego and having a think, I now have a concern. No concerns about not payiog tax on the Super withdrawals, that is as I said - guaranteed or double your money back ? . No - my concern is that you may become a tax resident again once you do that - would that affect your franked dividends in any way? Would that make you liable for medicare levy etc. whereas as a non resident you are not? That is not my area of knowledge but I thought I would raise the matter.

Once you withdraw the funds, your Super fund will report your withdrawal/s to ATO at the end of the financial year. When I do my tax returns online, ATO already has the details of my Super withdrawals. Therefore would ATO automatically determine that you are now a tax resident - I would think that they would. Dont know - best to ask them I guess - unlike CLink they will answer hypothetical questions. And if you were a tax resident would that affect you?

Nemises · June 28, 2018

Just wondering if anyone knows what would happen in this situation:

You’re living in Thailand on the full AAP having obtained portability some years earlier when you inherit, let’s say $AUD100, 000. You advise Centrelink of the inheritance (which your obliged to do) and they stop your pension as you no longer meet the assets’ tests thresholds.
Q: after you’ve blown the $100k and tell Centrelink, will they begin to start paying your AAP benefits again or do you have to reapply for the AAP?

4MyEgo · June 29, 2018

12 hours ago, ELVIS123456 said:

I found all accountants (2) and financial advisers (2) that I used in the years leading up taking early retirement as useless as cow manure on a blanket. They will only ever limit their answers to yes or no (just like CLink financial advisers). They did not and would not take my situation and otpions and tell me the best way and why. They only ever gave generic and heavily caveated advice. That is why I did it myself and spent over a year researching and learning - and there aint no easy way and no single source - but it is worth it knowing where to look.

So having read your post 4myego and having a think, I now have a concern. No concerns about not payiog tax on the Super withdrawals, that is as I said - guaranteed or double your money back ? . No - my concern is that you may become a tax resident again once you do that - would that affect your franked dividends in any way? Would that make you liable for medicare levy etc. whereas as a non resident you are not? That is not my area of knowledge but I thought I would raise the matter.

Once you withdraw the funds, your Super fund will report your withdrawal/s to ATO at the end of the financial year. When I do my tax returns online, ATO already has the details of my Super withdrawals. Therefore would ATO automatically determine that you are now a tax resident - I would think that they would. Dont know - best to ask them I guess - unlike CLink they will answer hypothetical questions. And if you were a tax resident would that affect you?

Hey mate I did Iodge two years tax returns here as a non resident as I had some clients wanting me to do some work for them, and of course I did, so the ATO already knows that I am a non resident for tax purposes.

I appreciate the concerns, but doubt the ATO can tax me anything on the $200k as its says everywhere that I have looked that it is a non taxable component if you have reached preservation age, which I have and its under the threshold.

My residency won't change because I am taking part of my super, as it doesn't stipulate anywhere that you have to be an Australian resident or non resident to take you super out and or pay tax on any amount under the threshold amount, although as you know it says you must pay tax on the amount above the threshold if you touch that amount if you are under 60, over 60 is the home stretch with no tax payable, that said, this applies to super funds that have already paid tax on your behalf, eg tax on the amounts you paid into your super on each occasion over the years.

I called the super fund this morning and as it will take 3-5 days to process and the funds be put into my account, that should fall within the new financial year so when I do lodge a tax return for the 2019 year, I will make sure it will show the funds from the super, but no income, just to make sure they don't have the opportunity to amalgamate any income as they would normally do, I think ?

4MyEgo · June 29, 2018

13 hours ago, Gregster said:

Just wondering if anyone knows what would happen in this situation:

You’re living in Thailand on the full AAP having obtained portability some years earlier when you inherit, let’s say $AUD100, 000. You advise Centrelink of the inheritance (which your obliged to do) and they stop your pension as you no longer meet the assets’ tests thresholds.
Q: after you’ve blown the $100k and tell Centrelink, will they begin to start paying your AAP benefits again or do you have to reapply for the AAP?

I would like to believe that as your circumstances change again, i.e. you have blown the money, you let them know and they adjust your AAP benefits back to where they should be. Might want to know what you did with the money, so have that one ready to answer, and make sure its a good one, i.e. had a big night out on the turps with a few mates....lol

Edited June 29, 2018 by 4MyEgo

sceadugenga · June 29, 2018

I suspect that only the income from that amount of money will matter, and it will be deemed at a certain rate.

LosLobo · June 29, 2018

16 hours ago, Gregster said:

Just wondering if anyone knows what would happen in this situation:

You’re living in Thailand on the full AAP having obtained portability some years earlier when you inherit, let’s say $AUD100, 000. You advise Centrelink of the inheritance (which your obliged to do) and they stop your pension as you no longer meet the assets’ tests thresholds.
Q: after you’ve blown the $100k and tell Centrelink, will they begin to start paying your AAP benefits again or do you have to reapply for the AAP?

....as you no longer meet the...…. "income or"...…. assets’ tests thresholds.

Interesting hypothetical.....

Evidently once you lose the pension you have to re-apply if you become eligible again.

It would be interesting if overseas residents who already have gained portability would have to return to Australia to re-apply and wait two years.

Nemises · June 29, 2018

It would be interesting if overseas residents who already have gained portability would have to return to Australia to re-apply and wait two years.

BINGO!!! Portability.

That’s exactly why I posted. Am very keen to know if I would have to go back do ANOTHER freaking 2 years home detention!!!

LosLobo · June 29, 2018

29 minutes ago, Gregster said:

BINGO!!! Portability.

That’s exactly why I posted. Am very keen to know if I would have to go back do ANOTHER freaking 2 years home detention!!!

The pension is available to returning residents who intend to permanently live in Australia.

Returning the second time around could be problematic.

Nemises · June 30, 2018

Returning the second time around could be problematic.

Yes, agree. So that would mean anyone living overseas and receiving the AAP would lose their pension forever should they receive a large inheritance if they wanted keep living overseas and not go back to live in Australia.

Unless... you DON’T have to reapply for the AAP after blowing the inheritance because Centrelink reduces/suspends your payments until you meet income/assets thresholds again.

Anyone know for sure if you have to reapply for AAP after spending an inheritance or does your AAP benefits just start up again once you’ve satisfied Centrelink you’ve actually spent the inheritance and not hidden/gifted it?

hagler · June 30, 2018

On 6/24/2018 at 10:05 AM, 4MyEgo said:

I like the sound of that, i.e. less than $200,000, no tax

So I can take out up to $200,000 now and pay no tax, wait to 60 to get the balance and pay no tax.

I was born after 1960, and based on the above, I could take out up to $200k without paying any tax as I have reached preservation age according to my calculations.....hmm, things must have changed since I last spoke to my accountant a few years ago, because he said as a non resident I would pay 32.5c in the $.

Will send him an email now and see what he says, because if I can take that amount out, without paying tax, I would be better off investing it.

Just to clear the air on the tax component here, its 32.5% if you hold a shares that are unfranked, meaning the company doesn't pay the tax on it when it pays you the dividend, like a fully franked dividend share does, i.e. pays the tax before it pays you your dividend (tax paid), so long as you sell the unfranked share before it pays its unfranked dividend you won't pay tax on it, unless you want to hold the share while it rises, pays its unfranked dividend and you pay the tax of 32.5% on it, remember, there is no capital gains tax payable on shares, and so as long as you stay within the boundaries of fully franked dividends your ok as far as no tax is payable.

I understand what your saying about Labour and Liberal thinking to start charging foreigners tax on investing in the ASX, but personally, I can't see that happening, for the reason being, that a hell of a lot of money would leave the ASX which would not be good for a lot of Australian companies, perhaps an ASX crash would happen.

So I am not fussed about their talk on this, besides the money to be made in the ASX is very good if you invest wisely, especially as there is no "current" tax payable for foreign residence, especially when you convert the money made to live in Thailand.

The difference is cut and dry, i.e. if I held onto my property, I would be paying 32.5% in tax, plus water and council rates, annual foreign resident land tax, levies if strata titled, insurances, maintenance, agents management fees, agents reletting fees, advertising fees, taking vacancy factors into consideration (if any), accountants fees and finally capital gains tax when you sell, so when you add the above, your at 50% plus and that doesn't take into capital gains tax into consideration because it only comes into play when you sell, so when you sell, it could go as high as 60%-70%-80% annualised, whereas the ASX is zero $, I know it sounds crazy, but it is the only loophole there is out there for us Xpats who may have some coins from all those hard years of working and being fortunate enough to have purchased property as an investment or place to live in, then being forced to sell because of the ATO's residency laws.

Getting rid of the funds as least 5 years prior, applying for the AAP as it is now referred to, and then getting the funds back, might be a bit sticky as you said in another post of mine, will just have to keep chipping away at the blackboard for fresh ideas, maybe a trust for the kids, the accountant will have to come up with some brainstorm idea I guess, Singapore perhaps, then back here in Thailand, who knows, not far off, 4 years to get rid of it, and no, will not be sending you guys any, nothing to do with trust 555

There is a lot of "misinformed facts" in a lot of what you have said. Not going to go into it in detail but an example would be that shares don't attract CGT. They do,

I would suggest you get professional informed and competent advice on on the taxation in relation to real estate , CGT, foreign residency requirements and obligations at a point in the near future before you make some serious missteps. And yep I am a practicing professional in that world. And no I'm not seeking new clients

Best of luck to you and hope you get things sorted properly

4MyEgo · June 30, 2018

2 hours ago, hagler said:

There is a lot of "misinformed facts" in a lot of what you have said. Not going to go into it in detail but an example would be that shares don't attract CGT. They do,

I would suggest you get professional informed and competent advice on on the taxation in relation to real estate , CGT, foreign residency requirements and obligations at a point in the near future before you make some serious missteps. And yep I am a practicing professional in that world. And no I'm not seeking new clients

Best of luck to you and hope you get things sorted properly

That's a pretty big statement for someone who says they are a practising professional, to add to that, you say there is a lot of "misinformed facts" in a lot of what I have said.

Well, read till the link below till your hearts content, then maybe you can respond, although I do note that you did say your not going to get into it, but please do, because you say you are a practising professional, which I don't believe one bit.

As a foreign resident you do not pay capital gains tax on the sale of shares, you do not pay tax on fully franked dividends (tax paid already), the only tax you will pay on shares is if they are unfranked, i.e. the tax hasn't been paid on them by the company, as for real estate you will pay tax through the nose, including capital gains tax on the sale of the asset, you will also pay a 10% withholding tax on term deposits, you will pay tax on income earned within Australia, excluding shares as I mentioned above.

Perhaps you can back it up with a single link as I have done, noting that I am not qualified, although have had this all cleared by my CPA.

https://www.ato.gov.au/Business/International-tax-for-business/In-detail/Australian-income-of-foreign-residents/Tax-on-Australian-income-for-foreign-residents/

ELVIS123456 · June 30, 2018

On 6/29/2018 at 1:23 PM, LosLobo said:

....as you no longer meet the...…. "income or"...…. assets’ tests thresholds.

Interesting hypothetical.....

Evidently once you lose the pension you have to re-apply if you become eligible again.

It would be interesting if overseas residents who already have gained portability would have to return to Australia to re-apply and wait two years.

Firstly, once you lose the pension you are obliged to reapply. You cannot apply for the pension while living overseas. So yes, you would have to return and apply (and again prove you are staying), and then wait another 2 years before getting portability. That is a catch 22.

Secondly, the $100K or more would be more likely to affect you going forward as an income, than as an addition to your assets. The asset limits for the pension are rather large and unless you have a lot of money already, then it should opnly reduce the pension - and as long as you get a small amount of pension, then you dont have to reapply. However, unless you spend the $100K on approved things (approved by CLink), then CLink can determine that a percentage of the $100K is deemable (for a long time) - and you spending it on a world cruise will not change that deeming. This will give you additional income (deemed income) and you may lose more pension from the income than from the asset test. It all depends on the person's situation.

https://www.humanservices.gov.au/individuals/enablers/lump-sums-while-income-support/28961

Nemises · July 1, 2018

Thanks once more Elvis. You’re all over this topic.

Would be good to know how you’re keeping occupied and/or enjoying home detention....

Artisi · July 1, 2018

16 minutes ago, Gregster said:

Thanks once more Elvis. You’re all over this topic.

Would be good to know how you’re keeping occupied and/or enjoying home detention....

Think it's obvious how he keeps occupied ?

ELVIS123456 · July 1, 2018

11 hours ago, Gregster said:

Thanks once more Elvis. You’re all over this topic.

Would be good to know how you’re keeping occupied and/or enjoying home detention....

Playing golf, eating Thai food, Thai massages, Fishing, Movies, watching sports (on Aust wonderful broadband), travelling a bit, going new places, meeting new people - all the usual.

The town I moved to has no speed cameras and most people are fairly relaxed - which is a great improvement over where we used to live.

I dont watch/listen to the Aust news - ever. And we avoid all the negatives as much as possible - not easy, as there is so much negativity here - so much fake/PC news.

The wife and I miss Thailand, but we are enjoying life while we wait and prepare.

ELVIS123456 · July 1, 2018

Just now, ELVIS123456 said:

Playing golf, eating Thai food, Thai massages, Fishing, Movies, watching sports (on Aust wonderful broadband), travelling a bit, going new places, meeting new people - all the usual.

The town I moved to has no speed cameras and most people are fairly relaxed - which is a great improvement over where we used to live.

I dont watch/listen to the Aust news - ever. And we avoid all the negatives as much as possible - not easy, as there is so much negativity here - so much fake/PC news.

The wife and I miss Thailand, but we are enjoying life while we wait and prepare.

Oh - and doing lots of paperwork and getting/keeping across all the rules.

Right now we are finishing the application for the wife's permanent residence.

I was explaining to the wife (trying) the details of one of the things I had to organise, and why - her answer summed it up perfectly:

"Your country is too much trouble".

Nemises · July 2, 2018

Playing golf, eating Thai food, Thai massages, Fishing, Movies, watching sports (on Aust wonderful broadband),

Haha re “wonderful” Aust broadband. Yes, what a joke it is in Aust.

Thai massages in Aust!? At what price...$A70.00 (1,600 baht) per hour?!?- sounds like you’re spending up big to get under that pension asset test :)

Enjoy mate [emoji106]

ELVIS123456 · July 2, 2018

7 hours ago, Gregster said:

Haha re “wonderful” Aust broadband. Yes, what a joke it is in Aust.

Thai massages in Aust!? At what price...$A70.00 (1,600 baht) per hour?!?- sounds like you’re spending up big to get under that pension asset test :)

Enjoy mate

Funny story about 'broadband' that I tell Aussies.

I was looking at getting internet in Chiang Mai and noticed fibres in the gated community. Asked the manager and she said most are 3BB fibres. Went to 3BB at 11am next day and applied for a new fibre internet service. After paperwork and deposit I asked "when?". She said 4. I said "4? when?" She looked at me funny and said "Two day is O K?" I was stunned - said yes thank you. Didn't really believe it but was home at 3pm and install guys arrived and connected fibre into the house. 3.30pm and two techs arrived with fibre modem and set it up. I got 100Mbps unlimited data fibre internet for less than $40 a month installed in less than 6 hours !!

They cannot believe it and many get annoyed about NBN and how long it takes and how expensive it is. I love telling the story. ?

I am on ADSL here - get about 8Mbps and ity costs me over $100 a month. NBN 'should' be here by December and I 'could' get 50Mbps for about the same price. ?

Nemises · July 2, 2018

Funny story about 'broadband' that I tell Aussies.
I was looking at getting internet in Chiang Mai and noticed fibres in the gated community. Asked the manager and she said most are 3BB fibres. Went to 3BB at 11am next day and applied for a new fibre internet service. After paperwork and deposit I asked "when?". She said 4. I said "4? when?" She looked at me funny and said "Two day is O K?" I was stunned - said yes thank you. Didn't really believe it but was home at 3pm and install guys arrived and connected fibre into the house. 3.30pm and two techs arrived with fibre modem and set it up. I got 100Mbps unlimited data fibre internet for less than $40 a month installed in less than 6 hours !!

They cannot believe it and many get annoyed about NBN and how long it takes and how expensive it is. I love telling the story. [emoji16]

I am on ADSL here - get about 8Mbps and ity costs me over $100 a month. NBN 'should' be here by December and I 'could' get 50Mbps for about the same price. [emoji53]

I also have a story to share about the Internet in Thailand...

In Australia I was forever paying penalty fees for exceeding my 50 Gb monthly download allowance.

So upon applying for 3BB cable internet in Thailand at a fraction of Aus price, I asked the sales person about download limits (because I want to download movies).

The 3BB sales person had absolutely no idea what “download limits” meant so she asked the store manager and the SM said the same thing.

I said I’m not signing up until I know exactly what my monthly download limit was. The SM rang the BKK Head Office and said words to the effect of “we have crazy farang in shop talk about download limit, what TF he talking about”.

After a lengthy talk with BKK H.O. store manager say to me “sir, you in Thailand now, not Australia. We no hab download limit”

I couldn’t sign quick enough and have enjoyed an UNLIMITED 50Mbps cable service ever since for a whopping 631b per month.

My Aussie LIMITED 50Gb plan @ 8Mbps cost me 1,600b per month.

Sign In

Australian Aged Pension

Recommended Posts

Top Posters In This Topic

Popular Days

Top Posters In This Topic

Popular Days

Popular Posts

Ron19

scorecard

sceadugenga

Posted Images

Create an account or sign in to comment

Create an account

Sign in

Recently Browsing 0 members

Announcements

Topics

Latest posts...

Popular in The Pub

ASEANNOW

MORE INFO

POPULAR AREAS

CONTACT US