Tax on Savings HELP Please

[panman]

We are on the list to migrate as parents, but it is still some time off. Been looking at OZ High interest savings accounts 6.25%. So thinking I could stick some money in there for when we finally move. But how do I stand Tax wise? as I will not be an Australian citizan secondly do they have a simlar sysytem as UK with FSA ie if the bank goes bust your money is safe provided it's below the set limit (if they have one)

 

Cheers

Dave

[Guest Liam]

There is a 10% Non-Resident Witholding Tax normally applied to earnings of interest by non-residents. The Government have a $1m guarantee on any term deposits or savings accounts held with Australian banks. Both of these may apply to you depending on your particular circumstances and your investment structure.

[panman]

Thanks for that Liam

[Les Avalook]

We are on the list to migrate as parents, but it is still some time off. Been looking at OZ High interest savings accounts 6.25%. So thinking I could stick some money in there for when we finally move. But how do I stand Tax wise? as I will not be an Australian citizan secondly do they have a similar sysytem as UK with FSA ie if the bank goes bust your money is safe provided it's below the set limit (if they have one)

 

Cheers

Dave

 

The tricky part is gaining access to those juicy accounts.

 

We have not yet found a way to get to them. Banks that will open accounts for you in the UK do not seem to offer the best accounts to you until you move to Oz.

 

It may be we are looking in the wrong place so please tell if you find different.

 

We could send money to our son and let him put it in one of those accounts but then he will pay more than 10% tax.

 

Another thing, even though we should pay 10% tax while off shore it is not unknown for the banks to withhold over 40% tax until they have your status proved to them, but you do get the difference back.

[panman]

Thanks for the info if I do get somewhere I will let you know.

 

Dave

[Alan Collett]

As a UK resident and UK domiciled individual you would be taxed in the UK on your Aus source interest income, albeit with a tax credit available for the 10% tax withheld by the Aus bank.

 

Best regards.

[panman]

Alan,

Thanks for reply, however if the money earned in interest stays in OZ would I still be liable to pay tax in UK?

 

Dave

[Les Avalook]

Alan,

Thanks for reply, however if the money earned in interest stays in OZ would I still be liable to pay tax in UK?

 

Dave

 

You would have to declare it if you are still in the UK, but as Alan said you would be allowed a 10% reduction on what ever tax you would have to pay S.R. or H.R.

 

You would however be earning at least double current UK rates so not all bad news.

[panman]

You would have to declare it if you are still in the UK, but as Alan said you would be allowed a 10% reduction on what ever tax you would have to pay S.R. or H.R.

 

You would however be earning at least double current UK rates so not all bad news.

 

Cheers for that, nothing is ever straight forward, I have written to Citi Bank for info but yet to receive a reply, their interest rates in OZ are pretty good. Will let you know how it goes. Or have you already tried them?

[Les Avalook]

Cheers for that, nothing is ever straight forward, I have written to Citi Bank for info but yet to receive a reply, their interest rates in OZ are pretty good. Will let you know how it goes. Or have you already tried them?

 

Is this the bank you use?

 

TMF: Are Citibank UK the worst bank in the world? / Current & Savings Accounts

 

 

and

 

 

TMF: Yes, Citibank are STILL the worst bank ever / Current & Savings Accounts

 

:swoon:

[Guest cazbeckham]

Also if you are transferring money from UK to an Australian Savings account be aware of the crippling exchange rate.

We have our pension transferred monthly from the UK to our Australian bank and since Dec 09 we have lost about $800 a month because of the poor exchange rate to what we set up in Dec 08.

We set up monthly amount for a year in Dec 08 and in Dec 09 when we came to renew it we had lost $600 a month and since May this year we havce lost another $200 a month so not good at the moment and that is our living money.

[panman]

No I don't but thanks for the heads up, I will give them a wide berth, bearing in mind they have not responded to my letter yet that says a lot about them in my opinion.