# International Dividend Investors Living Abroad



## Rc366 (30 June 2017)

Hi everyone

Are there any about that can offer guidance on nomadic banking solutions for international dividend investors?

I'll be living abroad next year, off dividends derived from international stocks, but remain an AU resident (at least for the first few years)

My plan thus far is to open an Interactive Brokers account and have dividends payed into a CitiBank mutli-currency account, which would hold onto dividend distributions until the exchange rate is favorable, at that time - convert and withdraw, hopefully into a high interest earning, low international fee, every day transaction account.

Citi-bank multi-currency account requires 10k minimum balance and costs $25 for every withdrawal
HSBC has no solution for travelers with no fixed address

I have a meeting setup with CitiBank so I'm hoping an integrated solution can be found that allows me to use one single banking institution

What are others using or would use in this situation?

Cheers


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## So_Cynical (30 June 2017)

Rc366 said:


> Hi everyone
> 
> Are there any about that can offer guidance on nomadic banking solutions for international dividend investors?
> 
> ...




Hey

Will you be a Aust tax resident? i will be living abroad full time soon so this subject interests me, to maintain an Aust bank account you need an Aust address technically.

Im going to use my Mums address for my IB, Bell and Aust Bank accounts, at least in the short term.


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## Rc366 (1 July 2017)

So_Cynical said:


> Hey
> 
> Will you be a Aust tax resident? i will be living abroad full time soon so this subject interests me, to maintain an Aust bank account you need an Aust address technically.
> Im going to use my Mums address for my IB, Bell and Aust Bank accounts, at least in the short t




Hey mate, technically yes you are correct. I will remain AU resident to take advantage of franking credits, I estimate approx half my portfolio will be AU shares. I plan on setting up the brokerage account and bank accts  this weekend so I suppose i will need to use my sisters address, that's a good point.

I have looked fully into an offshore zero tax (legal) setup. I've gone as far as getting several quotes from global asset management consultants, global accounting firms, etc. If i was a resident of any other country I would have executed that strategy as there is a tax saving from day one. Being and Aussie we are blessed with the imputation system, and considering my portfolio will produce only about 40k p/year in dividends I'm actually better off taking advantage of that system. 

After more research it appears CitiBank mutli currency account is a no go, they changed their minimum to 75k and charge $25 per withdrawal. HSBC don't offer a practical solution.

Online Exchange Brokers offer the best rates, transferwise gets a lot of attention but is ranks as the cheapest only when converting small amounts, which ironically is the most expensive way to exchange money, see here
https://www.monito.com/send-money/united-states/thailand/usd/thb/10000
currencies direct and moneycorp appear to be consistently cheaper in the 3k-10k range

Thus my plan so far is to pool dividends in IB account which appears to pay interest rate based off the BenchMark interest rates, see here
https://www.interactivebrokers.com/en/?f=interestJP&p=interestcfd
Then use the Rate Alert system through one or several of the online exchange brokers to setup sms/email alerts when my desired currency hits it's 3 monthly low, at this time I execute the exchange and transfer out into a Citibank Plus account.

Citibank Plus doesn't appear to pay any interest on foreign currency, unless you have 10k minimum, so I wouldn't pool funds in the savings account account, in fact i'll need to check if they automatically exchange inbound foreign currencies to the aussie dollar


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## willy1111 (1 July 2017)

Bucket load of info on the ATO website...just use google.

https://www.ato.gov.au/Individuals/International-tax-for-individuals/Work-out-your-tax-residency/

My understanding was that you need to be in Australia for 183 days of the year or your permanent home is in Australia. Read the ato website for clarification.


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## Rc366 (1 July 2017)

For the record I spoke with;
Currencies Direct - They charge $0 fees for transfers, call back from london immediately after leaving request, excellent customer service, offer market orders, sms alerts etc
Transferwise - Their new Borderless Accounts charge a small fee based off the currency you are transferring out
HiFX - Have a currency exchange spread normally between 1.2 -1.5% (too much)
MoneyCorp - tried calling but lines were closed in the middle of the day!?
WorldFirst - $10 fee for transferring under 10k, free for over 10k

All these brokers offer no monthly fees, so you can create an account and only use it if they can offer you the best rate at the time, this is what i will be doing
Currencies Direct appeared to beat everyone by along shot except Transfer wise which is cheaper for amounts under 1k


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## Rc366 (1 July 2017)

willy1111 said:


> Bucket load of info on the ATO website...just use google.
> 
> https://www.ato.gov.au/Individuals/International-tax-for-individuals/Work-out-your-tax-residency/
> 
> My understanding was that you need to be in Australia for 183 days of the year or your permanent home is in Australia. Read the ato website for clarification.




Hey thx, you will find the further you look into becoming a non-resident the harder it is. For example I believe I read somewhere that once you have passed their test you are only allow 30 or 60 days inside the country per year. If the ATO find a PO box or freakin myers gift card in your name they can and have been known to back tax you for the entire duration. 
I'm all for minimizing tax, any way i can, so long as the risk vs reward is appropriately proportioned. I have looked into withdrawing my super early and taking it with me and evading large sums of tax outright, as I plan on leaving AU for good. After speaking with solicitors it appears the ATO doesn't bother trying you under the civil code when you offend, meaning, their intentions are to put you straight into jail. Which is fine, they wont catch me, I have several passports, except they don't need to, with the new CRS/AEOI coming into play the accounts would be frozen
I'll pay my dues and keep my hard earned superannuation in the greedy hands of the aussie government until its taxed to death and there's nothing left. And I'll take my wealth, innovation and business overseas where I'm treated best /end rant


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## Rc366 (1 July 2017)

willy1111 said:


> Bucket load of info on the ATO website...just use google.




ha sorry you were replying to the other guy, yeh @So_Cynical hit me up with a pm or something if you want some info i've spend the last 6 months looking into an offshore setup, plenty of cheap solutions that still work, just be careful any specific strategies more than 2 years old you read about are pretty much past their expiry date


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## So_Cynical (1 July 2017)

Ok im leaving in Jan 2019 so will be a Aust tax resident for that tax/fin year (190 days), after that a non tax resident, would be clearly better to stay a tax resident but thats not possible if your not here for 6 months plus.


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## Rc366 (1 July 2017)

So_Cynical said:


> Ok im leaving in Jan 2019 so will be a Aust tax resident for that tax/fin year (190 days), after that a non tax resident, would be clearly better to stay a tax resident but thats not possible if your not here for 6 months plus.



You should speak to an accountant. My understanding is you will be required to pass a non-residency test before the ATO stop taxing your income. The test does not care whether your out of the country for the entire year. If you have not applied for and satisfied all the criteria of the test you will get taxed the resident rate on your income, even though your not physically here. If you fail to report your income you will pay the ATO penalty once they find it, plus the back tax.


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## Sir Burr (1 July 2017)

So_Cynical said:


> i will be living abroad full time soon so this subject interests me, to maintain an Aust bank account you need an Aust address technically.




The banks, all you have to do is notify them that you are going overseas and when you hit the 183 day mark in that financial year, provide them an overseas address and tell them to do the 10% withholding tax as you are a non resident, simple as that.

https://www.ato.gov.au/individuals/.../interest,-unfranked-dividends-and-royalties/


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## Sir Burr (1 July 2017)

Rc366 said:


> I will remain AU resident to take advantage of franking credits




Don't think you must be an Australian resident to receive franking credits. Even the link in previous post eludes to that 

No tax for a non-resident with fully franked dividends.


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## Sir Burr (1 July 2017)

Rc366 said:


> I read somewhere that once you have passed their test you are only allow 30 or 60 days inside the country per year.




Link please?


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## So_Cynical (1 July 2017)

Rc366 said:


> You should speak to an accountant. My understanding is you will be required to pass a non-residency test before the ATO stop taxing your income. The test does not care whether your out of the country for the entire year. If you have not applied for and satisfied all the criteria of the test you will get taxed the resident rate on your income, even though your not physically here. If you fail to report your income you will pay the ATO penalty once they find it, plus the back tax.




To be a tax resident here you have to spend more than 6 months per fin year here, i want to maintain my Aust tax residency but wont be here or maintain a residence so therefore will not quality to be a tax resident.

Take the ATO test.

https://www.ato.gov.au/Calculators-...RSLA&anchor=DORSLA/questions#DORSLA/questions

*Result*
You are not an Australian resident for taxation purposes following your departure from Australia


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## Sir Burr (2 July 2017)

So_Cynical said:


> You are not an Australian resident for taxation purposes following your departure from Australia




Cynical, yes I'll be in this situation in the future and been looking into it. I have found a fellow experienced in non-resident tax that I'll be in contact when the time comes but think it's a good to have an idea well in advance 

Generally some of the things I have learned (DYOR) is I'll have to wind up my SMSF and move it to a Super Fund unless I can get a trustee in Australia to take it on. I have to wind up my company as director must be a resident.

Also, lose Medicare card and if you want a pension later you'll have to return to Australia and reside for 2 years before you can move O/S again.

If you have a PPOR you can rent for up to 6 years without capital gains on selling but any rent is taxed at 32.5% ie: no $18,200 tax free.

Good news is capital gains on shares/fully franked dividends is zero. 10% on interest/dividends.



Rc366 said:


> Citi-bank multi-currency account requires 10k minimum balance and costs $25 for every withdrawal HSBC has no solution for travelers with no fixed address




I'm not sure about this multi-currency account but Citibank Plus account charges no fees at all for transactions made at International ATMs (Some bank operators may charge a fee at the ATM, this is not a Citibank charge) or in store purchases. Good for travelers or if you want to transfer $A to an overseas account too (no fee).

If there are Citibank ATMs in the country your at then no ATM fee.

https://www.citibank.com.au/aus/banking/everyday_banking/citibank_plus.htm


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## Rc366 (2 July 2017)

Sir Burr said:


> Don't think you must be an Australian resident to receive franking credits. Even the link in previous post eludes to that



Your correct, franking credits can be paid to non-residents, see here
https://www.ato.gov.au/Forms/You-and-your-shares-2013-14/?page=14
excerpt below
_
If you are a non-resident of Australia, the franked amount of dividends you are paid or credited are exempt from Australian income and withholding taxes. The unfranked amount will be subject to withholding tax. *However, you are not entitled to any franking tax offset for franked dividends. You cannot use any franking credit attached to franked dividends to reduce the amount of tax payable on other Australian income and you cannot get a refund of the franking credit*. You should not include the amount of any franked dividend or any franking credit on your Australian tax return._

I wonder whats the point of receiving a franked dividend, if all the above apply?

Tax residents are entitled to the tax free threshold, which combined with the full eligibility of the franking system makes for a low tax, high yield cash stream for low income earners. This is the advantage you need to understand if your intending to live off dividends. Once your income level begins reaching the higher tax tiers it will be more advantageous to setup shop elsewhere, Philippines SRRV is the one of the cheapest, easiest and most relaxed (in terms of the 183 day rule) I've found, but that's a conversation for another topic



Sir Burr said:


> Link please?



Can't find it, but i do remember reading it, it may pay to ask your guy.
_
In Australian cases, no specific time limit can be set to determine if your stay is long enough for you to be considered to have resided in Australia. The surrounding circumstances must be looked at in each case.
https://www.ato.gov.au/Individuals/...etail/Residency/Residency---the-resides-test/



So_Cynical said:



			To be a tax resident here you have to spend more than 6 months per fin year here, i want to maintain my Aust tax residency but wont be here or maintain a residence so therefore will not quality to be a tax resident.
		
Click to expand...


_Your not interpreting this correctly, if your a tax resident, if your a citizen here, you have already qualified, ATO wants to keep it this way. There not going to send you a letter one day and say 'Your no longer a resident due to being out of the country for 183 days' Doesn't work like that. You will need to show proof that you are a resident of another country, you will need to satisfy that countries obligations before they give you residency status, then after all that you will have one of the many things covered that will allow you to pass the ATO's non-residency tests



Sir Burr said:


> If there are Citibank ATMs in the country your at then no ATM fee



Thanks mate, yes CitiBank offer the best Aussie based overseas low fee banking solution. However they are a legacy bank which means they rip you off for everything they can. After speaking with online exchange brokers its apparent they may hit me with 'landing fees' and other various hidden fees to receive funds. Also considering they are Aussie based I'm assuming they will convert all foreign currency into AUD and then charge me 2.5% on top of the exchange rate to do it. So once I get the bottom of it I'll post here.

I was hoping there might be some other international dividend investors around that can push me int the right direction


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## So_Cynical (2 July 2017)

Sir Burr said:


> Good news is capital gains on shares/fully franked dividends is zero. 10% on interest/dividends.




Capital gains zero but leaving is a CGT event, good news is that this can simply be deferred, however when you do decide to pocket the gain there is no discount or tax free threshold.


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## Sir Burr (2 July 2017)

Rc366 said:


> I wonder whats the point of receiving a franked dividend, if all the above apply?




Had to read the bold a few times  I'm not an expert but talking about using franking credits against other income besides dividends and can't do this as a non-resident:
https://www.ato.gov.au/business/imp...tributions/refunding-excess-franking-credits/

By the way I made a mistake above "10% on interest/dividends". I understand it's 10% on interest and 32.5% on unfranked dividends.


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## Sir Burr (2 July 2017)

So_Cynical said:


> Capital gains zero but leaving is a CGT event, good news is that this can simply be deferred, however when you do decide to pocket the gain there is no discount or tax free threshold.




Maybe better to offload the lot as an individual before leaving. Especially if held over 12 months.


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## So_Cynical (2 July 2017)

Rc366 said:


> _
> In Australian cases, no specific time limit can be set to determine if your stay is long enough for you to be considered to have resided in Australia. The surrounding circumstances must be looked at in each case.
> https://www.ato.gov.au/Individuals/...etail/Residency/Residency---the-resides-test/
> 
> ...




I dont think its really open to interpretation, Tax residency and citizenship are 2 different things, basically you can only be a tax resident in one place, i know the ATO wont send me a 183 day letter or anything else, its self assessment.

The residency test asks are you maintaining a residence? - yes 
Are you spending the majority of your time living at that residence? - yes
Do you have other family members with you living at that address? - yes
Then clearly you are NOT a tax resident of Aust - yes.


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## So_Cynical (2 July 2017)

Sir Burr said:


> Maybe better to offload the lot as an individual before leaving. Especially if held over 12 months.




Yep - i have been doing an orderly sell down and switch to FF dividends over the last 14 months or so, this will continue for another 18 months.


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## Sir Burr (2 July 2017)

So_Cynical said:


> Yep - i have been doing an orderly sell down and switch to FF dividends over the last 14 months or so, this will continue for another 18 months.




Haha I've been doing the same switching to FF.

Here is another gotcha and I think if possible better leave 11 months into the tax year and claim all of the $18,200 threshold less one month:

https://www.ato.gov.au/Individuals/...tralia-with-the-intention-to-reside-overseas/


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## Rc366 (2 July 2017)

Sir Burr said:


> 10% on interest/dividends



Apologizes, what are you referring to here?
My understanding is that dividends have two tiers of tax, tier one, is commonly referred to as (company) withholding tax, and is set by the companies domicile location and its governing tax laws (ie; AU tax is a flat 30%) after this rate is applied you then may or may not be eligible for a reduced tax rate based on your residency status and/or the tax treaty in place (if you are an international investor)
The second tier is income tax

Tier one taxes can be viewed here
http://us.spindices.com/documents/additional-material/withholding-tax-index-values.pdf

AU tax treaties here
http://www.treasury.gov.au/Policy-Topics/Taxation/Tax-Treaties/HTML/Income-Tax-Treaties


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## Rc366 (2 July 2017)

So_Cynical said:


> its self assessment



Interesting, i researched this earlier in the year and came to the conclusion it was no easy task. I notice the 'Work out your residency test' linked above, has been updated only 2 weeks ago. It wasn't that simplified last time I looked.
Have you spoken to an accountant or the ATO about this? Its common knowledge that AU non-residency is no easy thing.


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## Rc366 (2 July 2017)

@Sir Burr 


Sir Burr said:


> Hmmmm UBank is off the list:
> 
> _Unfortunately it is not possible to either send or receive funds from overseas banks with a USaver. I apologise for any inconvenience._
> 
> ...



Going through the old IB discussions, can you shed any light on what banks you found allow you to receive international EFTs ?


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## Sir Burr (2 July 2017)

Rc366 said:


> Going through the old IB discussions, can you shed any light on what banks you found allow you to receive international EFTs ?




I have a few IB accounts and can't remember what that was about but maybe when margin was stopped for Aussies and I pulled out of an individual account. If that was it, I can't remember what I did but at the moment I have a Westpac business account for IB.


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## So_Cynical (2 July 2017)

Sir Burr said:


> Haha I've been doing the same switching to FF.






Sir Burr said:


> Here is another gotcha and I think if possible better leave 11 months into the tax year and claim all of the $18,200 threshold less one month:
> 
> https://www.ato.gov.au/Individuals/...tralia-with-the-intention-to-reside-overseas/




I plan to leave in late Jan 2019 ~ so 7 months into the fin year, i know technically its the date you leave but my plan is to simply say that i was testing the waters for that first 5 months and only made a decision on July 1st 

(If you are leaving Australia with the intention to reside overseas) im leaving to try it out for 5 months then make a decision.


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## Sir Burr (4 July 2017)

Rc366 said:


> Apologizes, what are you referring to here?




I wasn't sure about the tax on non franked dividends. Thanks for the AU treaties link which I think clears that up.

Do you know if the registry withholds the tax? It looks like it can vary a lot between countries!


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## Sir Burr (4 July 2017)

Rc366 said:


> Online Exchange Brokers offer the best rates, transferwise gets a lot of attention but is ranks as the cheapest only when converting small amounts, which ironically is the most expensive way to exchange money, see here
> https://www.monito.com/send-money/united-states/thailand/usd/thb/10000




Hi Rc366, no sure if relevant to you but as an example USD/THB transferring as USD through to a local bank, the exchange rate is not the top but better than many at monito and Citibank charges no fee.

Compare the TT rate here: http://www.scb.co.th/scb_api/index.jsp

This is more for people who are not nomadic and can open a local bank.


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## Rc366 (4 July 2017)

Sir Burr said:


> Hi Rc366, no sure if relevant to you but as an example USD/THB transferring as USD through to a local bank, the exchange rate is not the top but better than many at monito and Citibank charges no fee.
> 
> Compare the TT rate here: http://www.scb.co.th/scb_api/index.jsp
> 
> This is more for people who are not nomadic and can open a local bank.




Hey thanks for the link. I checked with Citibank Brisbane, they will automatically convert all foreign income into the AUD and charge their own commission to do so. 

N26 Bank is actively setting up international nomads so long as you can source a shipping address inside the EEA. They have Transferwise integrated at the point of sale and offer a zero fee global Mastercard debit card. However they impose a foreign currency conversion into the EUR. You need their Black account to avoid the exchange fee on Non-SEPA transfers and it cost about $9 p/month. They appear to be the best option for a budget globetrotter.

If your in a country for 12 months or more then I think your right, setting up a local bank account isn't too hard, gives free ATM access and you can still use exchange brokers for better rates


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## Sir Burr (4 July 2017)

Rc366 said:


> Hey thanks for the link. I checked with Citibank Brisbane, they will automatically convert all foreign income into the AUD and charge their own commission to do so.




If your using IB, is there any reason you can't just convert the dividend returns to AUD through an IB forex trade. ie: select "convert to base currency" under Account in TWS. I'd think this would be far the cheapest way.

Then transfer the AUD to Citibank Plus and withdraw?


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## Rc366 (4 July 2017)

@Sir Burr 
Bare with me, as I'm just going through the process of setting up an IB account and I'm new to the stock markets, but wouldn't 'converting to base currency' just to withdraw and spend the money in a foreign currency be an unnecessary conversion?

If I receive a dividend in GBP , and wish to spend it in THB, why exchange it into AUD first?


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## Sir Burr (4 July 2017)

Rc366 said:


> @Sir Burr
> If I receive a dividend in GBP , and wish to spend it in THB, why exchange it into AUD first?




True!
I was thinking... Base Currencies are available in AUD, CAD, CHF, CNH, CZK, DKK, EUR, GBP, HKD, HUF, ILS, JPY, MXN, NOK, NZD, RUB, SEK, SGD or USD.

Although maybe you need an IB margin account to do it plus what happens when it's transferred into your bank account. I've never thought about this as I'm heading to one country and will open a bank account there.

That N26 bank looks interesting


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## Rc366 (2 August 2017)

@*So_Cynical*
@*Sir Burr*

I thought I would mention this as i got around to discussing the topic with my accountant, when departing AU it is a fairly easy straight forward process and in fact is self asses able to become a non-resident for tax purposes, you can lodge a final tax statement declaring you are going oversees. The (residency) tests are applied to you, however they occur on the ATO end. My accountant deals with overseas clients regularly and has done this before, he did mention that anyone the ATO has a vested interest in will not allow this to happen. Such as those with Real Estate ownership, companies, etc etc. But for those who wind up and sell out and have no AU sourced income etc, the process is actually very simple.

In regards to the original topic of nomadic banking solutions for internationally diversified dividend income; my solution thus far is to use N26 
one of the better reviews here - https://www.howitravel.co/n26-review/#
However if you are in a country for 3-6 months plus it is probably not that hard to open a local bank account. This avoids unnecessary currency conversions into the EUR (as is required with an N26 account)

As for currency conversions themselves, Interactive Brokers super low commissions and passing on the inter bank rate has proven cheaper than the cheapest online FOREX brokers. This may change when converting amounts under 15k


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## Sir Burr (2 August 2017)

Rc366 said:


> But for those who wind up and sell out and have no AU sourced income etc, the process is actually very simple.




Thanks for following up Rc366.

We will sell our house due to the tax and effort to keep.
Have only AU super, share capital gains + dividend income outside of super plus savings so wonder if it's not so simple 

Just read the thread again, about this:


Rc366 said:


> I wonder whats the point of receiving a franked dividend, if all the above apply?




Means there will be no withholding tax for FF shares as tax is already paid.
ie: you get the dividend tax free.

Thanks for the link to the N26 review. I don't think ATM withdrawals are always totally free though. As in their example I know of a 200 baht (A$7.50) bank fee for all foreign cards stuck into ATM's there but is not mentioned. Understand _they_ don't charge any fee which is good though


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## Rc366 (2 August 2017)

Sir Burr said:


> Means there will be no withholding tax for FF shares as tax is already paid.
> ie: you get the dividend tax free.



 I didn't realize this, so on 100% FF shares there is no withholding tax, Nice! 



Sir Burr said:


> I don't think ATM withdrawals are always totally free though.



Tell me about it, I started looking into these bank fees after looking in disbelief at my bank statement after getting back from overseers this year, about 10 atm visits ran me $250 in fees. 
Our American cousins get the best deal in this space, Charles Schwab and few others reimburse you overseas transaction fees, but they won't sign up AU residents, I tried


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## Sir Burr (24 November 2017)

So_Cynical said:


> Capital gains zero but leaving is a CGT event, good news is that this can simply be deferred, however when you do decide to pocket the gain there is no discount or tax free threshold.




Hi So_Cynical, was just looking through this again and you mentioned "CGT event, good news is that this can simply be deferred".

How does that work? ie: deferring the CGT. Been looking at the ATO but couldn't see anything about that.
Thanks.


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## So_Cynical (25 November 2017)

Sir Burr said:


> Thanks for following up Rc366.
> 
> We will sell our house due to the tax and effort to keep.
> Have only AU super, share capital gains + dividend income outside of super plus savings so wonder if it's not so simple
> ...




Im in the same boat - share capital gains + dividend income outside of super plus savings.

Just revising all this and re-read the thread again.



Rc366 said:


> I didn't realize this, so on 100% FF shares there is no withholding tax, Nice!




True and this is a great advantage - something im also looking into is foreign sourced income from listed trusts, as a non Aust resident no tax is payable on foreign sourced income even if its paid to you via trust distributions (dividends) by an Australian based company...anyway that's how it looks so far.


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## So_Cynical (25 November 2017)

Sir Burr said:


> Hi So_Cynical, was just looking through this again and you mentioned "CGT event, good news is that this can simply be deferred".
> 
> How does that work? ie: deferring the CGT. Been looking at the ATO but couldn't see anything about that.
> Thanks.




Yeah, so becoming a NTR (non tax resident) happens on a particular day, and on that day a CGT event happens, its essentially the same as selling all your shares is a CGT event except that in the case of becoming a NTR you haven't sold, but its a CGT event anyway.

So you either pay the tax payable (with 50% discount) or defer and pay later, or never, im not sure how this plays out over 20 + years etc or after death ? anyway you still need to keep records and calculate a figure thats due as from that point forward you are a NTR and will not pay any CGT, and loose the 50% discount on the deferred CGT.


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## SuperGlue (25 November 2017)

Queensland property owners residing overseas please be aware that there is land tax to be paid & there is an "absentee surcharge" on top of that starting this year.

According to tax agent not only foreigner property owners but many Queensland residents (residing overseas) are caught up in this.

Don't know whether it apply to other states and territory.

https://www.propertylawtoday.com.au/property-law/absentee-land-tax-changes-july-2017/


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## Sir Burr (25 November 2017)

SuperGlue said:


> many Queensland residents (residing overseas) are caught up in this.




Non stop "them" finding ways :|



So_Cynical said:


> due as from that point forward you are a NTR and will not pay any CGT, and loose the 50% discount on the deferred CGT.




Thanks, if you don't report the CGT when you become a NTR, is the CGT when you bought the shares right up until you sell as a NTR?

I wonder what happens if you deferred and came back as a resident of Australia 

At least it seems just reporting and don't actually sell them


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## So_Cynical (26 November 2017)

Sir Burr said:


> Thanks, if you don't report the CGT when you become a NTR, is the CGT when you bought the shares right up until you sell as a NTR?
> 
> I wonder what happens if you deferred and came back as a resident of Australia
> 
> At least it seems just reporting and don't actually sell them




I need to do more reading, there was something about a 4 year window then after that you are locked into the deferral regardless, and on return you still dont get any discounting, the discounting is lost forever, i do remember reading that also losses dont count and cant be carried forward once you become a NTR.

They really want you to settle up i think, it will be a 10 to 12 K whack for me..nice chunk of money.


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## Sir Burr (26 November 2017)

So_Cynical said:


> I need to do more reading, there was something about a 4 year window then after that you are locked into the deferral regardless



Thanks, yes I can't find the info on the ATO site.
Best to find it there but found other sites with info like this below. Case Study 1 is pretty clear:
http://www.alphacg.com.au/files/docs/case studies - cgt implications of a change in residency.pdf


So_Cynical said:


> They really want you to settle up i think



Yeah seems better to settle-up and move on, except if your shares drop (while in profit) following the changeover date then your out of pocket.


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## So_Cynical (26 November 2017)

Ok all very interesting.

https://www.ato.gov.au/general/capi...GT-discount-for-foreign-resident-individuals/

https://www.ato.gov.au/Forms/Guide-to-capital-gains-tax-2013-14/?page=15



> *Choosing to disregard capital gains and capital losses when you cease being an Australian resident*
> 
> If you are an individual, you can choose to disregard all capital gains and capital losses you made when you stopped being a resident.
> 
> ...


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## Sir Burr (27 November 2017)

Yes interesting! 

One other thing about this NTR caper, I only found while looking for a new broker recently and not all accept "us".

I saw when applying to one.

Two I have found so far (still looking) are Saxo and IB who are ok with non residents. I guess these being more international companies might be the difference but they both don't do Chess sponsorship either.


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## Rc366 (29 November 2017)

So_Cynical said:


> True and this is a great advantage - something im also looking into is foreign sourced income from listed trusts, as a non Aust resident no tax is payable on foreign sourced income even if its paid to you via trust distributions (dividends) by an Australian based company...anyway that's how it looks so far.



What specific investment trusts are you looking at? 
And yes, based on the reading I have done you can certainly own publicly traded Australian securities as a NTR and pay no AU tax, there are a number of rules surrounding this however, no majority voting rights, must be under 40% ownership of outstanding shares, can't actually remember the limitations  (there are a number of them for each entity type)  but they all appeared targeted towards large institutional investors sorts. 



Sir Burr said:


> I wonder what happens if you deferred and came back as a resident of Australia



I asked my accountant when I went  in last time about the deferral of the CGT event, I should have taken notes. From memory he mentioned the deferral forces you off their radar (and you can stay their permanently with no further tax) the ATO has no further interest in you, until you show up on Austrac, for whatever reason.
I'll ask about the implications of becoming a AU resident next time I see my accountant in March. Personally I would like to cut the  umbilical cord so the ATO doesn't confuse my assets with their assets anytime in the future.

Looks like my departure date could be pushed back until 2019, I'll update when I get some relevant info, thanks for the links, good reading there


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## Rc366 (29 November 2017)

Sir Burr said:


> Two I have found so far (still looking) are Saxo and IB who are ok with non residents




Can you link the IB page suggesting this? I've only spoken with the help line dude in HK, he says no residency, no account. Change of residency, close down au account and apply for new one in your new country... I don't believe it though


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## Sir Burr (29 November 2017)

Rc366 said:


> Can you link the IB page suggesting this? I've only spoken with the help line dude in HK, he says no residency, no account. Change of residency, close down au account and apply for new one in your new country... I don't believe it though




Sorry, should not have written that. Someone told me they are ok but haven't confirmed it myself. IB are slow to reply.

The ones I've contacted...

Saxo - yes
Selfwealth - no
Commsec - yes
IB - ?

I'm actually thinking of Commsec as I'd like Chess and what I'm doing is long term so the higher brokerage doesn't matter.


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## Sir Burr (29 November 2017)

Rc366 said:


> I'll update when I get some relevant info, thanks for the links, good reading there




Yes this is a good thread to refer back to and if I have something relevant will post here too


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## Rc366 (29 November 2017)

Sir Burr said:


> I'm actually thinking of Commsec as I'd like Chess and what I'm doing is long term so the higher brokerage doesn't matter.



Yes higher brokerage cost don't worry me either as I'm in for the long haul too, unnecessary monthly fees would be annoying (if commsec charges these)
CHESS would certainly be nice but the skeptic in me won't allow more than about 10% allocation to AU stocks anyway so that isn't enough to sway me.

When I compared brokers I assumed FOREX rates, brokerage, and ongoing fees would be the ones to take the lions share of costs, IB is in front on all three. Aside from that I looked at access to global markets and the range of base currencies accepted.
Since I have signed up I've noticed that the aussie government doesn't let me buy foreign currency through the IB platform, except USD, I can however hold foreign currency that gets deposited.

Another feature I have discovered is the recently updated web trader platform, aside from the slew of upgraded trading features, it now includes a portfolio analyst app which allows you to add your bank feed free of charge. This feature by itself is fairly useless as it only provides a basic overview of your asset classes. However combined with their email report feature I can request a daily report to include any accounting (which now includes all my NAB accounts, couldn't find my Superannuation fund) this report can be uploaded to an FTP server or emailed direct, allowing me to setup back end scripting on my personal  spreadsheet, giving me unbelievable power for creating up to date, fully automated and exact metrics for (almost) my entire net worth.

The traditional reporting creator on IB is apparently very good too, according to my accountant. 

Take my advice with a pinch of salt, I've only been at it for a few months. Let me know which broker you go with.


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## Sir Burr (30 November 2017)

Rc366 said:


> Can you link the IB page suggesting this? I've only spoken with the help line dude in HK, he says no residency, no account. Change of residency, close down au account and apply for new one in your new country... I don't believe it though




Hi Rc366,

Just received a reply from IB:

“If you were to move to from Australia in the future after opening an IB Australia account, you would need to close the Australian account and reopen under the international entity, IB LLC. Legal residence determines under which entity the account would fall under”.

I’ve continued to ask if it’s possible to go straight to opening an account in the “international entity” but bet you can’t. Will let you know.


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## Sir Burr (30 November 2017)

Sir Burr said:


> possible to go straight to opening an account in the “international entity”




"Unfortunately this is not possible. For Australian residents, any new application will automatically default to the IB AU entity and this cannot be changed, as ASIC has mandated all Australian residents must be held under the Australian entity."



Rc366 said:


> Change of residency, close down au account and apply for new one in your new country... I don't believe it though




Damn, he was right!


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## Rc366 (30 November 2017)

Thanks for the motivation, Just got off with live chat help. Moving from AU the process was described as:

1. You create an account in new entity
2. You create a ticket where you ask to transfer funds and positions from the original account to the new one
3. They send you several documents to fill in and sign. You will also need to verify this verbally

Process usually takes about 3 weeks, it is an internal transfer, there are no commissions payable, no securities need be sold and re purchased.


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## Sir Burr (30 November 2017)

Ha!
That was my next question, how hard to swap over 

Thanks.


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## Rc366 (30 November 2017)

No probs 

I asked about the 'international entity' too, the rep said it depends on location, most of EU falls under UK LLC, Singapore under US LLC, etc


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## Sir Burr (16 December 2017)

Rc366 said:


> No probs
> 
> I asked about the 'international entity' too, the rep said it depends on location, most of EU falls under UK LLC, Singapore under US LLC, etc




Just thinking if you move to one of the other 'international entity', will have to follow the tax rules of whatever country your resident for tax.

I'm sure you could get away with keeping the Aussie IB if you didn't tell them though


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## Rc366 (16 December 2017)

True, you can keep IB AU but then you may be best off using your Australian TFN which (legally) locks you into paying income tax on your dividends/interest 

If you choose to continue using your Australian TFN and its accompanying tax treaty privileges the ATO will continue to view you as an Australian Resident for tax purposes, thus requiring your self reporting of earnings. Evading Australian tax authorities for this reason is impractical, considering whatever financial jurisdiction you move too will comply with TIEA, and if found guilty of tax evasion you can be sure they will freeze your assets and take what you owe. Having said all that, there's probably heaps of people out there doing just this and getting away with it. The point is, once you acquire enough wealth its a completely fruitless exercise, as there are cheaper and more legal ways

Contrarily, I'm sure its possible to not provide your TFN to your AU broker, however you would then be stuck with no tax treaty rates that are afforded to Aussies. This is an option if your living off capital gains, however with dividends, the tax is withheld automatically at the treaty rate.

Therefor as a location independent business operator or (retired) dividend investor your are likely better off finding a jurisdiction that does not tax on word wide income, nation states adhere to one of four types of tax systems. See here - http://premieroffshore.com/which-countries-tax-worldwide-income/

I have decided to place my assets into an offshore trust, This costs a few grand a year but gives the immediate benefits of minimized WHT and no income tax and full asset protection, if setup properly.


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## So_Cynical (17 December 2017)

Philippines - Non-resident citizens *and aliens*, whether or not resident in the Philippines, are taxed only on income from sources within the Philippines.

http://taxsummaries.pwc.com/uk/taxs...ilippines-Individual-Taxes-on-personal-income


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## Rc366 (4 February 2018)

So_Cynical said:


> Philippines - Non-resident citizens *and aliens*, whether or not resident in the Philippines, are taxed only on income from sources within the Philippines.
> 
> http://taxsummaries.pwc.com/uk/taxs...ilippines-Individual-Taxes-on-personal-income



Yes so no income tax for SRRV holders earning divs from international sources

Thought I would update a few findings. I spoke with 2 separate Trust firms, specializing in foreign trusts. 1 from Cook Islands & NZ,  1 from the cook islands. I got quotes for both NZFT and Cook Island FT. Both came back reasonably priced,and about 4-5k USD setup cost and 4-5k USD yearly costs.

Too pricey for me this stage.  My next task will be looking into AU discretionary trust setup for asset protection.

I've done a fairly large turn around on my portfolios asset allocation and diversification. After attempting individual stock picking for 6 months,  I'm now moving into a Peter Thornhill style approach and allocating at least 85% into the old LIC's. Just sitting back and riding the worlds highest yielding advanced economy index, at least until such time as the ATO's income tax nullifies the franking credits. At this time I will go NTR and diversify further. With this new strategy in mind, I'm no longer sure Interactive Brokers is the best choice considering they don't offer CHESS sponsorship.
@Sir Burr did you end up going with Commsec?


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## Sir Burr (4 February 2018)

Rc366 said:


> @Sir Burr did you end up going with Commsec?




Hi Rc366,

I have a Commsec account but haven't used it for ages. Thinking about using it for what you mentioned - LIC's. I really like Peter Thornhill style too and would use Commsec.

Opened an individual Aussie IB account and will see what happens in the future. Might use a relos address. Also, agree about CHESS but the cheap IB brokerage and TWS for a portion of capital I'm sucked in.

Still a resident and not sure when will become a "non" but that's the plan


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