Are You A Sexpat Or Do You Ride The Backwards Morality Train?

[Naam]

Hi Naam,

So how can one avoid the annoying tax deduction on AUD deposits? I have checked offshore AUD term deposits but not found any that give the same interest rate as onshore AUD's.

if you just compare the interest rates you are comparing apples with pears. there's much more to take into consideration, e.g. maturities, penalties if fixed maturity is broken, being able to convert and swift your dough half around the world with a simple instruction, bank's rating, etc., etc., etc.

[necronx99]

Hi Naam,

So how can one avoid the annoying tax deduction on AUD deposits? I have checked offshore AUD term deposits but not found any that give the same interest rate as onshore AUD's.

That would be tax evasion and is generally frowned upon. Any bank account, even one opened by an Aust resident will have tax on interest deducted if you don't supply a tax file number.

you are entitled to the award "possesses a wealth of no idea as far as offshore banking and taxes are concerned".

Meh.. I only go by what the people who take it off you say. In general, if you open an account and do not declare a TFN or declare yourself non-resident the institution will withhold tax. You can obtain A TFN and declare it, then you will need to put a tax return in.

Interest, unfranked dividends and royalties

If you are a foreign resident, tax is generally withheld in Australia from interest, unfranked dividends and royalties you earn in Australia.

You don't need to lodge an Australian income tax return if the only Australian-source income you earn is interest, dividends or royalties on which foreign resident withholding tax has been correctly withheld. Such income does not need to be included in an Australian income tax return.

Tax should be withheld by the payer at the following rates:

<a href="http://www.ato.gov.au/businesses/content.aspx?doc=/content/64162.htm">http://www.ato.gov.au/businesses/content.aspx?doc=/content/64162.htm

[Naam]

In general, if you open an account and do not declare a TFN or declare yourself non-resident the institution will withhold tax. You can obtain A TFN and declare it, then you will need to put a tax return in.

"12DrinkMore" and i were clearly referring to locations and their banks outside Australia where rubbish such as TFNs and crap like withholding tax is virtually unknown except if the financial Gods punished you with U.S. citizenship or being a U.S. Person (two different pairs of shoes).

[necronx99]

In general, if you open an account and do not declare a TFN or declare yourself non-resident the institution will withhold tax. You can obtain A TFN and declare it, then you will need to put a tax return in.

"12DrinkMore" and i were clearly referring to locations and their banks outside Australia where rubbish such as TFNs and crap like withholding tax is virtually unknown except if the financial Gods punished you with U.S. citizenship or being a U.S. Person (two different pairs of shoes).

I don't read it that way, he thought he could avoid ATO withholding tax and get the same return by opening an offshore aud account, but of course it doesn't work that way, the attractive Australian rate being tied to the domestic economy, not the currency. But no matter.

Why is it when I read your posts you sound just like Warf....

[Naam]

Why is it when I read your posts you sound just like Warf....

because i AM Worf. Naam is just my nom de guerre for Thaivisa use

p.s. because the glass of Port i am presently sipping tastes especially good today i will refrain from commenting on "the attractive Australian rate being tied to the domestic economy, not the currency".

[OZEMADE]

You can get 5.50% for a fixed time of 4 months at the Queensland Country Credit Union. (QCCU)

http://www.qccu.com.au/

There are possibly other Credit Unions and Banks in Australia offering the same or better.

[mommysboy]

I can see it remaining high for some time to come, but as water boy points out it has a history of volatility. Won't last, but what does? Certainly better than the Euro Peso.

[Naam]

I can see it remaining high for some time to come, but as water boy points out it has a history of volatility. Won't last, but what does? Certainly better than the Euro Peso.

based on what assumption?

[OriginalPoster]

You can get 5.50% for a fixed time of 4 months at the Queensland Country Credit Union. (QCCU)

http://www.qccu.com.au/

There are possibly other Credit Unions and Banks in Australia offering the same or better.

How about outside Australia? Looks like DBS and OCBC in Singapore are paying about 3.9 to 4%; FXA in the US presently about 3.8%; Bangkok Bank about 3.5%. I suppose those aren't bad returns vs bank rates on other currencies, but it strikes that there's a better than fair chance that the AUD exchange rate will move either up or down by more than 4% during the term of those CD's. For someone whose "home" currency is not AUD, deposit accounts like those strike me as being only somewhat less risky than buying dividend paying stocks.

Edited February 25, 2012 by OriginalPoster

[Wallaby]

Hi Naam

I'm in oz. If I wanted to invest say $20k in US$ (as I don't think the oz dollar can sustain a high rate against the us$) do you suggest it best to just buy the US$ on Forex? Or should I just buy the US$ through a bank?

I was thinking it may be possible to use the Forex trading to just buy US$ whilst the oz dollar is high then sell them when the ass falls out of it. Though I've never traded on Forex and have no idea if that is the best way to do it.

Much obliged.

if you are with an average bank you can buy, hold and sell USD any time you please and that IS trading Forex (foreign exchange). i'm not sure what you mean by trading "on Forex".

any additional questions assuming my answer is not clear, please don't hesitate to ask.

Thanks Naam, with Forex I mean doing it myself by downloading the site and trading myself, instead of going to a bank and having them do it for me.

Is it easy enough to login to the Forex site, buy a heap of US$ and hold on to them for a while until the Aus$ drops. Or would that just be wasting my time and easier to just go to the bank and buy them there.

I just don't know the pitfalls etc of trading online with Forex myself.

"the forex site" does not exist Wallaby. there are a dozen or more around which let you trade most foreign currencies. but these institutions want active traders to generate revenue with (admittedly) very low fees and are not interested in "buy, hold and trade once in a blue moon" clients. should you have any plans to trade actively i can (based on your background) only advise you "don't even think about it!"

no offence meant!

Absolutely no offence taken. I asked for advice and received it. I would rather be told the truth bluntly than put my hard earned in jeopardy through a lack of knowledge. We are talking about my savings so I much appreciate the honesty.

Cheers.

PS: So basically you think I should just go into my bank and open an account in US dollars? Or forget the whole idea and go blast it all on young nymphs and booze.

Edited February 26, 2012 by Wallaby