flag of convenience Posted June 8, 2014 Share Posted June 8, 2014 Tax implications wouldn't rule my life if I had plenty of money. My position is that I think we have enough to be comfortable in retirement, but not if we're going to lose ONE THIRD of that nest egg through tax. I'm not sure how delaying for another two years would help - if I don't have enough information to decide now, what's going to make up my mind in two years? The sentence doesn't quite make sense so maybe something got lost in the editing? We love watching those programs about buying homes in Tuscany etc, but we know it wouldn't be for us. I would be miserable anywhere I couldn't go to my ballroom dancing, belly dancing, writers' group, concerts and shows. So a picturesque village in Albania would be my idea of hell! What I meant was up to a two year duration in UK with the option to return to Australia in the event that UK didn't live up to expectations. If that is where you decide to be move back and sell up for a permanent move. I can see Albania would be too alien, but Malta has a retired UK born population, where some of the desires would likely be met. If to avoid sun issues Tasmania would be the ideal Australian location or even NZ. Quote Link to comment Share on other sites More sharing options...
Thom Posted June 9, 2014 Share Posted June 9, 2014 (edited) Gbye Grey Sky, thanks mate. Edited June 9, 2014 by Thom Quote Link to comment Share on other sites More sharing options...
Marisawright Posted June 9, 2014 Author Share Posted June 9, 2014 What I meant was up to a two year duration in UK with the option to return to Australia in the event that UK didn't live up to expectations. If that is where you decide to be move back and sell up for a permanent move. The trouble with that is that, after two years in the UK, we'd already be considered non-resident in Australia. That means selling up would trigger 100% capital gains tax. One option would be to be nomads - it appears we can stay Australian residents for up to two years if we're "of no fixed abode". But of course, that has extra costs of its own, since we'd have to stay in holiday accommodation which is always much more expensive than a long-term lease. Quote Link to comment Share on other sites More sharing options...
Aunt Agatha Posted June 9, 2014 Share Posted June 9, 2014 You could get a fancy caravan and see the sights :wink: Quote Link to comment Share on other sites More sharing options...
Marisawright Posted June 9, 2014 Author Share Posted June 9, 2014 Your original point was that you thought the tax system was unfair for people who wanted to return to the UK to retire but I am sensing that what is really the problem is getting the tax system to work for you while you potentially ping pong. I just re-read my original post and I don't recall saying it was unfair. My main reason for posting was two-fold - one, to find out if there were any solutions and two, to highlight the potential issues for others contemplating the move. In the short time I've been here, I've seen several people posting about going back, who clearly haven't even thought about the tax implications. We're not planning to ping-pong. But having moved from Scotland to England to Africa and Australia, I'm very aware of how one's perceptions of a country can be nothing like the reality so it makes sense to be prepared. You are right, the problem is that we're not that well off, so perhaps we should just be wiping the option off the table. If it didn't work out and we did have to come back to Oz, we'd be tens of thousands of dollars out of pocket so unlike you, we wouldn't be coming back to the same situation that we left - we'd have to go back to work to recoup our losses. Whilst I take your point about the property I doubt whether many UK pensioners would invest much of their retirement nest egg in a residential property half way around he world I agree, but this is the "moving back to the UK" forum, so I'm not addressing them. Lots of Australians invest in Australian property while they're here, and they need to be aware that it will cost them if they hang on to it when they return to the UK. Quote Link to comment Share on other sites More sharing options...
flag of convenience Posted June 9, 2014 Share Posted June 9, 2014 The trouble with that is that, after two years in the UK, we'd already be considered non-resident in Australia. That means selling up would trigger 100% capital gains tax. One option would be to be nomads - it appears we can stay Australian residents for up to two years if we're "of no fixed abode". But of course, that has extra costs of its own, since we'd have to stay in holiday accommodation which is always much more expensive than a long-term lease. I said two years due to that ruling. Of course it could be eighteen months or a year. More to get a feel if the UK is right for you or not. Then return and shut down OZ investments and move permanently. There is clearly never going to be an ideal situation but shame not to be where you'd prefer to be only due to taxation purposes. I'd imagine you'd be more than comfortable in UK. But it is hard. We thought we'd live in part on rental income as well. I can even recall some decades back when bank interest wasn't taxed. We'll likely quit the country completely when the time comes for those very reasons and the distance involved. Just need to find the suitable country. Quote Link to comment Share on other sites More sharing options...
Gbye grey sky Posted June 10, 2014 Share Posted June 10, 2014 I just re-read my original post and I don't recall saying it was unfair. My main reason for posting was two-fold - one, to find out if there were any solutions and two, to highlight the potential issues for others contemplating the move. In the short time I've been here, I've seen several people posting about going back, who clearly haven't even thought about the tax implications. We're not planning to ping-pong. But having moved from Scotland to England to Africa and Australia, I'm very aware of how one's perceptions of a country can be nothing like the reality so it makes sense to be prepared. You are right, the problem is that we're not that well off, so perhaps we should just be wiping the option off the table. If it didn't work out and we did have to come back to Oz, we'd be tens of thousands of dollars out of pocket so unlike you, we wouldn't be coming back to the same situation that we left - we'd have to go back to work to recoup our losses. I agree, but this is the "moving back to the UK" forum, so I'm not addressing them. Lots of Australians invest in Australian property while they're here, and they need to be aware that it will cost them if they hang on to it when they return to the UK. It is certainly worthwhile to highlight the potential pitfalls in retaining Australian investments if planning to live overseas. The UK government will soon be introducing measures to make it disadvantageous tax wise to own UK property for non-residents. With overseas buyers and investors helping to fuel a potential housing bubble in both countries such measures are inevitable. I am sure that if we returned to the UK we would also be many tens of thousands of dollars worse off. I cannot see how it could be otherwise. I thought it was worth highlighting for those who may have Oz investments considering MBTTUK that, with planning, it is not all doom and gloom on the tax front. Relocating is a risk financially, and more so as we get older in many ways, and I respect your cautious approach. You probably need to be fairly certain that the next move, if you make it, is the right one. How you do that I don't know as even a try out will cost tens of thousands of dollars. I suppose, like an investment decision, you both have to work out your appetite for risk. Good luck with whichever you decide. Quote Link to comment Share on other sites More sharing options...
Marisawright Posted June 10, 2014 Author Share Posted June 10, 2014 We thought we'd live in part on rental income as well. I can even recall some decades back when bank interest wasn't taxed. We'll likely quit the country completely when the time comes for those very reasons and the distance involved. That's what makes it hard to compare costs! Unlike many, we're not moving back to be closer to family - though I have sisters there, we've never been a close-knit lot. In fact I probably correspond more with them now than I did when I lived there It has more to do with getting away from the sun, and also giving us more freedom to travel to interesting places at a lower cost - so although it's going to cost us to move, we'll make big savings on air fares for holidays. Quote Link to comment Share on other sites More sharing options...
Alan Collett Posted June 10, 2014 Share Posted June 10, 2014 The UK government will soon be introducing measures to make it disadvantageous tax wise to own UK property for non-residents. => It is by no means certain that this will apply to all non residents. The matter is open for consultation at the moment. Might it be that tax residents of countries with which the UK has a Tax Treaty won't be subject to CGT on UK based property? Remember that the main focus of this tax change is (so far as I understand it) intended to be money from Russia, China, etc. Best regards. Quote Link to comment Share on other sites More sharing options...
Lostlily Posted June 10, 2014 Share Posted June 10, 2014 One thing may be worth considering is Southern Ireland, if you don't need to be that close to family. Property is very cheap in lots of areas and the tax position would be different. I did look into this a couple of years ago and it sounded quite encouraging. Just another idea. Quote Link to comment Share on other sites More sharing options...
Echidna66 Posted June 10, 2014 Share Posted June 10, 2014 One thing may be worth considering is Southern Ireland, if you don't need to be that close to family. Property is very cheap in lots of areas and the tax position would be different. I did look into this a couple of years ago and it sounded quite encouraging. Just another idea. My wife and I are now in our late 40,s and looking at the Philippines as she is from there..I dont work in Australia, but work as a contractor world wide, and currently pay income tax in Oz with no super...Its a futile situation now as I can live in the Philippines with my wife and live tax free for life and fund my own retirement in the Philippines through tax free income... Quote Link to comment Share on other sites More sharing options...
Gbye grey sky Posted June 10, 2014 Share Posted June 10, 2014 The UK government will soon be introducing measures to make it disadvantageous tax wise to own UK property for non-residents. => It is by no means certain that this will apply to all non residents. The matter is open for consultation at the moment. Might it be that tax residents of countries with which the UK has a Tax Treaty won't be subject to CGT on UK based property? Remember that the main focus of this tax change is (so far as I understand it) intended to be money from Russia, China, etc. Best regards. Point taken but it is unlikely legislation could be framed that could target specific countries. In the same way that non-EU immigration policies in the UK have impacted on Australian spouses of UK citizens when they were not the target. Quote Link to comment Share on other sites More sharing options...
Marisawright Posted June 16, 2014 Author Share Posted June 16, 2014 I'm coming around to the idea of selling my property - as someone rightly pointed out, it's not as if I'm planning to keep it forever and hand it on to my heirs, so I'm going to have to pay the CGT one day! So, the next thing is - what's the situation with money in bank accounts? It says on the ATO website, that the banks withhold 10% tax from non-resident bank accounts - and if that's the only investment you have in Australia, you don't have to fill out an Aussie tax return. But then it says non-residents are taxed 32.5% on every dollar. Contradiction? Quote Link to comment Share on other sites More sharing options...
Alan Collett Posted June 16, 2014 Share Posted June 16, 2014 The liability to Aus tax is limited to the tax withheld at 10% - this being the rate of withholding tax agreed in the Treaty between the UK and Australia. Remember that the interest income is most probably also taxable in the UK (subject to your domicile, quantum of interest, etc) - if it is taxable you will need to enter into the Self Assessment system in the UK and complete a Foreign Income supplement. The 10% tax withheld by the Australian bank is creditable against the UK tax payable on the Aus source interest income. Best regards. Quote Link to comment Share on other sites More sharing options...
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