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4MyEgo

Australian Principal Place of Residence is now going to be taxed if you live overseas

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Posted (edited)
2 hours ago, Small Joke said:

We can thank Skase, and a few Mediterranean types for stuffing up the age pension overseas.  The Europeans buggered off to the mother country after retiring, and started on the relatively generous pension rorts.  But the government,  in true sphincter fashion,  punished collectively. So now we all have to go hang out there for some ridiculously  long time to re-qualify for hard earned money they took from us to begin with.  It's reprehensible.

If you look at it another way, the government left the door wide open (loophole), just as is the case if your a foreign resident, the only thing you don't pay tax on, is money invested in the stock market, conditional of course, the shares have to be fully franked (tax paid), and there is also no capital gains tax payable on the sale of shares that have increased.

 

The can stick it to us by punishing us with a 2 year jail sentence because of their own doing and allowing the Europeans that you refer to, too go back to the mother country and claim generous pension rorts, you would do the same if the loophole was there and you were European, so don't stick it to them, at least they worked and paid taxes, and yes I am European.

 

Perhaps you should point your anger on others who don't work, get money as coming as immigrants and work for cash, and I can tell you now, they ain't European, more middle eastern, Australia has become a hand out country, those that work, work for those who come in with nothing on the hope that they can contribute by getting a job, best of luck on that one.

 

It is not feasible for most of us to return for the 2 years, just on my calculations, if I received the age pension at 67, it would take me 4 years (71) to recoup what it would cost me to live in Australia for the 2 years prior to receiving the age pension, so that I can have it made portable, and $40,000 a year is by no means a comfortable lifestyle in Australia to be living on for a family, i.e. rent, food, car, etc, etc, and they know that, hence the jail term.

 

Some would say, but you can go on Newstart for the 2 years, yes well, I have factored that amount into my equation, the Newstart allowance would be drink money...lol

 

Edited by 4MyEgo

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Posted (edited)
On 6/30/2018 at 10:41 AM, damian said:

I have a property back in Aus, rent it out and pay tax on that rent and file a tax return each year. I have lived OS for 25 years as a non resident for tax prurposes which means I get no free tax threshold. I have done jobs back in Aus and likewise declared the income. I have bank accounts and my super is still in Aus. ATO knows this and no issues so far. 

 

If I want to sell my property I can always transfer ownership to a family member and have them sell it or go and live in it for longer than 6 months and become a resident again then sell it. 

 

Are you sure about this? I am in a similar position and am seeking clarification on this point. 

 

I have submitted a tax return every year since I came here in 2009. I am still a resident for tax purposes

 

From the reading I have done so far on the Australian tax office website I will have lost my main residence exemption as I have not spent at least 183 days in Australia for more then nine years.

 

I have read somewhere which states if they believe we are are spending some time back in Australia they can still impose capital gains tax if they believe we have only come back to avoid the tax.

 

So would spending 6 months full time there or at least 183 days over a one year period satisfy their requirements?

 

I will do whatever I have to do to avoid this very unfair tax on my family home.

 

If anyone has more knowledge and links explaining this point further I would appreciate some help.

 

I really want to know all of my options re my family home so I can make an informed decision.

Edited by tlcwaterfall
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Posted (edited)
On 7/5/2018 at 2:59 PM, tlcwaterfall said:

Are you sure about this? I am in a similar position and am seeking clarification on this point. 

 

I have submitted a tax return every year since I came here in 2009. I am still a resident for tax purposes

 

From the reading I have done so far on the Australian tax office website I will have lost my main residence exemption as I have not spent at least 183 days in Australia for more then nine years.

 

I have read somewhere which states if they believe we are are spending some time back in Australia they can still impose capital gains tax if they believe we have only come back to avoid the tax.

 

So would spending 6 months full time there or at least 183 days over a one year period satisfy their requirements?

 

I will do whatever I have to do to avoid this very unfair tax on my family home.

 

If anyone has more knowledge and links explaining this point further I would appreciate some help.

 

I really want to know all of my options re my family home so I can make an informed decision.

There is a tonne of information out there, you just have to surf the net and you will find it, but more or less, to remain a resident, you have to be in the country for at least 183 days in any financial year.

 

It goes like this and is not cut and dry, but trust me when I say, if you spend more than 183 days in any financial year outside of Australia, you are deemed a Non Resident for tax purposes, now I know there will be people having a go to shoot me down, and they are welcome to it, the fact of the matter will lay with you to prove otherwise, i.e. you can keep doing your tax returns and stating that you are an Australian Resident for tax purposes and keep getting away with it, who knows, unless you get audited, you will get away with it, but what are the penalties for fraud, tax evasion ?

 

I have read the legislation, front, back, sideways, upside down and talk to various "logical" accountants, the ATO and with all of the evidence that I cam up with, said if I was out of the country for more than 183 days, I would be deemed a Non Resident, a link for your test, like I said, its not cut and dry, there are 3 ways to get tested, hence the confusion.

 

https://www.ato.gov.au/Individuals/International-tax-for-individuals/Work-out-your-tax-residency/Residency-tests/

 

Now the legislation states that an Abode can be a park where someone spends most of their time, regardless if you do not have a visa to live in another country, the fact that you are granted extensions, means you have a type of residency there, however if you do not spend most of your time in one country, you could probably have a leg to stand on.

 

You can sort of say that after the 183 days you were out of the country, your principal place of residence was subject to capital gain tax, CGT from the date you left, now look out come 1 July 2019, things are going to change for the worst.

 

If I am correct from 2009 you would be up for CGT till 8 May 2012 when they changed the rules to include foreign or non residents, same meaning, i.e. 2009 with a 50% CGT discount to 8 May 2012, so what you would need to do is face the music and find out for sure by talking to a qualified accountant, and if keeping your head in the sand like others suites you, buy all means do and I wish you the best of luck.

 

If you decide to take my advice, and talk to an accountant, costs nothing and will more or less tell you where you are at, and what risks if any you would be up against. I am sure they will advise you to get a retrospective property valuation carried out as at the date you left Australia, or first started receiving an income from it, that will want to be a HIGH valuation in 2009, the accountant should then tell you to get another one as at 8 May 2012, again it should be a HIGH one so as to minimize your future CGT, now you might say two high valuations will make you pay more in tax, yes theoretically, but from 2009 to 2012 you have a 50% discount on CGT, so take advantage of it.

 

If you like PM me and I might be able to offer you further advice, depending on what state your property is in, and please note, I am not a qualified accountant, but know enough to keep up with the times.

 

My friend just went back to Australia to sign a contract on his place, he has been here longer than you, and is over 65, and if he settles and puts up to $300,000 of the sale proceeds into a super fund before 1 July 2019 he won't pay any CGT on that $300,000, now that sounds a little bit of a fantasy to me, because it sounds like a downsizing rule which he may not be privy too, but if its all above board, good luck to him, if its not because he is not a resident then I wish him good luck again, anything to get away from being taxed over the hill for us, but I prefer to sleep at night, with no one being able to pull me up at immigration saying, hang on a second, we have to hold you here till the ATO come to see you, or my accounts in Australia being frozen which they can do.

 

If you always lived in your property and then rented it in 2009, you will be up for 9 years of CGT, 3 of those years will be at a 50% discount, so if your property was valued in 2009 for say 1 million dollars, and 1.4 million in 2012, you would have a CGT event of around $400,000 less 50% = $200,000 which would be added to any income you have in the year you sell it, less CPI etc etc.

 

There are a number of ways to reduce you CGT, one example would be to move back into it before 1 July 2019 and live in it for as long as you can before you sell it, which will in tun reduce your CGT, but you would also need a valuation as at the date you moved back into it, this time on the LOW side.

 

I could go on forever, but best PM me and see if I can steer you in the right direction.

 

Apologies in advance if I am the deliverer of any bad news in advance, but I don't make the rules, I just follow them and try to keep up to date with them, and if I can get you into making a plan to minimize any CGT, then its all good.

Edited by 4MyEgo
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On 7/2/2018 at 2:26 PM, StevieAus said:

In response to your first paragraph the answer is that self funded retirees ( I am one ) have been and continue to be screwed.

Your hear all this garbage about making provision for your retirement and when you do see what happens, see my comment in the post above, about the retrospective changes to superannuation that were introduced last year.

Australia used to be a country where incentive was rewarded not anymore, I paid personal, tax company tax and collected the GST for the government, all rewarded with nothing.

I read an article some time ago that stated that fifty percent of the population now receive some form of government payment.

Quite frankly I am glad that I decided to leave and I am in no hurry to return for any reason

I agree. you couldnt pay me to live in the nanny state anymore

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1 hour ago, davidst01 said:

I agree. you couldnt pay me to live in the nanny state anymore

Yes.

Instead the nanny state  wants  you to pay for other people to live there.

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On 7/11/2018 at 1:28 PM, zaZa9 said:

Yes.

Instead the nanny state  wants  you to pay for other people to live there.

  On 7/11/2018 at 12:01 PM, davidst01 said:

I agree. you couldnt pay me to live in the nanny state anymore

-----------------------------------------

I cannot agree more but I have to live here.  We are here waiting for the pension and portability (plan to live in both countries - have kids here), and it is just awful - the socialist nanny state has taken over completely. So many issues - but here is just one.  Illegal Immigrants (refugees) get immediate welfare support wheras migrants have to wait 2 years (soon to be 4). That is not a problem as such, but what it means is that refugees get money and little incentive to find employment.  That makes sense as they cannot be expected to find a job, but what does it cost the taxpaters??  A 2013 ABS report stated that 53% of all refugees into Australia in the previous 15 years, still had social welfare as their main source of income. That is costing taxpayers billions and it is making no impact at all on the total worldwide problem. And the reality is that most 'refugees' are just 'economic refugees' that want a better life/money.  Just look at Europe now - in Sweden (have a friend there) they reckon 94% of all refugees are on welfare and they cannot and will not get employment.  How much does this all cost??  In the US they pay $8.8billion each year for new refugees - in Aust and Europe they dont count the total costs - that would be racist or invasion of privacy etc etc.  But migrant advocates regularly publish the costs of illegal detentions and want open borders (and welfare support).  Where will all this end?

 

Socialisim does not work. It never has and never will.  Socialists refuse to teach people how to fish,- they want to feed them fish every day and see it as a 'human right'.  They always eventually run out of other people's money (Thatcher).  Australia is a socialist democracy - fact.  Compared to USA (or Thailand) both political parties (Labor and Liberals) are left of Lenin.  I hate the place - but there are still many good people here.  But eventually the system will break - of that I have little doubt - it is unsustainable.  Meanwhile, get whatever you can is my view.

 

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On 7/10/2018 at 8:58 PM, 4MyEgo said:

There is a tonne of information out there, you just have to surf the net and you will find it, but more or less, to remain a resident, you have to be in the country for at least 183 days in any financial year.

 

It goes like this and is not cut and dry, but trust me when I say, if you spend more than 183 days in any financial year outside of Australia, you are deemed a Non Resident for tax purposes, now I know there will be people having a go to shoot me down, and they are welcome to it, the fact of the matter will lay with you to prove otherwise, i.e. you can keep doing your tax returns and stating that you are an Australian Resident for tax purposes and keep getting away with it, who knows, unless you get audited, you will get away with it, but what are the penalties for fraud, tax evasion ?

 

I have read the legislation, front, back, sideways, upside down and talk to various "logical" accountants, the ATO and with all of the evidence that I cam up with, said if I was out of the country for more than 183 days, I would be deemed a Non Resident, a link for your test, like I said, its not cut and dry, there are 3 ways to get tested, hence the confusion.

 

https://www.ato.gov.au/Individuals/International-tax-for-individuals/Work-out-your-tax-residency/Residency-tests/

 

Now the legislation states that an Abode can be a park where someone spends most of their time, regardless if you do not have a visa to live in another country, the fact that you are granted extensions, means you have a type of residency there, however if you do not spend most of your time in one country, you could probably have a leg to stand on.

 

You can sort of say that after the 183 days you were out of the country, your principal place of residence was subject to capital gain tax, CGT from the date you left, now look out come 1 July 2019, things are going to change for the worst.

 

If I am correct from 2009 you would be up for CGT till 8 May 2012 when they changed the rules to include foreign or non residents, same meaning, i.e. 2009 with a 50% CGT discount to 8 May 2012, so what you would need to do is face the music and find out for sure by talking to a qualified accountant, and if keeping your head in the sand like others suites you, buy all means do and I wish you the best of luck.

 

If you decide to take my advice, and talk to an accountant, costs nothing and will more or less tell you where you are at, and what risks if any you would be up against. I am sure they will advise you to get a retrospective property valuation carried out as at the date you left Australia, or first started receiving an income from it, that will want to be a HIGH valuation in 2009, the accountant should then tell you to get another one as at 8 May 2012, again it should be a HIGH one so as to minimize your future CGT, now you might say two high valuations will make you pay more in tax, yes theoretically, but from 2009 to 2012 you have a 50% discount on CGT, so take advantage of it.

 

If you like PM me and I might be able to offer you further advice, depending on what state your property is in, and please note, I am not a qualified accountant, but know enough to keep up with the times.

 

My friend just went back to Australia to sign a contract on his place, he has been here longer than you, and is over 65, and if he settles and puts up to $300,000 of the sale proceeds into a super fund before 1 July 2019 he won't pay any CGT on that $300,000, now that sounds a little bit of a fantasy to me, because it sounds like a downsizing rule which he may not be privy too, but if its all above board, good luck to him, if its not because he is not a resident then I wish him good luck again, anything to get away from being taxed over the hill for us, but I prefer to sleep at night, with no one being able to pull me up at immigration saying, hang on a second, we have to hold you here till the ATO come to see you, or my accounts in Australia being frozen which they can do.

 

If you always lived in your property and then rented it in 2009, you will be up for 9 years of CGT, 3 of those years will be at a 50% discount, so if your property was valued in 2009 for say 1 million dollars, and 1.4 million in 2012, you would have a CGT event of around $400,000 less 50% = $200,000 which would be added to any income you have in the year you sell it, less CPI etc etc.

 

There are a number of ways to reduce you CGT, one example would be to move back into it before 1 July 2019 and live in it for as long as you can before you sell it, which will in tun reduce your CGT, but you would also need a valuation as at the date you moved back into it, this time on the LOW side.

 

I could go on forever, but best PM me and see if I can steer you in the right direction.

 

Apologies in advance if I am the deliverer of any bad news in advance, but I don't make the rules, I just follow them and try to keep up to date with them, and if I can get you into making a plan to minimize any CGT, then its all good.

Thank you for your very informative and detailed explanation. Much appreciated.

 

Will PM you soon.

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