November 17, 2018

The federal government is facing growing calls to scrap or overhaul controversial changes to capital gains tax (CGT) exemptions for Australian expats, but tax watchers say now is the time to plan ahead and avoid getting slugged. 

Set to  affect about 100,000 Australians living and working overseas, the changes would deny CGT exemptions for homes sold while the owner was outside Australia, a retrospective slug as far back as September 1985 for some owners.

The existing laws would apply for any property sold before June 30, 2019, provided it was owned before budget night on May 9, 2017.

Some experts have labelled the moves a new death tax for expats who die overseas and the beneficiaries of their will. 

HLB Mann Judd Sydney tax partner Peter Bembrick says Australians overseas should take careful steps to avoid bill shock from the ATO.

"It may sound like a dream come true — you've been offered a fantastic job and the opportunity to live in, say, London or New York or Singapore for a...

October 8, 2018

When You Don't Have a Pair of Magical Ruby Slippers Like Dorothy

Current US tax laws do not provide any definitive guidance on the US tax classification and treatment of hybrid foreign retirement plans such as an Australian Superannuation Fund (“ASF”). In June 2015, the IRS issued a series of Private Letter Rulings (“PLRs”) to individual taxpayers holding that beneficial interests in foreign superannuation funds would be classified as foreign trusts for US tax purposes. It is no surprise that the foreign superannuation funds at issue in the PLRs were ASFs. Because the PLRs gave very little factual information about the funds at issue, and the nature of the PLRs themselves as non-precedential, one should be wary relying on these PLRs to report any ASF as a foreign trust. As with everything else involving ASFs, the devil is in the details. And with the recently-rolled out IRS compliance campaign focusing on US persons with interests in a foreign trust, US expats in Australia can no longer...

October 5, 2018

Because of its progressive ideals, democratic society, and focus on aesthetics, Denmark is a country that many Australians want to relocate to.

However, as with any location, moving to this Scandinavian country is not as simple as buying a plane ticket. There is a lot of important information that you must first know in order to make settling down in this country an easy and hassle-free process.

If you are considering residing in Denmark as an Australian in the near future, here is a relocation guide to the crucial information that will help you arrive at a well-informed decision and make your move truly successful.

1. Legal requirements

Since in Australia you are outside the EU, it is traditionally more difficult to get a permanent residency visa. To enter Denmark, you must have a valid passport and acquire a visa for a long-term stay. You will only be issued a permanent residency card once you have lived in Denmark for at least eight years.

But today, the Danish government offers differen...

July 25, 2018

Given that self-managed superannuation funds (SMSFs) enjoy substantial tax concessions, it comes as no surprise that the Australian Taxation Office wants to ensure trustees play by the rules and don't take advantage of the system.

Hence the existence of independent SMSF auditors, whose role is to check compliance and maintain the integrity of the SMSF sector through yearly audits.

From July 1, 2019, this will change for eligible SMSFs as a result of the government's 2018 budget announcement that the compulsory audit cycle for SMSFs will be extended from one to three years. This "reward" will be available only to SMSFs which can demonstrate a clear audit report for three consecutive years and have lodged their annual returns in a timely manner.

The rationale is it will assist trustees by reducing red tape. Reality or wishful thinking?

The cost of annual audits depends on many factors such as the number of members, how active the fund has been in terms of its investments, the complexiti...

July 24, 2018

  • Expats say the average time to find work after returning to Australia was 10 weeks.

  • A third (33%) of returning expats surveyed said it was difficult to find a suitable role while one fifth (19%) said they accepted a lower level role.

  • Half (54%) of survey respondents said their main reason for working overseas was to experience another culture. This contrasts with only 21% who say they sought work overseas to specifically gain work experience.

A third of returning expats find it difficult to secure a suitable job in Australia, according to research commissioned by global jobs site Indeed.

The survey of 200 was conducted by MBA students from University of Technology Sydney supported by Advance the leading network of global Australians.

The average time to find work once deciding to return to Australia was 10.1 weeks. Of the respondents, 40% said it was easy finding a suitable role but 33% said it was difficult.

On returning, half (51%) said their f...

July 7, 2018

New research has revealed that more pension money is being sent across the ditch, from Australia to New Zealand, than to any other country around the world.

The study was carried out by foreign exchange provider WorldFirst and revealed that almost one fifth of all pension-type transfers that were made in Australia last year, made their way across the Tasman Sea.

WorldFirst analysed thousands of its customers pension transfers between 2016 and 2017 and found that 19 per cent chose to send their cash to our closest neighbouring nation in 2017, while 17 percent of customers chose to move their cash over to the UK to enjoy in retirement.

The figures could be down to Australia’s strong migrant ties with the UK and New Zealand as five per cent of Australia’s population are migrants born in the UK, and 2.5 per cent are New Zealanders. While one in five migrant arrivals to New Zealand, between 2016 and 2017, were from Australia.

WorldFirst Head of Foreign Exchange, Patrick Liddy, said: “New Zealan...

June 20, 2018

ING Australia, a division of the global financial giant, is slamming the door shut on expatriate Australians needing finance to buy property here, the second major international bank to cut credit to local borrowers in a week.

The Dutch bank will announce that from Monday none of the estimated 1 million Australians living overseas will be "considered eligible borrowers", despite strong demand from rich expatriates.

It follows a decision by the Australian division of Citibank, the global financial powerhouse, to hit the brakes on residential property lending amid growing fears about a housing slowdown and its impact on the broader economy.

ING, which does not lend to foreign property buyers, is believed to have quit the market because of the expense and complexity of verifying the source of borrowers' incomes.

The bank would not comment but confirmed it is happening.

ING loan applications received prior to Monday will still be assessed under the current guidelines.

The federal government...

June 13, 2018

Baby boomers in Australia, the UK, the US and other Western nations are in a pickle. They're often cash-poor and living in a country with a high standard of living and prices to match. For some, retiring overseas is an option, but it pays to do your homework.

Deep in the mountainous interior of northern Thailand, by an ancient temple with an enormous carved buddha, a group assembles just after dawn for an unusual ritual. This is the Chiang Mai Lawn Bowls Club, which convenes every Tuesday. The first world-class lawn bowls green in northern Thailand was installed in Chiang Mai in 2015 and is thriving, with British, Canadian and Australian bowlers especially prominent among the membership.

Retirement used to mean settling down, but for some it now means jetting off. Retirement is increasingly a stage of life when people undertake great and bold migrations – the kind that can see you bowling a few ends under a tropical sky.

Chiang Mai is only one of many destinations where migrant retirees c...

June 1, 2018

Cashed-up expatriates are making the most of the falling Australian dollar and weakening property prices to snap up trophy properties in prestige postcodes costing upwards of $5 million.

Buyer's agents advising overseas clients claim the dollar pushing below 75¢ to the US dollar is fuelling much interest among the Australian expat communities of Singapore and Hong Kong, where the dollar is pegged to the greenback.

Many are returning to Australia permanently, some are buying locally in anticipation of a future return and others are setting up a family home with the main breadwinner commuting back to their Asian workplace.

Britain's departure from the European Union is also prompting many Australians who work in London to reconsider their options, including buying local property as a future bolthole.

Emma Bloom, a director of Morrell and Koren, says many expats fear the Australian property market could become even more competitive and expensive because of record low interest rates...

May 29, 2018

For Americans living in Australia, the countdown has begun to take advantage of a US Internal Revenue Service program that offers partial amnesty for those who have neglected to file taxes stateside.

Last month, the IRS announced that it will begin to wind down the 2014 Offshore Voluntary Disclosure Program, which allows for US taxpayers with assets out of the country to avoid criminal prosecution for not reporting foreign accounts.

With the program concluding on September 28, affected individuals in Australia should examine their assets to ensure they are compliant with US tax requirements.

Tax attorney Shannon Retzke Smith, a partner at the international law firm Withers Bergman, spoke to Business Insider about the key takeaways for Americans living abroad when considering whether to take advantage of the program before it concludes.

Here’s what she has to say.

Which individuals in Australia are most at risk for having run afoul of US tax law?

“The individuals who are most risk are US...

May 26, 2018

Here’s something you might not expect to hear a financial planner say: maybe repaying your debt is the last thing you should do.

We should explain. Not all debt is equal. Financial planners divide debt into two broad types: deductible and non-deductible. As these names suggest, deductible debt lets you claim a tax deduction for the interest that you pay. Non-deductible debt does not. This means that you have to pay the interest on non-deductible debt after you’ve paid tax on your income. In pre-tax terms, this makes non-deductible debt much more expensive, which is the reason why non-deductible debt should be paid off as quickly as possible.

But once you have paid off your non-deductible debt, you should think twice about whether to repay deductible debt. There are a couple of reasons for this.

The first reason is that there is often a better use for your money. Obviously, this will depend on what interest rate you’re actually paying on your deductible debt. But if we assume tha...

Australian expatriates are lobbying Prime Minister Malcolm Turnbull to overturn proposed tax changes that will force them to pay hundreds of thousands of dollars in capital gains tax if they sell their family home while working overseas.

A powerful lobby of Australian business and education interests in Asia this week warned the move was already making it harder to recruit staff and would damage Australia's people-to-people engagement with Asia at a time when it was trying to build a closer relationship with the region.

The demise of the home ownership perk as part of wider measures to improve housing affordability announced in last year's budget means foreigners would not be entitled to a capital gains tax exemption on their main residence if they sold the property while living overseas. The changes, currently before the Senate, impact more than 100,000 Australians living and working offshore.

"I understand the government needs to look at ways to kerb foreign investment but to hurt Austr...

April 16, 2018

And Australians still like them

“THE prime reason for the decline in living standards for many Australian workers is our staggering population growth,” thunders Dick Smith, a campaigning millionaire, in an apocalyptic manifesto. He is right about the staggering growth. The number of children the average Australian woman has fell below two in the 1970s and has stayed there. Yet since then Australia’s population has grown by 70%, thanks almost entirely to immigration. Over 28% of today’s residents were born overseas—a higher share than in Canada or New Zealand, let alone Britain or America (see chart 1). The number of newcomers continues to grow. Net overseas migration (a measure of immigrants minus departing Aussies) has nearly doubled since 2000.

Mr Smith is also right about the decline in living standards, albeit only recently. Wage growth has been dragging along at its lowest rate in almost 20 years, and dipped below inflation earlier this year, meaning that the typical worker is losin...

April 8, 2018

With Easter out of the way, we enter the federal budget preview season. Between now and when Treasurer Scott Morrison stands up in Parliament House on the night of Tuesday, May 8, to deliver his speech, there will be abundant clues and hints dropped by the government about its plans.

While pre-budget speculation is a part-and-parcel parlour game of modern political life, I want to consider something we know far more about: the impact of the 2017 federal budget has had on the property market. Happily the news is good.

Typically, federal treasurers have little to say about property on budget night. Investors tend to pay more attention to their home state's counterpart, given stamp duty and land tax jurisdiction sits within the lower strata of government. But the 2017 federal budget was unusual because of the number of announcements that targeted residential property.

Most striking were initiatives aimed at foreign investors and the new properties that this cohort is allowed to purchase, muc...

April 7, 2018

Expatriate Americans with businesses in Australia are in for a nasty surprise as a result of the Trump tax plan, experts say. 

While much attention has been paid to the one-off "deemed repatriation tax" of 15.5 per cent for giants like Apple and Google, in fact any dual US citizen with retained earnings in a private business located outside America will be hit.

"If you own a private corporation, there's a one-time tax that you're going to be subject to and it's a killer," said Roy Berg, an American lawyer who works for Moodys Gartner Tax Law in Canada and is personally affected.

"It's at 15.5 per cent on cash assets and 8 per cent on non-cash assets.

"For example, a doctor with his own practice in Australia who has US dual citizenship or a green card and $2 million of accumulated wealth sitting in his corporation would have $300,000 of his hard-earned Australian dollars confiscated by the US government this year."

Salary and wage earners are not affected.

Any individual US citizen...

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