Australian Tax Office And The Overseas Investment

[Mermaid53]

I spoke to my tax agent here in Oz who tells me that if you invest in property overseas over the value of $50,000 you must pay declare it to the tax office and pay taxes and when you sell it then they want their pound of flesh then as well. Does creating a 'company' in Thailand still incur these rules as well; I should imagine it would be much the same, the Aus tax office would be on the ball here. Any of you guys out there encountered these issues and how do you deal with them and still make a profit or conduct the 'company'

cheers everyone.

[aussiedoug]

Australian tax law is based on RESIDENCY, that is where you actually live regularly for more than 6 months in any one year. There are some minor changes just recently that affect salaray earners that are usually resident in Australia, but they probably don't concern you. If you are a resident of Australia you have to declare your world wide income and the return specifically asks if you have any ASSETS overseas, and assets include shares, bank accounts and property. And if you buy and sell property there are capital gains taxes to pay,unless it is your principal place of living.

[Goinghomesoon]

There are a bunch of double-taxation issues to consider (ie: if you pay tax in one place, whether/when you can get credit for these in your Aust tax return). I'd imagine you really need an tax specialist used to dealing with this minefield, not your everyday H&R Block guy doing your taxes in these cases.

[hagler]

If you choose to declare your investment to the ATO then yes you will be subject to capital gains tax on the profits from the sale. However during the time of your ownership you will be able to claim the costs of ownership which would include amongst other things

the costs of making visits to your investment to check on its condition (think about that one)

the shortfall (if any) between income and outgoings

depreciation on chattels and fixed plant and equipment

repairs and maintenance

condo association costs

building depreciation @ 2.5% per annum

property leasing fees and costs

declaring an overseas property to the ATO has definately advantages if you work things correctly

[electau]

Here is the ATO page for investments overseas.

http://www.ato.gov.au/individuals/content.asp?doc=/content/64494.htm&mnu=43673&mfp=001/002