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jakc

Dual Citizen benefits?

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Like many on this forum - dual citizen of both the UK and Australia.

I was wondering if this brings any benefits for spreading your wealth between nations to legally get the most out of tax incentives?

Happy to hear any ideas/discussion.

I have very little money left in my UK account. I earn a salary in Australia. I have savings in Australia and also a split of ETFs bought on the ASX.

i wonder if its worth investing into an ETF via a UK broker or moving some AUD back into an ISA that would generate less than the £14k tax threshold?  I know the savings rates are better here so leaning more towards an ETF.  As i understand it id be saving on paying tax in Australia and UK in doing this, whilst still declaring it as foreign income with ATO?

Edited by jakc

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Citizenship has very little to do with tax, unfortunately. Although you're still a British citizen, it's likely you are now classed as a non-resident by the Inland Revenue - so for most things, you will be taxed as a foreigner.   

Assuming you are a non-resident, you can't open a new ISA or make new contributions to an existing one.  They are only for UK residents.  

I don't know what the tax would be if you invest in a ETF in the UK.  Again, assuming you're a non-resident for tax purposes, you will be taxed as a foreign investor, which may mean you are taxed at a higher rate than a UK investor.  

I don't see how how you save anything on tax by splitting your money between the UK and Australia.  You'll still have to declare all your income on both your Australian tax return and your British one.   If you've paid tax on income in one country, you don't have to pay it in the other.  But you're still paying tax somewhere.

I think you might be on a 457, and you may think because you don't have PR in Australia, you must still be classed as resident in the UK.  That's not necessarily the case.  It would be worth checking out the regulations.  

Edited by Marisawright

Scot by birth, emigrated 1985 | Aussie husband applied UK spouse visa Jan 2015, granted March 2015, moved to UK May 2015 | Returned to Oz June 2016

"The stranger who comes home does not make himself at home but makes home itself strange." -- Rainer Maria Rilke

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Thanks for detailed reply. I'm just heading out the door so will respond again later.

 Came on a 457 ten years back and a citizen now. The bit about Inland Revenue classifying me into same bracket as non resident makes sense.  An internet stranger on another forum made mention of how they have ETFs in the UK and due to the "Australian - UK taxation treaty they are not eligible for tax in Australia."

 

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1 hour ago, jakc said:

 An internet stranger on another forum made mention of how they have ETFs in the UK and due to the "Australian - UK taxation treaty they are not eligible for tax in Australia."

 

I can see why they'd say that, but it's not true.  What would happen is that you'd have to declare the income from the ETF on both your Australian and UK tax returns.  If the UK taxes it, then you still have to declare it on your Australian tax return, but you also declare the UK tax paid, so the ATO won't tax it again.    That's what the treaty is about - to make sure you pay tax on everything, but you pay in one country only, not both.

Edited by Marisawright

Scot by birth, emigrated 1985 | Aussie husband applied UK spouse visa Jan 2015, granted March 2015, moved to UK May 2015 | Returned to Oz June 2016

"The stranger who comes home does not make himself at home but makes home itself strange." -- Rainer Maria Rilke

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Fair enough/thanks for clearing up. 

So diverting from that specific question. Any benefits financially to being a dual citizen? Dual pensions? Access to investments from UK exchanges? Etc.

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1 hour ago, jakc said:

Fair enough/thanks for clearing up. 

So diverting from that specific question. Any benefits financially to being a dual citizen? Dual pensions? Access to investments from UK exchanges? Etc.

Not really, no. The only financial benefit is that you don't need to pay for RRV's every time you go on holiday. 

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Something I need to do more reading up on - how about dual pensions?  Super + National Insurance?

I am currently focusing on building up my Super to catch up with those that have been working in Australia their whole life.

I think I might be too late to start contributing to National Insurance again - time to start doing some googling...  

 

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2 hours ago, jakc said:

Something I need to do more reading up on - how about dual pensions?  Super + National Insurance 

 

Getting a British pension has nothing to do with being a citizen.  It depends on how many years you contributed to NI.  I believe there is a minimum number of years, but if you have that, you will be eligible for a British government pension when you retire.   It will only be a part pension (pro rata), but you can "buy" extra years by continuing to make NI contributions from Australia if you wish, it's not that expensive.

If you're living in Australia, you'll also be eligible for the Australian government pension, but (unlike the British one) it's means-tested - so even though you're eligible, you may not get it it you've got a decent super balance and some savings. 

In my case, for instance, I bought a few more years for my UK pension and I'm already collecting it.   I'll be eligible for the Australian pension soon, but I've got too much super and savings, so I won't get anything (until my super and savings run down, of course, at which time it will be a handy safety net).   

Edited by Marisawright
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Scot by birth, emigrated 1985 | Aussie husband applied UK spouse visa Jan 2015, granted March 2015, moved to UK May 2015 | Returned to Oz June 2016

"The stranger who comes home does not make himself at home but makes home itself strange." -- Rainer Maria Rilke

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Have a chat with @Alan Collett he is one of only a handful of accountants who deal with both UK and Australia. For pensions then @Andrew from Vista Financial Is the guru you want to speak with, he can also help get your first mortgage down Under etc.


If you are depressed you are living in the past. If you are anxious you are living in the future. If you are at peace you are living in the present.

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13 hours ago, jakc said:

Like many on this forum - dual citizen of both the UK and Australia.

I was wondering if this brings any benefits for spreading your wealth between nations to legally get the most out of tax incentives?

Happy to hear any ideas/discussion.

I have very little money left in my UK account. I earn a salary in Australia. I have savings in Australia and also a split of ETFs bought on the ASX.

i wonder if its worth investing into an ETF via a UK broker or moving some AUD back into an ISA that would generate less than the £14k tax threshold?  I know the savings rates are better here so leaning more towards an ETF.  As i understand it id be saving on paying tax in Australia and UK in doing this, whilst still declaring it as foreign income with ATO?

The foreign income you declare on your tax return gets taxed at the same rate as your Australian income. You can deduct the foreign tax you've paid (but if you're keeping under the UK threshold that will be nil) so I don't really see what the tax advantage would be. It doesn't make any difference whether you are a UK citizen or not.

5 hours ago, jakc said:

Something I need to do more reading up on - how about dual pensions?  Super + National Insurance?

I am currently focusing on building up my Super to catch up with those that have been working in Australia their whole life.

I think I might be too late to start contributing to National Insurance again - time to start doing some googling...  

 

The Australian Aged pension is means tested. The first thing they check is that you have claimed any UK state pension you are entitled to. This reduces the amount of Australian Aged pension you can get.


Chartered Accountant (England & Wales); Registered Tax Agent & Fellow of The Tax Institute (Australia)

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6 hours ago, Ken said:

The Australian Aged pension is means tested. The first thing they check is that you have claimed any UK state pension you are entitled to. This reduces the amount of Australian Aged pension you can get.

That's true.  Some people argue it's not worth paying NI contributions for that reason - why build up your British pension if it's only going to reduce your Australian one?  However, in my situation, I knew I could claim my UK pension from the moment I turned 64, whereas (thanks to my savings), it may be years before I qualify for the Australian one.  I could see that I'd quickly recoup the NI contributions I made - which just shows you that the British pension must be under-funded by NI, but that's another topic.


Scot by birth, emigrated 1985 | Aussie husband applied UK spouse visa Jan 2015, granted March 2015, moved to UK May 2015 | Returned to Oz June 2016

"The stranger who comes home does not make himself at home but makes home itself strange." -- Rainer Maria Rilke

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23 minutes ago, Marisawright said:

That's true.  Some people argue it's not worth paying NI contributions for that reason - why build up your British pension if it's only going to reduce your Australian one?  However, in my situation, I knew I could claim my UK pension from the moment I turned 64, whereas (thanks to my savings), it may be years before I qualify for the Australian one.  I could see that I'd quickly recoup the NI contributions I made - which just shows you that the British pension must be under-funded by NI, but that's another topic.

For anyone under 55 now, they will have to wait until they are at least 67 before claiming the state pension.


Timeline: 309/100 Sent 7/8/13, Money Taken 9/8/13, CO appointed 3/9/13. Med 3/12/13. Police check 4/12/13. VISA GRANTED 8/4/14, Subclass100. Recce August 2014. Arrived 30 July 2015.

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6 minutes ago, Gbye grey sky said:

For anyone under 55 now, they will have to wait until they are at least 67 before claiming the state pension.

But you can still access your Superannuation when you turn 60 if you have retired.


I want it all, and I want it now.

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35 minutes ago, Gbye grey sky said:

For anyone under 55 now, they will have to wait until they are at least 67 before claiming the state pension.

Yes that is a consideration.  I guess it depends how long you think you're going to live.


Scot by birth, emigrated 1985 | Aussie husband applied UK spouse visa Jan 2015, granted March 2015, moved to UK May 2015 | Returned to Oz June 2016

"The stranger who comes home does not make himself at home but makes home itself strange." -- Rainer Maria Rilke

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>Assuming you are a non-resident, you can't open a new ISA or make new contributions to an existing one. 

I've been trying to figure out how this affects a stocks & shares ISA with automatic reinvestment of dividends. Would this be classified as making contributions?

Edited by Frukoz

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4 hours ago, Frukoz said:

>Assuming you are a non-resident, you can't open a new ISA or make new contributions to an existing one. 

I've been trying to figure out how this affects a stocks & shares ISA with automatic reinvestment of dividends. Would this be classified as making contributions?

Since the dividends would normally be paid to you, and you instructed the ISA to reinvest those dividends, then yes, I'd say they class as contributions.


Scot by birth, emigrated 1985 | Aussie husband applied UK spouse visa Jan 2015, granted March 2015, moved to UK May 2015 | Returned to Oz June 2016

"The stranger who comes home does not make himself at home but makes home itself strange." -- Rainer Maria Rilke

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