Lostlily Posted July 12, 2014 Author Share Posted July 12, 2014 (edited) Actually the funny thing is, you pay more tax, not less. I think most people imagine that if you're a "non-resident" of a country, then you don't have to pay tax. But the fact is if you're a non-resident, and you've got investments in that country, you're taxed at a much higher rate than residents are. I have just been doing a bit more research and I came across this, if it is any help to anyone who is UK expat and wishes to spend some time there....When%20you%20leave%20Australia%20%7C%20Australian%20Taxation%20Office.webarchive Although this does seem to be very contradictory to the advice on the Inland Revenue page, they just try to grab you by the coat tails as to where your father was born i.e. domicile. Although when I spoke to my UK accountant about this 3 month rule blah blah, he said they simply do not have the resources to follow this up and the only time it comes to their attention is if you purchase a property in your own name in the UK???? Would be interested in advice others have received. I hope this link works, if not please let me know. Edited July 12, 2014 by Lostlily Quote Link to comment Share on other sites More sharing options...
Lostlily Posted July 12, 2014 Author Share Posted July 12, 2014 We haven't done it yet, we've just been researching it. My problems sound so minor compared to yours! My oh had a serious skin cancer scare and is now paranoid about going out in the sun - we haven't gone for a daytime outing since last June, because he won't walk outdoors (or even drive long distances) between 10 am and 4 pm. I don't want to live the rest of my life like a vampire so we need to move somewhere with a lower UV index. We don't have kids and, now that my MIL has passed away, we've got nobody in Oz. I have sisters in the UK, I'm a citizen and my oh has enough money to get a spouse visa. The big snag, as you've found, is tax. Australian tax - We would pay 10% tax on bank deposits - but that could be solved by moving all our money over to the UK. We'd pay 25% tax on our investment property income - no way of avoiding that, unless we sell the property and pay CGT. Luckily we both have our super in industry super funds (if we had a SMSF that would be taxed at 46%). British tax - We're not collecting a pension from our super yet, but when we do, the UK will treat it as income so it will be subject to tax (which it wouldn't be in Australia). Same goes for the Australian government pension, when we ultimately qualify for that. The other snag is that we do expect, one day, to need to draw the Australian pension. We won't be able to do that unless we come back to Australia to claim it - then we'll have to stay for 12 months, otherwise they'll cancel it again. Obviously a one-year temporary relocation would be expensive and we might be in our seventies by then! At one stage we wondered if cheaper living costs in the UK might offset the loss of income - we live in Sydney, so if we went almost anywhere except London or Edinburgh, we'd save a lot of money. However that's only looking at the cost of housing, and it looks like other costs in the UK are as high or higher, so it probably wouldn't be enough. We're reluctantly coming to the conclusion that it's not practical. Hey Marissa, I have been doing a bit more research, see my last post Quote Link to comment Share on other sites More sharing options...
Lostlily Posted July 12, 2014 Author Share Posted July 12, 2014 Family ? well that is the reason we are not willing to just say - stuff it lets go home and leave it in the hands of the Almighty to look after us. We have a daughter and 2 grand kids who have been to hell and back in the family court, she is not even allowed to move suburbs, never mind interstate and O/S LOL well not even worth thinking about. The ex is spitful and vindictive and leaving her on her own is just not something we could do. The other kids are fine, good jobs, nice homes, I think they would be OK but we would still miss them.Have heard homes in France are quite reasonable - but its not England, Europe is great for a holiday but England well thats home isnt it. Oh My Goodness, I do remember your story from earlier posts. Completely agree with you about your poor daughter, that is a totally (but not uncommon) situation. How terribly sad My only thoughts about France were that perhaps as it is so near to England, one could enjoy a nice lifestyle there and believe me it is very cheap to live there too. Added to that, you could get back to the UK very quickly and hopefully your family would visit too. But NO it is not England! But it does sound as if you have a much better balanced view (emotionally) of letting your kids go than I do. I think I am too emotional and needy. Quote Link to comment Share on other sites More sharing options...
Lostlily Posted July 12, 2014 Author Share Posted July 12, 2014 (edited) This may work better? Accessibility Languages Legal Database Tax topics A-ZAbout ATO This doesn't make a lot of sense, will try again later In Individuals Advanced Search [*=center]Home [*=center]Individuals[*=center]Business[*=center]Non-profit[*=center]Super[*=center]Tax professionals Tax file numberActivate sub menu Income and deductionsActivate sub menu Lodge your tax returnActivate sub menu Make a paymentActivate sub menu SuperActivate sub menu Your situationActivate sub menu Tax topics A-ZActivate sub menu Activate print options Home Individuals> International tax for individuals> Going overseas [*]International tax for individuals Work out your tax residency Coming to Australia Going overseas When you leave Australia Working overseas [*] Investing in Australia [*] Investing overseas [*]In detail Applying for a TFN - required documentation Australian income of foreign residents Capital gains Foreign income of Australian residents International agreements Other languages Residency Super [*] Previous years When you leave Australia If you have been living in Australia, you intend leaving Australia soon, or you have recently left Australia, there are things you need to do to get your tax affairs in order.Will your tax residency change?If you remain an Australian resident, you must lodge an Australian tax return and declare your worldwide income - both assessable income and exempt foreign employment income - even if tax was taken out in the country where you earned the income. If your residency status changes there will be a number of changes in your tax situation.Lodging your tax return earlyIf you are leaving Australia permanently and will leave before the end of the income year (30 June), you may be able to lodge your tax return early.Lodging your tax return from outside AustraliaIf you will continue to be an Australian resident while travelling overseas, you should lodge your tax return during the normal lodgment period (1 July to 31 October). The easiest way to lodge from overseas is online using e-tax.Capital gains on your assetsIf you leave your home in Australia temporarily you may be able to continue to treat it as your main residence for up to six years for capital gains tax purposes. If you cease to be an Australian resident, you may become liable to pay capital gains tax on some of your assets.Private health insurance and the Medicare levy surchargeIf you cancel your private health insurance while travelling overseas, you may be liable for the Medicare levy surcharge if your income exceeds the relevant threshold.Higher education loansIf you have a higher education loan debt it will continue to be indexed each year. You can still make voluntary repayments from overseas.Departing Australia superannuation paymentTemporary residents who are leaving Australia permanently may be able to claim their super. New Zealand citizens and permanent residents of Australia are not eligible for this payment.End of attention Higher education loans Will your tax residency change? Capital gains on your assets Lodging your tax return early Private health insurance and the Medicare levy surcharge Lodging your tax return from outside Australia [*]Last modified: 24 Dec 2013QC 33234 Online services Log on as a: Individual Business BAS Agent Tax Agent Access Manager Super clearing house RegisterSystem maintenance and issuesAccess managerAbout online services Forms Permanent migrants or temporary visitors - online TFN application Certificate of payment PAYG foreign resident withholding variation 2014 TFN - application for individual living outside Australia Timor Sea Treaty - Joint Petroleum Development Area instructions 2013-14 Tax return for individuals 2013-14 More forms and instructionsArrow button Tax rates and codes Calculators and tools [*] Print publications [*]Getting it right Your rights Tax planning How we check compliance Correct a mistake or dispute a decision Tax evasion and crime Report tax evasion Consultation Law, rulings and policy This doesn't make a lot of sense does it! I will try again later...... Edited July 13, 2014 by Lostlily Quote Link to comment Share on other sites More sharing options...
Guest Posted July 12, 2014 Share Posted July 12, 2014 Australia will never be home you say. But you've made it your home for 15 years and it's your children's home too. If you go back to uk you may not settle there either. And as for big and give me a bogan over a chav any day. Went back to live in the UK and was very shocked how many rough people are about. To me Australia is an educated country you get your bogans everywhere. Aren't you grateful to Australia for giving you a nice standard of living ? Just because you've lived somewhere for a long time doesn't make it home. Twenty nine years my partner has been in Australia and it's not home to him never will be. He and i would go back tonight if our circumstances allowed it. Home is for some where your heart is. Quote Link to comment Share on other sites More sharing options...
Lostlily Posted July 12, 2014 Author Share Posted July 12, 2014 Just because you've lived somewhere for a long time doesn't make it home. Twenty nine years my partner has been in Australia and it's not home to him never will be. He and i would go back tonight if our circumstances allowed it. Home is for some where your heart is. Well Well, I do not consider that Australia has "given me a nice standard of living" I have been totally self sufficient, even taking over a business that employed about 10 Australians! That certainly did not improve my mental health! I was astounded at the lazy (laid back??) attitude of these people, I was always ready to "get up and go" for opportunities, but they were lazy, stubborn and racist towards me. Now let me explain, I am not a bossy type of boss and was more than generous to them, but they are a different species of people than I had been used to dealing with in England. Where we also had a business and 99% of our ex staff are still some of our best friends. They have all had it too bloody easy here and their attitudes stunk! We have never taken a singe cent from the Australian government, that is not our way (although I have no problem with the genuinely needy getting this) We have worked our butts off since we arrived. I can now see why the government are crying out for immigrants, as they have a totally different work ethic to most Australians. You would not believe how many I have met who are on compo, for pathetic reasons. They are a different species, I would like to change the label "laid back" to downright lazy! Obviously I am not tarring every Australian with the same brush, but I was working in a semi rural area, which did contain a lot of freaky people. They made my life such a misery, due mainly to their own feelings of inferiority as most of them had never clawed their way out of the little holes they were brought up in and considered anyone else as a personal threat. Quote Link to comment Share on other sites More sharing options...
Gbye grey sky Posted July 12, 2014 Share Posted July 12, 2014 You have raised a very interesting topic "retirement" Aus is expencive - very expencive. When you are young, and busy with work and the kids, there always seems plenty of things to do, but once the kids grow up life changes. We are very close to retirement, due to a difficult financial time over the last few years we will have enough to pay off the mortgage and that is about all. Unless you are into fishing, or some form of water sport there is very little to do in Aus once you get to retirment age. Petrol costs a fortune especially as you have to drive so far to visit family or even a large shopping center. No country walks or wandering around the small country village shops or going for sunday lunch at the local put. Something those planning the move to Aus should consider. I would go back tomorrow if it were possible but its not an well we just have to face the fact retirement is going to be financially difficult and pretty boring. Just to inject a little balance here I would say that retiring anywhere if you have little money is no picnic. Couples going out for a pub lunch with a couple of drinks is generally £30 to £35 all in. We only do that half dozen times per year and we are still working. Sure you can do walks but unless you do the same walks it will involve a drive. Running a car costs £0,000's even if it is sitting on your drive most of the time. Yes there are lovely National Trust houses (and membership is good value) and you may have a handful within a 30 minute drive or so but once you have seen those it is a full day out buying petrol, lunch etc. Many retirees in the UK spend much of their disposable income keeping warm. If you have not lived in UK for a long time you may be shocked at how much people spend on just keeping warm. Most people as they get older feel the cold more than the young and it can be cold enough to need heating at any time from mid September to mid June and our heating is on every day for at least 6 months of the year. I am sure that the UK can be a great place to retire in but you need some serious money behind you IMO. A winter getaway would be a must for me to break up the long winter and that is not as cheap as it once was. I can see that there are minuses in Oz too and I certainly have no intention of belittling those as they are real experiences for some but I sense that those who have not lived in Britain since they were young may not be able to imagine the reality of daily life here in retirement on a low or modest income. Quote Link to comment Share on other sites More sharing options...
Lostlily Posted July 12, 2014 Author Share Posted July 12, 2014 (edited) Just to inject a little balance here I would say that retiring anywhere if you have little money is no picnic. Couples going out for a pub lunch with a couple of drinks is generally £30 to £35 all in. We only do that half dozen times per year and we are still working. Sure you can do walks but unless you do the same walks it will involve a drive. Running a car costs £0,000's even if it is sitting on your drive most of the time. Yes there are lovely National Trust houses (and membership is good value) and you may have a handful within a 30 minute drive or so but once you have seen those it is a full day out buying petrol, lunch etc. Many retirees in the UK spend much of their disposable income keeping warm. If you have not lived in UK for a long time you may be shocked at how much people spend on just keeping warm. Most people as they get older feel the cold more than the young and it can be cold enough to need heating at any time from mid September to mid June and our heating is on every day for at least 6 months of the year. I am sure that the UK can be a great place to retire in but you need some serious money behind you IMO. A winter getaway would be a must for me to break up the long winter and that is not as cheap as it once was. I can see that there are minuses in Oz too and I certainly have no intention of belittling those as they are real experiences for some but I sense that those who have not lived in Britain since they were young may not be able to imagine the reality of daily life here in retirement on a low or modest income. Yes I agree, heating would be a major expense. I need to sit down and do some realistic budgeting and talk nicely to my husband as well Edited July 13, 2014 by Lostlily Quote Link to comment Share on other sites More sharing options...
Marisawright Posted July 13, 2014 Share Posted July 13, 2014 (edited) It has got so damn expensive here that we can't even afford to go out for a meal anymore. You know, there comes a point in life when you have to stop saving your money for your old age, because your old age has arrived and therefore it's time to start spending some of it. Otherwise you're going to die miserable, with a million dollars in the bank. How much are your investment properties worth? Have you ever sat down and worked out how much money you have in assets and bank accounts, and whether it's enough to see you out? Perhaps it's time to sell one of the properties, or remortgage it to give you some money to enjoy your life before it's gone. I know it's hard to change your attitude - I also grew up with that frugal attitude of saving, saving, saving, and am just about managing to get used to the idea that it's OK to spend some of it. I assume your daughter's Aussie husband wouldn't contemplate moving to the UK? Edited July 13, 2014 by Marisawright Quote Link to comment Share on other sites More sharing options...
Marisawright Posted July 13, 2014 Share Posted July 13, 2014 Hey Marissa,I have been doing a bit more research, see my last post I can't quite follow what the links mean. I've been doing my research too and have concluded it's not as bad as I thought. The only snag is my Australian property, so I'm going to sell that and wear the CGT. The Australian pension is still an issue but we're unlikely to be eligible to collect it (due to means-testing) till we're in our seventies, so we're going to worry about it then. Actually it may well work for you to spend six months in each country after all - because if you have a home in each country, you'll count as resident in both countries. I didn't realise that was possible, but it is. It means you'll have to submit a tax return in both countries, but that's a small inconvenience. The benefit is that you'll avoid all the nasty tax rates that Australia charges non-residents. Your Australian properties will be taxed exactly as they are now. You'll declare those properties on your UK tax return but you'll also show the tax you've paid to Australia so you're unlikely to be taxed twice. Quote Link to comment Share on other sites More sharing options...
Lostlily Posted July 13, 2014 Author Share Posted July 13, 2014 You know, there comes a point in life when you have to stop saving your money for your old age, because your old age has arrived and therefore it's time to start spending some of it. Otherwise you're going to die miserable, with a million dollars in the bank. How much are your investment properties worth? Have you ever sat down and worked out how much money you have in assets and bank accounts, and whether it's enough to see you out? Perhaps it's time to sell one of the properties, or remortgage it to give you some money to enjoy your life before it's gone. I know it's hard to change your attitude - I also grew up with that frugal attitude of saving, saving, saving, and am just about managing to get used to the idea that it's OK to spend some of it. I assume your daughter's Aussie husband wouldn't contemplate moving to the UK? No I don't think he would consider it in a million years lol. But you have made some good points and I did have a bit of a chat with hubby this morning, he would obviously prefer to stay here. But at least he did listen to what I was saying. I am so scared of making decisions. Particularly as the last one to move over here hasn't turned out too good. Quote Link to comment Share on other sites More sharing options...
Lostlily Posted July 13, 2014 Author Share Posted July 13, 2014 (edited) I can't quite follow what the links mean. I've been doing my research too and have concluded it's not as bad as I thought. The only snag is my Australian property, so I'm going to sell that and wear the CGT. The Australian pension is still an issue but we're unlikely to be eligible to collect it (due to means-testing) till we're in our seventies, so we're going to worry about it then. Actually it may well work for you to spend six months in each country after all - because if you have a home in each country, you'll count as resident in both countries. I didn't realise that was possible, but it is. It means you'll have to submit a tax return in both countries, but that's a small inconvenience. The benefit is that you'll avoid all the nasty tax rates that Australia charges non-residents. Your Australian properties will be taxed exactly as they are now. You'll declare those properties on your UK tax return but you'll also show the tax you've paid to Australia so you're unlikely to be taxed twice. How did you come by that information i.e. the 6 months thingy? All I keep coming up with is that if you spend 3 months pa over 4 consecutive years you are domiciled and resident in the UK. Therefore all your worldwide income is taxed there....Especially if you buy or lease a property there. I am getting very confused about all of this, would love some help if anyone knows more Hopefully this link will work better, it is very interesting http://calculators.ato.gov.au/scripts/axos/axos.asp?CONTEXT=&KBS=residency_leaving.XR4 Edited July 13, 2014 by Lostlily Quote Link to comment Share on other sites More sharing options...
Marisawright Posted July 13, 2014 Share Posted July 13, 2014 (edited) How did you come by that information i.e. the 6 months thingy? All I keep coming up with is that if you spend 3 months pa over 4 consecutive years you are domiciled and resident in the UK. Therefore all your worldwide income is taxed there....Especially if you buy or lease a property there. You are absolutely right, yes it is. But the point is, you can be domiciled in the UK, it doesn't mean you're NOT domiciled in Australia. You can be domiciled in two countries at the same time. Also, you can't get taxed twice. So if you're also resident in Australia - which you would be, if you have a house here and spend six months of each year in it - then you'll pay tax on your Australian investments in Australia exactly as you do now. Then when you fill in your British tax return, you list your Australian investments but you also list the tax you've already paid to Australia. So the UK won't tax you again because of the double taxation agreement. I suspect your tax advisers have worked out your tax liability based on you becoming non-resident in Australia. Non-residents get crucified for tax. If you keep a home and a car in Australia (the car is important for some reason!), and spend six months here every year, then it's unlikely you would lose your residency status. Edited July 13, 2014 by Marisawright Quote Link to comment Share on other sites More sharing options...
Lostlily Posted July 13, 2014 Author Share Posted July 13, 2014 (edited) You are absolutely right, yes it is. But the point is, you can be domiciled in the UK, it doesn't mean you're NOT domiciled in Australia. You can be domiciled in two countries at the same time. Also, you can't get taxed twice. So if you're also resident in Australia - which you would be, if you have a house here and spend six months of each year in it - then you'll pay tax on your Australian investments in Australia exactly as you do now. Then when you fill in your British tax return, you list your Australian investments but you also list the tax you've already paid to Australia. So the UK won't tax you again because of the double taxation agreement. I suspect your tax advisers have worked out your tax liability based on you becoming non-resident in Australia. Non-residents get crucified for tax. If you keep a home and a car in Australia (the car is important for some reason!), and spend six months here every year, then it's unlikely you would lose your residency status. Thank you Marissa, this is very helpful information which may help us with our dilemma But do you know if this rule would still apply if we bought a small property in England??? Edited July 13, 2014 by Lostlily Quote Link to comment Share on other sites More sharing options...
Marisawright Posted July 13, 2014 Share Posted July 13, 2014 Thank you Marissa, this is very helpful information which may help us with our dilemma But do you know if this rule would still apply if we bought a small property in England??? Absolutely - in fact that's what you'd have to do, to establish that you have a "domicile". That's the point I was missing - I was assuming that if the UK decided you were domiciled there, Australia would treat you as not domiciled, or vice versa. But as far as I can ascertain, that's not the case at all - it's perfectly possible for both countries to decide you are domiciled, if you have a "domicile" in both places. Quote Link to comment Share on other sites More sharing options...
Lostlily Posted July 14, 2014 Author Share Posted July 14, 2014 (edited) Absolutely - in fact that's what you'd have to do, to establish that you have a "domicile". That's the point I was missing - I was assuming that if the UK decided you were domiciled there, Australia would treat you as not domiciled, or vice versa. But as far as I can ascertain, that's not the case at all - it's perfectly possible for both countries to decide you are domiciled, if you have a "domicile" in both places. That is interesting, I didn't realise that. I have been thinking and thinking. My latest idea is to help my English daughter out with some money to move to a larger house, at the moment she is considering extending her mortgage to make a loft conversion and perhaps build a garden room for extra accommodation for when any of us come over. But I know she would prefer to move to a larger house, so why not give her part of her inheritance early? It would all be in their names of course and would solve a lot of problems as if we bought a property, apart from the expense it would be empty for 1/2 the year etc. We did try to do this a couple of years ago, but unfortunately we were led astray as the house had massive subsidence problems and it was very traumatic. But I think we are all over the shock of that now. This could be the answer for us and I need to get off my butt and find something positive to occupy my time while I am here too. Thanks for your help Marissa and good luck with your plans Edited July 14, 2014 by Lostlily Addition Quote Link to comment Share on other sites More sharing options...
Marisawright Posted July 14, 2014 Share Posted July 14, 2014 That is interesting, I didn't realise that. I have been thinking and thinking. My latest idea is to help my English daughter out with some money to move to a larger house, at the moment she is considering extending her mortgage to make a loft conversion and perhaps build a garden room for extra accommodation for when any of us come over. But I know she would prefer to move to a larger house, so why not give her part of her inheritance early?It would all be in their names of course and would solve a lot of problems as if we bought a property, apart from the expense it would be empty for 1/2 the year etc. This could be the answer for us and I need to get off my butt and find something positive to occupy my time while I am here too. Of course, I'd say see if you can get some advice from an expert. I've been doing a lot of research so I'm starting to feel fairly confident of what I've learned, but I'm still not a tax expert by any means! The test for being domiciled in Britain is that you must spend more than six months of the year there, so bear that in mind. Quote Link to comment Share on other sites More sharing options...
Lostlily Posted July 15, 2014 Author Share Posted July 15, 2014 (edited) Absolutely - in fact that's what you'd have to do, to establish that you have a "domicile". That's the point I was missing - I was assuming that if the UK decided you were domiciled there, Australia would treat you as not domiciled, or vice versa. But as far as I can ascertain, that's not the case at all - it's perfectly possible for both countries to decide you are domiciled, if you have a "domicile" in both places. Hi Marisa, Have just been googling and came up with this page from so called"Experts" who state you can only have one domicile at a time. The plot thickens.....http://www.ukexpat.net/tax-information-topics.php Edited July 15, 2014 by Lostlily Quote Link to comment Share on other sites More sharing options...
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