Australian Expatriate Property Tips and Traps - Negative Gearing & Capital Gains Tax (CGT)

This article is an extract from:7 Critical Financial Strategies for Australian Senior Executives living in Asia (Feb 2018 edition) by Dale Hoy.

Did you know?

i) Negative GearingShould your tax deductions exceed your rental income and you make a tax loss in Australia, then you can carry forward indefinitely offsetting the loss against future rental income, capital gain on sale or salary income on your return to Australia.

If you become a non-resident for Australian tax purposes, you can still “negatively gear” your primary residence (or other residence).

ii) Capital Gains TaxFrom 9 May 2012, the 50% Capital Gains Tax” CGT “discoun...

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Are you an Australian Tax Resident? An examination for Australian Senior Executives living in Asia

This article is an extract from: 7 Critical Financial Strategies for Australian Senior Executives living in Asia (Feb 2018 edition) by Dale Hoy.

Did you know?

It is possible that you may be a tax resident of two countries simultaneously. This is particularly a problem if you live in Hong Kong due to the absence of any Double Tax Agreement (“DTA”) between the Australian Government and the Government of the Hong Kong Special Administrative Region. 

If you are a dual resident of a country with a DTA with Australia (such as Singapore, China, Indonesia, Japan, Korea, Malaysia, Philippines, Taipei, Thailand and Vietnam), the employment income articles of the DTA may exempt your foreign e...

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Aussie Super changes: the pot of gold at the end of a very short rainbow for foreigners

Of course if you are a foreigner there is no way in the world you would ever voluntarily join an Aussie superfund. Budget changes will wind back annual contributions to a paltry A$25K per year, cap contributions to a lifetime $500K of your own money, limit entry of capital to tax-free pensions to just $1.6M AND reduce from $300K to $250K the “higher income earners”  income threshold for the 30% tax rate on contributions.

So what’s the pot of gold for foreigners? Well there are NO caps under Aussie rules on contributions (by you or your employer) to a foreign super scheme and for the employer there is an exemption from Fringe Benefits Tax but it is also not tax-deductible (which means the effective tax rate is 30%).

So long as neither you nor your...

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A critical look at proposed Australian superannuation reforms

All that changed in 2007 with two events, the first being when former Treasurer the Honourable Peter Costello introduced the Simplified Superannuation rules (from his 10 May 2006 Federal Budget) with the cornerstone being the “tax-free retirement for individuals aged 60 and over” from 1 July 2007. The second event of course was the election of a Labour Federal Government later that same year.

Often called the “curse of a tax-free retirement” Mr Costello’s pleasant surprise soon came under attack by the Labour Government which commenced to wind back the “very generous tax deductions” for higher income earners under the voluntary contribution rules. Of course the GFC did not help anybody and by the end of two terms of Labour Government in 2013, the Budget Deficit had blown o...

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Ceasing to be an Australian resident; knowing in advance what’s important

Working in Australia is hard work and so is working offshore. And you may work harder offshore but in many locations particular Asia, you will pay a lot less tax than if you stay in Australia. You owe it to yourself to maximise the career and financial advantages of this opportunity and it starts with finding the right taxation and financial adviser to be your trusted adviser in all respects.

As an Australian resident, you are taxed on your worldwide income/capital gains. If you cease to be an Australian resident you are taxed on your Australian sourced income and CGT is limited to Australian property. In your offshore location, you may find you are taxed only on your employment income and often at much lower tax rates. Meaning you are free to structure your investments ...

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