# Beating the Taxman - strategies for traders to minimise tax



## insider

I'd like this thread to be about techniques and strategies that can be used to minimise the amount of tax paid, hence; so we can pocket more!!! Please contribute...


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## theasxgorilla

*Re: Beating the Taxman!!! Minimising taxes on shareholders*

Invest as a non-resident (pay no CGT) from a company in Jersey Is. and pay your 2k quid a year in tax and let the rest accumulate in your company.


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## insider

*Re: Beating the Taxman!!! Minimising taxes on shareholders*



			
				theasxgorilla said:
			
		

> Invest as a non-resident (pay no CGT) from a company in Jersey Is. and pay your 2k quid a year in tax and let the rest accumulate in your company.



 Sounds interesting but how would a resident of Australia who has never left the country do something equivalent or close to something like this?


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## reece55

*Re: Beating the Taxman!!! Minimising taxes on shareholders*

Well,

IMO, a trust fund is the most important thing to an investor.

If you are not using a trust fund, then generally your not being effective (unless you having money pouring out your ears and it doesn't matter). These things are the best tax value shifters in the Australian tax system. If you have kids, you can give them about $700 a year with no tax, + any other income can be given to your family (provided you are the specified individual) 2 generations up and down. Got a brother/sister that is a bum - all of a sudden they are your tax shelter. Just make sure you get them to sign over their credit beneficiary account balances to you though.......... Plus, you know the old $5000.00 franking credit rule - if you have 3 beneficiaries you will get 3 lots of the 5k franking credit rule. With this, you can dividend strip to your hearts content... In addition, if the trust is discretionary, you can also section of capital gains to one beneficiary (useful is someone has large unused capital losses).

As usual, DYOR and this is not my licenced opinion.

Cheers


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## reece55

*Re: Beating the Taxman!!! Minimising taxes on shareholders*

Insider
Speak to Paul Hogan - he will point you in the right direction.....

Cheers


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## jiggy

*Re: Beating the Taxman!!! Minimising taxes on shareholders*



			
				insider said:
			
		

> Sounds interesting but how would a resident of Australia who has never left the country do something equivalent or close to something like this?




A very good question! - Anyone know the answer?


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## jiggy

Maybe if you are a resident then set up a company in say asia somewhere or vanuatu????  But the problem would be if you are a director of the company maybe?


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## bowser

*Re: Beating the Taxman!!! Minimising taxes on shareholders*



			
				insider said:
			
		

> Sounds interesting but how would a resident of Australia who has never left the country do something equivalent or close to something like this?




www.google.com


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## theasxgorilla

http://www.offshoresimple.com/offshore_companies.htm#investment

There are also two quotes at the top of this page about tax.  I suggest anybody who gets that deep down feeling that this is cheating should read those quotes.


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## RichKid

insider said:
			
		

> I'd like this thread to be about techniques and strategies that can be used to minimise the amount of tax paid, hence; so we can pocket more!!! Please contribute...



Hi Insider
Check out pooled development funds, a thread on it here if you'd like to continue the discussion on that specific topic: https://www.aussiestockforums.com/forums/showthread.php?t=3627&highlight=pooled+development+fund


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## EEE

http://www.tridentpress.com.au/webcontent95.htm

I recently bought this book for my brother and have just started reading it myself. Packed full of info but a little hard for a simpleton like myself to get my head around.

Also a lot of other really interesting books on the site, check it out...


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## insider

theasxgorilla said:
			
		

> http://www.offshoresimple.com/offshore_companies.htm#investment
> 
> There are also two quotes at the top of this page about tax.  I suggest anybody who gets that deep down feeling that this is cheating should read those quotes.




Hey ASXGORILLA are you from Australia? And do you use this strategy?


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## insider

EEE said:
			
		

> http://www.tridentpress.com.au/webcontent95.htm
> 
> I recently bought this book for my brother and have just started reading it myself. Packed full of info but a little hard for a simpleton like myself to get my head around.
> 
> Also a lot of other really interesting books on the site, check it out...




Gonna have to grab a copy... I feel like a mexican druglord dealing with all this off shore business... very exciting...


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## theasxgorilla

insider said:
			
		

> Hey ASXGORILLA are you from Australia? And do you use this strategy?




From Australia, yes.  Did you read the last few sentences from the link I posted?


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## Duckman#72

theasxgorilla said:
			
		

> From Australia, yes.  Did you read the last few sentences from the link I posted?




There is nothing startling in that paragraph. You need to read it within the context of Australian tax legislation. 

Cheers

Duckman


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## Knobby22

*Re: Beating the Taxman!!! Minimising taxes on shareholders*



			
				reece55 said:
			
		

> Well,
> 
> IMO, a trust fund is the most important thing to an investor.
> 
> If you are not using a trust fund, then generally your not being effective (unless you having money pouring out your ears and it doesn't matter). These things are the best tax value shifters in the Australian tax system. If you have kids, you can give them about $700 a year with no tax, + any other income can be given to your family (provided you are the specified individual) 2 generations up and down. Got a brother/sister that is a bum - all of a sudden they are your tax shelter. Just make sure you get them to sign over their credit beneficiary account balances to you though.......... Plus, you know the old $5000.00 franking credit rule - if you have 3 beneficiaries you will get 3 lots of the 5k franking credit rule. With this, you can dividend strip to your hearts content... In addition, if the trust is discretionary, you can also section of capital gains to one beneficiary (useful is someone has large unused capital losses).
> 
> As usual, DYOR and this is not my licenced opinion.
> 
> Cheers




I agree with Reece. Trusts are the answer.
If you do the dodgy scheme mentioned and get caught you will get fines etc. andlose heaps. If a sceme is done purely to reduce tax then the taxation office can easily declare it illegal.

K22


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## rub92me

theasxgorilla said:
			
		

> From Australia, yes.  Did you read the last few sentences from the link I posted?



 It is okay to let the money accumulate in your offshore account. The tricky bit comes when you want to get it out I suppose. If you take it out while resident in Australia, then surely those proceeds would be taxable?


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## theasxgorilla

Oh the guilt!

KERRY PACKER: Of course I am minimising my tax. And if anybody in this country doesn't minimise their tax, they want their heads read, because as a government, I can tell you you're not spending it that well that we should be donating extra!


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## exgeo

Follow Warren Buffet's example and just don't sell your investments, or at least keep trading to an absolute minimum. Tax is not due until you realise the gain.

I've found the hard way (trial and error) that I basically make more money by trading less. I can't count the number of times I've "locked in" a 20% gain, only to watch it become a missed opportunity for a 100% gain a couple of years later. This strategy (being patient) has the extra benefit of reducing tax.


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## theasxgorilla

exgeo said:
			
		

> Follow Warren Buffet's example and just don't sell your investments, or at least keep trading to an absolute minimum. Tax is not due until you realise the gain.




Except if you live in a country with wealth tax that is levied annually on your net worth.


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## Duckman#72

theasxgorilla said:
			
		

> Except if you live in a country with wealth tax that is levied annually on your net worth.





??????????? Where is that?????????


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## theasxgorilla

Sweden.  Also Luxembourg, Greece, Spain and France.  From Wikipedia:

Some countries' governments require declaration of the tax payers balance sheet (assets and liabilities), and from that ask for a tax on net worth (assets minus liabilities), as a percentage of the net worth, or a percentage of the net worth exceeding a certain level. The tax is in place for both "natural" and in some cases legal "persons".

People can and do elect to reside or do business in particular sovereign jurisdictions for tax reasons ALL the time.  Why do so many Formula 1 drivers live in Monaco?


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## jiggy

Has anyone actaully been able to set an offshore account up or is this merely fantasy?


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## falcon55

i know someone who has...

its very illegal though...


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## theasxgorilla

jiggy said:
			
		

> Has anyone actaully been able to set an offshore account up or is this merely fantasy?




Duh!  It happens on a daily basis.  Inspite of Australia originally being a penal colony neither you nor your money are actually trapped here


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## carmo

How do you set up a trust fund?


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## GrahamMac

I'm a great believer in George Bernard Shaw's famous dictum "All the professions are a conspiracy against the common man!" The fewer professionals (accountants, financial and tax advisors, fund managers, overseas hidey-hole clever-dicks) that I allow to take a nibble as my money passes though their paws - the wealthier I've become. For taxation advice, I phone the ATO and get put through to the section (for free) that handles what I want to know. For a hard copy, I'm often directed to an obscure corner of the ATO website where I can download (again for free) the relevant ruling or interpretation. The only professionals I employ are a stock broker (to warn me when I'm about to make a huge blunder) and a real estate agent to pick good tenants and collect rents. Unlike fund mangers (who collect 2% of an investor's capital in fair weather and foul) real estate managers get paid only when I'm making money. I keep my own books, do my own tax returns and undertake most property repairs. Conclusions: The property and stock markets exist to transfer money from the impatient to the patient - which is why I'm not a day trader. If you're paying tax, it means you're making money. Poor people don't pay tax. Stop plotting and scheming and enjoy life while you can. Shrouds don't come with pockets!


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## waz

Quick question:

If you buy and sell shares very quickly, as in hold them for only a few hours resulting in no CHESS statment showing that you owned them.

Do you still have to declare it in your tax return?
Im thinking legally you never owned those shares, as settlement never took place.

Am I thinking on the right track??


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## theasxgorilla

falcon55 said:
			
		

> i know someone who has...
> 
> its very illegal though...




Can you ellaborate?  Is this instance of an offshore account illegal, or are you saying that all instances of offshore accounts are "very illegal"?


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## theasxgorilla

Great post GM.  As you describe, sometimes it's necessary to utilise professionals, for tax purposes or otherwise.  Unfortunately if we were all _common_ men I'm not sure where that might leave our societies.  I quite like the idea that my house was architecturally designed and _professionally_  engineered.  Helps me sleep at night


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## mmmmining

I am exploring the opportunity to be a full-time investor, my accountant tell me I cannot:

He told me that if my transaction is large, i.e. more than 30 sells in a year, and if I have no other job, I have to be considered as share trader, not a investor. Anyone knows? Many thanks.


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## noobs

mmmining,

Wouldn't you rather be classified as a share trader and pay 30% tax as opposed to a share investor who pays the full amount of tax for their bracket unless of course you use a trust fund or don't earn enough in the year to be taxed?


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## mmmmining

noobs said:
			
		

> mmmining,
> 
> Wouldn't you rather be classified as a share trader and pay 30% tax as opposed to a share investor who pays the full amount of tax for their bracket unless of course you use a trust fund or don't earn enough in the year to be taxed?



Thanks, noobs.

Do I need to incorporate a company to conduct share trading business to enjoy 30% tax? Thanks.


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## noobs

mmmining,

You don't have to have an ABN or a business entity as such just be able to satisfy the criteria of a share trader. Please see the link below ehich should provide some more clarification. The 30% for share trader is only from memory but I am pretty sure it is still the case.

http://www.ato.gov.au/businesses/content.aspdoc=/content/21749.htm&page=2&H2


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## mmmmining

noobs said:
			
		

> mmmining,
> 
> You don't have to have an ABN or a business entity as such just be able to satisfy the criteria of a share trader. Please see the link below ehich should provide some more clarification. The 30% for share trader is only from memory but I am pretty sure it is still the case.
> 
> http://www.ato.gov.au/businesses/content.aspdoc=/content/21749.htm&page=2&H2




Thank you, noobs for the info. I will try to show it to my accountant, or hire a different one.


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## mmmmining

I would like to transfer some of my shares to SMSF. I have been told by my broker that I can pick a date for the transfer to determine the share price. The date could be back in 3 months. It that true? 

If it is true, we may have a good strategy to minimize tax by contribution the quick gained stocks to super fund to pay 15% tax in super for realized gain, instead of paying marginal tax in person income, any thought? Thanks.


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## GOYCO

mmmmining

Would like to know the answer to that question as well. It would be very handy to be able to choose a date with in the last 3 months to transfer the shares. ( well actually sell to the SMSF)

cheers


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## reece55

Mmmmmmining.........

Only a bloody broker would tell you such rubbish!!!!!

I guess this just depends on how honest you are and how much tax risk you want to take on. I am an accountant with a CA firm - I wouldn't be recommending to you to transfer your shares with big gains and backdate it...... The tax act has an entire chapter dedicated to such a move, called anti avoidance. Essentially, what you are doing here is value shifting a known capital gain to your super fund for the sole purpose of obtaining a taxation benefit. Now, there would be a chance you wouldn't be caught - but if you did such a transfer, you would need to send the off market transfer to the registry or your sponsoring broker - if there was say 3 months between the date of the transfer and the share price had soared, not only would the person processing the form get a bit suss, but in the event of an audit, the ATO would pick it up.

So, my answer here is in accordance with the tax act, the answer is no..... The rest I leave up to you!!!!!!!!!!!

Cheers


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## mmmmining

reece55 said:
			
		

> Mmmmmmining.........
> 
> Only a bloody broker would tell you such rubbish!!!!!
> 
> Cheers



Thank very much. Life is tough. We have to be expert on everything even you are paying good money to the accountants, and brokers. They never give you the right answers.

So far the best adviser I have got (10 years ago) about converting my first home to investment property when we bought a new home. A banker advised us that one of us sold the 50% of the property to the other for $1. So we can refinance the property 100% as investment property. Looking back, I'm not sure it is tax avoidance or not. Anyway, it is 10 years ago. Maybe the law was different.


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## deftfear

I'm not sure where the 30% was obtained from, but unless you conduct your trading through a company, you would have to pay marginal rates on any trading income earnt. 

As far as I can see, the main advantage of being classed as a trader is that you can deduct losses from any other income. Do more research into having no job and having to be a trader, that doesnt't sound right to me, so maybe talk to another accountant and see what they say, or look at the tax office site more.


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## jj0007

The most effective way to beat the tax man trading is to trade on 12 month periods and get the 50%CGT   

Aside from that I believe a discretionary trust is a good vehicle.  Not only can you minimise your tax, your assets are also protected. i.e. no heather mills is going to get my hard earned  : 

Just remember though.  There is a difference between tax minimisation and tax avoidance.  One could land you in jail.


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## jemma

theasxgorilla said:
			
		

> Can you ellaborate?  Is this instance of an offshore account illegal, or are you saying that all instances of offshore accounts are "very illegal"?




ASX gorilla, establishing an offshore account through an offshore company is illegal if you are a resident of Aust as all gains are still captured under our tax laws even if they are putthrough an offshore tax haven with zero tax.

There are complex tax laws that capture such gains as a resident. You will go to jail if you have done this, I have looked into it.

Glen wheatley(farnham's manager) is facing jail terms by doing this, it was front page of fin review 2 weeks ago.


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## drmb

Set up Self Managed Super Fund and pay 15% tax. See http://www.esuperfund.com.au/ for one of the cheapest if not the cheapest ways of doing this, from post in Shares and Super. I had my SMSF set up by Dixons so I haven't used esuperfund so do your own research please.


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## insider

Well what I've gathered so far is if you hold a stock for more than 12 months you pay 50% of the Capital Gains Tax... If I traded under a company and got a capital gains tax rate of 30% plus held a stock for more than 12 months does that mean I just have to pay a CG tax rate of 15%?


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## theasxgorilla

Insider, nope...companies don't get the CGT discount.


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## theasxgorilla

jemma said:
			
		

> ASX gorilla, establishing an offshore account through an offshore company is illegal if you are a resident of Aust as all gains are still captured under our tax laws even if they are putthrough an offshore tax haven with zero tax.




I don't believe that this statement is true.  There is nothing illegal about offshore accounts or offshore companies.  You can be a resident in Australia AND be a director of an offshore company with offshore accounts and there is NOTHING illegal with this setup.


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## insider

drmb said:
			
		

> Set up Self Managed Super Fund and pay 15% tax. See http://www.esuperfund.com.au/ for one of the cheapest if not the cheapest ways of doing this, from post in Shares and Super. I had my SMSF set up by Dixons so I haven't used esuperfund so do your own research please.




Is there a way to setup a self managed super fund and then actually take the money out whenever I want so that I can take advantage of the 15% CGT?


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## money tree

best tax structures are in rank:

1. Super
2. Company in Trust
3. Trust
4. Company
5. Partnership
6. Couple
7. Individual

Super wipes the floor with the rest of them by a massive margin.


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## carmo

money tree said:
			
		

> best tax structures are in rank:
> 
> 1. Super
> 
> Super wipes the floor with the rest of them by a massive margin.




By Super do you mean setting up a SMSF?


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## theasxgorilla

money tree said:
			
		

> best tax structures are in rank:




money tree, does this ranked list infer something about an individual's tax bracket, their partner's tax bracket, and the size of their account?


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## dutchie

The main disadvantage of a super fund is that it cannot borrow money.

So whilst it may be the most tax effective structure it may not be the most profitable.

I would rather pay 30% tax on $2 than 15% tax on $1 - (broad generalisation not accounting for interest costs etc)

Cheers

Dutchie


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## Staybaker

dutchie said:
			
		

> The main disadvantage of a super fund is that it cannot borrow money.



Yes. The second disadvantage of a super fund is that you cannot get your money out until you retire (in answer to insider's question above). So if you are young, this could be a big problem.

Cheers, Staybaker.


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## money tree

actually, a Super fund can borrow. Instalmant warrants are an example. There are good reasons for not letting people use 50x leverage with their retirement   

as for not being able to spend the funds, thats common sense also. How will you get rich by spending?


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## theasxgorilla

money tree said:
			
		

> as for not being able to spend the funds, thats common sense also. How will you get rich by spending?




What if you "get rich" in the fund before you're 60?


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## insider

theasxgorilla said:
			
		

> What if you "get rich" in the fund before you're 60?



surely there are exceptions to this, like maybe you're migrating to another country, you're sick, or maybe there is some property you want buy as an 'investment'. In the end it is your money right?


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## theasxgorilla

insider said:
			
		

> surely there are exceptions to this, like maybe you're migrating to another country, you're sick, or maybe there is some property you want buy as an 'investment'. In the end it is your money right?




Correct...

    * You reach age 65;
    * Permanent or temporary incapacity established to the satisfaction of the Trustee;
    * Death;
    * Severe financial hardship established to the satisfaction of the Trustee based on specific guidelines;
    * APRA approves early release (compassionate grounds);
    * Permanent departure from Australia by eligible temporary residents;
    * Termination of gainful employment (where preserved benefits are less than $200;
    * You reach preservation age (see table below) and commence a non-commutable income stream. There is no requirement to cease a gainful employment'
    * You reach age 60 and cease a gainful employment;
    * Permanent retirement on or after you reach your _preservation age_


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## YELNATS

money tree said:
			
		

> actually, a Super fund can borrow. Instalmant warrants are an example.




That's right. Here's a quote from quantumwarrants www.quantumwarrants.com.au "Super funds are generally not able to borrow to invest in property, principally because a normal investment property loan can put all the fund’s assets at risk.

A fund can invest in property through a QuantumWarrant, because the warrant provides a ‘limited recourse’ loan to help finance the purchase of the property. This limits your risk to the property itself – your other assets are completely protected.

Many leveraged investments, like margin loans and normal investment property loans, expose all your assets to risk if there’s a default. With QuantumWarrants the risk is limited to the value of the property – no matter what happens".

And also ... "Approved by the Australian Taxation Office - The ATO has issued a product ruling on QuantumWarrants stating that an individual, company, trust or a superannuation fund can invest in them. Interest is tax deductible and there is no capital gains tax event when the loan is fully repaid and the property transfers to the investor. The full ATO Ruling is in the product disclosure statement or is available directly from Quantum."

I'm not sure how prevalant this investment vehicle is in Australia. Do anyone have any personal experience and can anyone advise? regards YN


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## jemma

theasxgorilla said:
			
		

> I don't believe that this statement is true.  There is nothing illegal about offshore accounts or offshore companies.  You can be a resident in Australia AND be a director of an offshore company with offshore accounts and there is NOTHING illegal with this setup.




It is not illegal but you still must declare the income from foreign sources.

Also if you make 300K in offshore trading accounts, how do you get the money back in the country without raising alarm bells from the ATO???

They get a report via the banks every transaction in and out above 10 grand through Austrac.


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## Duckman#72

carmo said:
			
		

> By Super do you mean setting up a SMSF?




Doesn't matter - whether you are in your own SMSF or industry fund - from a tax viewpoint they will be exactly the same. 

What will be different will be performance of your investments.


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## Duckman#72

theasxgorilla said:
			
		

> I don't believe that this statement is true.  There is nothing illegal about offshore accounts or offshore companies.  You can be a resident in Australia AND be a director of an offshore company with offshore accounts and there is NOTHING illegal with this setup.




Yes - you are correct - there is nothing illegal in that setup.  What is illegal, is for an Australian resident not declaring foreign income!! 

I really don't think that posts suggesting the opening of o'seas bank accounts and the creation of offshore companies is really something that the average ASF user should be concerning themselves with. 

Duckman


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## insider

Once a person reaches an eligible age to take the super annuation funds can he or she still invest through super annuation and still be charged 15% Tax? And can you fully remove your money from the fund at anytime when you are at the appropriate age?



			
				jemma said:
			
		

> It is not illegal but you still must declare the income from foreign sources.
> 
> Also if you make 300K in offshore trading accounts, how do you get the money back in the country without raising alarm bells from the ATO???
> 
> They get a report via the banks every transaction in and out above 10 grand through Austrac.




I'm using my imagination... Condoms!?... how about a taylored jacket using many hundred dollar bills as stuffing... "wow that jacket looks expensive, is it armani?"

Seriously now... Has anyone experimented with dual residency? Maybe there's a way... I'm Australian born, Naturalized Brazilian, And my dad's portuguese born so I can wattle over to the Portuguese embassy in Canberra and get myself a european passport...


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## jiggy

How does the Company in Trust work??


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## theasxgorilla

Hi Insider,

I don't think that anyone who is doing this is going to make statements about it on the forum.  If they did, I'd have doubts as to whether they're actually doing it or just talking as if they were.

I just wrote a whole bunch of stuff responding to various other posts but deleted it again.  Whats the point?  I'm not trying to be antagonistic, provokative maybe...  it's good for people to ask HOW, instead of assuming NO.  I _legitimately_ save myself thousands in tax every year this way.

Midnight Oil said it best, "It's better to die on your feet than to live on your knees".


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## insider

theasxgorilla said:
			
		

> Hi Insider,
> 
> I don't think that anyone who is doing this is going to make statements about it on the forum.  If they did, I'd have doubts as to whether they're actually doing it or just talking as if they were.
> 
> I just wrote a whole bunch of stuff responding to various other posts but deleted it again.  Whats the point?  I'm not trying to be antagonistic, provokative maybe...  it's good for people to ask HOW, instead of assuming NO.  I _legitimately_ save myself thousands in tax every year this way.
> 
> Midnight Oil said it best, "It's better to die on your feet than to live on your knees".




Nicely said... That is why I started the thread in the first place. I realised that there was two parts to the share market... First is making money and the second is keeping it... Whether people actually do these things or not and how they do them is completely up to them... It is always better to ask HOW than WHY. As in "how can I pay less tax?" rather than "why do I have to pay so much tax!?" (the answer to the second question is "because you didn't ask the first question")... I appreciate your help


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## insider

I was just thinking, if you had an elderly person around, say your dad, with a Self Managed Super annuation fund... Could you trade stocks through them, get taxed 15% and then just get them to hand you the money over to ya in a big birthday card...


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## money tree

"----------------------------------------INVESTMENT STRUCTURES----------------------------------------

Trusts

A trust is an obligation on a person to hold assets for the benefit of others who are known as beneficiaries.
It is the beneficiary that is taxed rather than the trustee. The beneficiary has to include their share of the trust’s net income in their personal tax return. Trust structures do not allow for any capital loss in the separate geared structure. Unsuccessful gearing can result in a total loss of the original investment without any tax deductions. 

It is common for trusts to make a company "presently entitled" to trust income without actually paying out the money. In this way, the trust can accrue income taxed at the 30 per cent corporate rate, which can be distributed via an asset revaluation to individuals who can avoid paying the 48.5 per cent marginal rate. 

Only 50% of the capital gains on an asset held by a trust for more than 12 months is taxable. A discretionary trust allows the trustee to distribute profits and franking credits freely. 

Trusts are also cheap to setup and are not regulated by ASIC, and running costs are minimal.

Advantages:

Taxation advantages – can split income between beneficiaries’ 
Asset protection
Limited liability

Disadvantages:

Possible implication for capital gains tax
Cannot distribute tax losses
Establishment and administration costs
All profits must be distributed, if not, 48.5% tax is payable


Company

A Company is a legal entity completely separate from its shareholders. The Australian Securities and Investments Commission regulate companies.
A Company pays income tax on its profits at the rate of 30%. A Company does not have to distribute profits unlike a trust. Where profits are withheld, this is a better option than an individual being taxed at 48.5%. The compound effect of investment capital makes a company structure attractive. A Company costs around $900 to set up and can be done in a matter of hours.


Advantages:

Tax rate 30% 
Franking credits
Can distribute income among shareholders
Does not have to distribute profits
Separate legal entity

Disadvantages:

No asset protection
Can be sued
No discretion over distribution of profits
CGT index exempt
Goodwill CGT exempt


Company in Trust

This involves both structures, utilising advantages from each. Trust profits are distributed to the company, which then distributes the profits to shareholders. It is a way of providing asset protection while also paying a lower tax rate.

Whichever option you choose, you can nominate profits among family members. E.g. if you have two university student children not earning income, you can nominate them to receive a share of the income. This way you pay $0 tax on the first $6,000 for each person, then 15% up to $21,600, then 30% up to $63,000."


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## theasxgorilla

money tree said:
			
		

> Where profits are withheld, this is a better option than an individual being taxed at 48.5%.




This could be out of date...the current top tax rate is 46.5% and doesn't kick in until $150,000 per year.


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## insider

I spoke to a fund manager today... and there is nothing illegal about setting up a company over seas with an offshore bank account and trading through the company... The only issue is bringing the money to Australian shores... They will ask questions... But you either bring the money in physically or discretely (as in small portions electronically) or you spend it all overseas... So basically where it gets iffy is where you try to bring it back...


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## insider

As young individuals CGT or trading as a company is is the best way to minimise tax... If you're of age then a self managed super fund is the way to go...


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## theasxgorilla

insider said:
			
		

> I spoke to a fund manager today... and there is nothing illegal about setting up a company over seas with an offshore bank account and trading through the company... The only issue is bringing the money to Australian shores... They will ask questions... But you either bring the money in physically or discretely (as in small portions electronically) or you spend it all overseas... So basically where it gets iffy is where you try to bring it back...




Being that you're a naturalised Brazilian and can get a Portugese passport and since Portugal is part of the EU, which as we've seen from photos on another thread is a wonderful place for a holiday...doesn't this become interesting to learn??  

Imagine you have an _investment_ company which is incorporated in Europe somewhere that you set up with a partner, and as directors the company is required to fly you both over to annual general meetings at locations decided by an "in-house commitee"...this year, Croatia, next year Copenhagen etc.  

What about research trips to places you might like to consider investing?

Illegal?  Hardly. Creative? Absolutely.


----------



## insider

theasxgorilla said:
			
		

> Being that you're a naturalised Brazilian and can get a Portugese passport and since Portugal is part of the EU, which as we've seen from photos on another thread is a wonderful place for a holiday...doesn't this become interesting to learn??
> 
> Imagine you have an _investment_ company which is incorporated in Europe somewhere that you set up with a partner, and as directors the company is required to fly you both over to annual general meetings at locations decided by an "in-house commitee"...this year, Croatia, next year Copenhagen etc.
> 
> What about research trips to places you might like to consider investing?
> 
> Illegal?  Hardly. Creative? Absolutely.




Definately mate... I think i'm gonna go on a "business trip"    soon...


----------



## carmo

insider said:
			
		

> As young individuals CGT or trading as a company is is the best way to minimise tax... If you're of age then a self managed super fund is the way to go...




Can you please give a brief summary of the tax advantages of a SMSF?
cheers
carmo


----------



## insider

drmb said:
			
		

> Set up Self Managed Super Fund and pay 15% tax. See http://www.esuperfund.com.au/ for one of the cheapest if not the cheapest ways of doing this, from post in Shares and Super. I had my SMSF set up by Dixons so I haven't used esuperfund so do your own research please.




This is all you need to know I think.


----------



## theasxgorilla

Thats an excellent link.  I just read this:

"The $200,000 SMSF Myth"

Can anybody confirm or deny if it is in fact a myth that you need $200k to make it cost-effective to operate and SMSF?


----------



## kbryant

i posted a question in this thread a while back https://www.aussiestockforums.com/forums/showthread.php?t=4787

does that qualify as beating the taxman?


----------



## insider

kbryant said:
			
		

> i posted a question in this thread a while back https://www.aussiestockforums.com/forums/showthread.php?t=4787
> 
> does that qualify as beating the taxman?



I guess you could, but I don't know much... I read somewhere, becuase there is no agreement, if Australia ever did get suspicious and want to investigate there was no obligation to provide banking information... You'll have do some research on that


----------



## insider

If I decided to take the "opening a company" route and get taxed at 30%, what could I claim as tax deductions, expenses and what not? For example can I lease a car? Can I buy computers in the name of the business? Can I claim the devaluing of the computers against tax? etc.


----------



## Duckman#72

theasxgorilla said:
			
		

> Thats an excellent link.  I just read this:
> 
> "The $200,000 SMSF Myth"
> 
> Can anybody confirm or deny if it is in fact a myth that you need $200k to make it cost-effective to operate and SMSF?



It is not a myth. Nor is it correct for everyone - but it is the generally accepted figure that is mentioned by all sorts of industry groups from the ATO, ASIC, Institute of Chartered Accountants, industry funds etc.

The key is the contributions. You can start off with much less IF you are in a position to make serious contributions quite quickly. The ATO is seriously concerned about Mr and Mrs Wage Earner (with mortgage up to the hilt) starting up their own SMSF with $40,000 start up. 

If you are only making contributions of $5,000-$6,000 a year, it is not just going to keep pace with the fees (if the fund account has a small balance).
I have said it before and I think it is worth repeating.......it costs just as much to run a fund that has a Term Deposit of $1Million as it does to run a fund with $1 dollar. It is all about economies of scale. 

The range between $150,000-$200,000 has traditionally been the point at which the fees of Industry Funds are more expensive than a SMSF. An industry fund may charge 2% of funds under management - super members in the past haven't seen this cream coming off the top.  

But it is not just about cost. It is also about being able to manage and administer your own superannuation fund. PLenty of people say "I can do better"........but they don't. It is no coincidence that SMSF are being voluntarily being wound up at record levels at present. 

As a side issue ........ASX Gorilla.....Glen Wheatley called and asked me to ask you if you would testify for him in his ATO tax evasion case. If you missed it, sneak a look at the front page of today's Australian. He will be very pleased to hear that it is everybodies right to minimise tax and that nothing is illegal.  

Duckman


----------



## insider

insider said:
			
		

> If I decided to take the "opening a company" route and get taxed at 30%, what could I claim as tax deductions, expenses and what not? For example can I lease a car? Can I buy computers in the name of the business? Can I claim the devaluing of the computers against tax? etc.




Could I also claim travel expenses?...


----------



## theasxgorilla

Duckman#72 said:
			
		

> As a side issue ........ASX Gorilla.....Glen Wheatley called and asked me to ask you if you would testify for him in his ATO tax evasion case. If you missed it, sneak a look at the front page of today's Australian. He will be very pleased to hear that it is everybodies right to minimise tax and that nothing is illegal.




It makes good news doesn't it?  John Farnham's manager gets prosecuted for tax evasion.  Care to elaborate some of the details of what was done?


----------



## theasxgorilla

He's pleading guilty.  Will be interesting to see what he gets.  I pulled this from the ABC website:

"From what we understand, the scheme is really pretty straightforward. It's about setting up offshore entities, usually in a tax haven, and then it's about the creation of an artificial invoice, a fake invoice if you like, for a deduction and so you pay Australian sourced income as a deduction which you claim as an expense in Australia, offshore, and then you seek to bring that money back via a series of countries or networks or bank accounts, back to yourself at some other point in time as a non-taxable amount."

This is tax avoidance, BIG TIME, hence the guilty plea no doubt.


----------



## insider

What country is the most recommended tax haven in the world?


----------



## insider

insider said:
			
		

> What country is the most recommended tax haven in the world?



I'll answer my own question and say Brazil


----------



## reece55

BVI, the Caymans and Bermuda are the ones I come across most frequently as an accountant......

Cheers


----------



## Mousie

insider said:
			
		

> Gonna have to grab a copy... I feel like a mexican druglord dealing with all this off shore business... very exciting...




Hey insider I'm looking at this website as well and am considering purchasing some of the books - have you grabbed a copy yet? How's the info in them? Definitely would want to hear from the others who've purchased from Trident Press - are these guys worth their value for money? Am just starting out investing and would like to know how to minimise tax and having appropriate structures to help. Thanks guys...


----------



## silence

Gibraltar is a good tax haven, as far as I know.


...


----------



## money tree

sounds like an aweful lot of hassle & risk to take to avoid tax.....especially when there are so many ways to pay bugger all tax here LEGALLY


----------



## theasxgorilla

money tree said:
			
		

> sounds like an aweful lot of hassle & risk to take to avoid tax.....especially when there are so many ways to pay bugger all tax here LEGALLY




It really depends on your situation.  What you say is correct, if you are in the latter years of your working life, with Superannuation benefit time just around the corner then there you have it...an effective "tax haven" in your own country.


----------



## insider

Mousie said:
			
		

> Hey insider I'm looking at this website as well and am considering purchasing some of the books - have you grabbed a copy yet? How's the info in them? Definitely would want to hear from the others who've purchased from Trident Press - are these guys worth their value for money? Am just starting out investing and would like to know how to minimise tax and having appropriate structures to help. Thanks guys...




Well I haven't grabbed one book yet... I've spoken to an accountant though... I gonna do some indepth research on this stuff for UNI


----------



## insider

Yeah when I go over to Brazil I'm gonna set up one of those off shore accounts and business things


----------



## insider

Hey what are your thoughts on spending the money overseas on exotic cars and then shipping them back to Australia? Does it raise flags?


----------



## theasxgorilla

insider said:
			
		

> Hey what are your thoughts on spending the money overseas on exotic cars and then shipping them back to Australia? Does it raise flags?




This is the hardest part of the whole affair.  You've managed to make money trading the Aussie markets from O/S with your offshore entity paying little to no tax on your gains, now how do you get it back into the country?  I had a friend who experienced this exact connundrum and he couldn't get it through.  The ATO is pretty cluey.  

I dare say that if you were audited you'd need to make sure the exotic cars were not in your driveway OR backyard.


----------



## insider

theasxgorilla said:
			
		

> This is the hardest part of the whole affair.  You've managed to make money trading the Aussie markets from O/S with your offshore entity paying little to no tax on your gains, now how do you get it back into the country?  I had a friend who experienced this exact connundrum and he couldn't get it through.  The ATO is pretty cluey.
> 
> I dare say that if you were audited you'd need to make sure the exotic cars were not in your driveway OR backyard.



 Couldn't you say that you went to the casino and won heaps in black jack or something? What about getting a trusted relative to send the cash over? What about physcially bringing the cash?

I'm gonna do this stuff oneday


----------



## money tree

collecting is deemed a tax-free "hobby".

therefore, you could sell your "collection" of classic cars with no CGT.

doesnt have to be cars. Some people make a good living "collecting" paintings.


----------



## Mousie

money tree said:
			
		

> collecting is deemed a tax-free "hobby".
> 
> therefore, you could sell your "collection" of classic cars with no CGT.
> 
> doesnt have to be cars. Some people make a good living "collecting" paintings.





LOL, if only we can "collect" shares as a hobby because we love the certificate it's on, or for whatever other reason...??


----------



## insider

If I sold my day to day 'used' car, what tax would I need to pay? Any?


----------



## Duckman#72

money tree said:


> collecting is deemed a tax-free "hobby".
> 
> therefore, you could sell your "collection" of classic cars with no CGT.
> 
> doesnt have to be cars. Some people make a good living "collecting" paintings.




As I've mentioned on this forum before - Money Tree tends to over simplify issues. 

It is not as simple as saying collecting things means "hobby".

Just be careful basing your ITR on that assumption.


----------



## hongwong

Lol theasxgorilla, i can see u still hate the TAX man with more passion .... I thought distances makes the heart grow fonder?

Example A) You are  farmer.
I believe there is farming conferencing in country X or Y.  You just have to prove it.  The airfare, meal and hotel for that conference is tax  detectable.

Hence find a share trading conference and go to it. …..
Just have to prove there was one there etc ..

CGT gain to reduce, there must be a GCT loss.

GCT is one of the worst things on a free market ….


----------



## startrader

My thoughts to those thinking of avoiding tax by putting their money offshore:

In my humble opinion it would not be worth it.  Just put your energy into making lots of money and using legitimate means to minimise tax.  No. 1 it's fun and no. 2 it will give you much greater peace of mind.  I have watched my ex slowly dig himself into a big hole by having investments o/s and not declaring them here so that now if he ever wanted to change this situation it is just too hard and unpleasant an issue for him to deal with.  He never took the time to check out our tax laws properly and ways in which he could have easily minimised his tax here and invested here and I know deep down the whole thing causes him a great deal of mental anguish and really I think messes with his mind.  Watching it all I also have no respect for him and think he is an idiot.  It probably doesn't seem like a big deal for you at the moment to go down that path, but it can end up being one.


----------



## nizar

insider said:


> Hey what are your thoughts on spending the money overseas on exotic cars and then shipping them back to Australia? Does it raise flags?




Its alot cheaper to buy nice cars overseas as well compared to in Aust.
I know you're referring to probably something Italian when you say exotic, but for example, BMN M3s, here they cost $140k. The Yanks pay $47k.

What a joke 

I dunno why we gotta pay so much more...... probably coz we buy less but still... thats a fair difference....


----------



## surfingman

theasxgorilla said:


> This is the hardest part of the whole affair.  You've managed to make money trading the Aussie markets from O/S with your offshore entity paying little to no tax on your gains, now how do you get it back into the country?  I had a friend who experienced this exact connundrum and he couldn't get it through.  The ATO is pretty cluey.
> 
> I dare say that if you were audited you'd need to make sure the exotic cars were not in your driveway OR backyard.




Could you purchase this car from overseas entity (if its a business) at a nicely discounted rate with invoices, and bring into the country that way?


----------



## UPKA

surfingman said:


> Could you purchase this car from overseas entity (if its a business) at a nicely discounted rate with invoices, and bring into the country that way?




U certainly can, bt when registering the car, u'll raise suspisions as they go by the invoice value OR market value which ever one is the highest. unless ur car is so unique and cant be valued, i can see them catching u out for frauding the government.


----------



## yonnie

nizar, ever thought of import taxes to proctect the car industry like Holden, Mitsubishi etc


----------



## Temjin

I've already done a bit of research in all this offshore company / bank account thingly. I also posted a thread here looking for answers,

https://www.aussiestockforums.com/forums/showthread.php?t=6862

The conclusion is that any controlled foreign company income, even if it HAS NOT BEEN DISTRIBUTED (i.e. transferred back to Australia yet), must be declared in Australia. I do not know about the unrealised profit though, but I was told that even UNREALISED profit (if you have not sold the assets yet), are considered a taxable income. 

So if you think you could open an offshore company and use it to open up a trading account and make money, and attempt to withdraw the money OUTSIDE Australia using tactics like anoynomous debit cards, oversea purchases, etc, etc, you will still have to declare the income the foreign company that YOU controlled and pay the appropriate tax. 

I just don't see how an Australian resident can avoid paying any taxes at all for income earned BY ANY MEANS as long as they still remain in Australia and as a residant. The Australian government does sure have their own ways to get their tax money via any means...grrr...

Regardless, there are still advantages of using a company or foreign company for investment/trading purposes. You can use it to invest a property and then have the company rent it to you for depreciation and deducation purposes. Use it to be cars perhaps, buy electronic items perhaps, etc, etc. And more importantly, distribute franked income to you for you to spend, so you don't have to pay any more taxes on that income. 

Anyone who claimed they opened an offshore company/account and earning income (thru trading/investing) without paying tax is definitely BREAKING the law. The ATO aren't stupid and will caught you.


----------



## insider

Temjin said:


> I've already done a bit of research in all this offshore company / bank account thingly. I also posted a thread here looking for answers,
> 
> https://www.aussiestockforums.com/forums/showthread.php?t=6862
> 
> The conclusion is that any controlled foreign company income, even if it HAS NOT BEEN DISTRIBUTED (i.e. transferred back to Australia yet), must be declared in Australia. I do not know about the unrealised profit though, but I was told that even UNREALISED profit (if you have not sold the assets yet), are considered a taxable income.
> 
> So if you think you could open an offshore company and use it to open up a trading account and make money, and attempt to withdraw the money OUTSIDE Australia using tactics like anoynomous debit cards, oversea purchases, etc, etc, you will still have to declare the income the foreign company that YOU controlled and pay the appropriate tax.
> 
> I just don't see how an Australian resident can avoid paying any taxes at all for income earned BY ANY MEANS as long as they still remain in Australia and as a residant. The Australian government does sure have their own ways to get their tax money via any means...grrr...
> 
> Regardless, there are still advantages of using a company or foreign company for investment/trading purposes. You can use it to invest a property and then have the company rent it to you for depreciation and deducation purposes. Use it to be cars perhaps, buy electronic items perhaps, etc, etc. And more importantly, distribute franked income to you for you to spend, so you don't have to pay any more taxes on that income.
> 
> Anyone who claimed they opened an offshore company/account and earning income (thru trading/investing) without paying tax is definitely BREAKING the law. The ATO aren't stupid and will caught you.




There maybe exceptions when you have dual residency... If you were a resident of some tax haven then I guess you'd probably fall under that particular havens tax laws... I don't really know for sure but there must be some exception...


----------



## Temjin

Yeah, there MAY be exceptions I am not unaware of. 

But put it this way, I live in Australia, I WILL AND EXPECT to use public services provided by the Government, and thus, I expect I need to pay an "appropriate" amount of tax to utilise them. If you are a resident of this country using public services, and you are working around not to pay any tax at all by any kind of innovative/exotic tax strategies, then you shouldn't be deserved to live in Australia or use any of its public services.

Of course, that "appropriate" word is very subjective. I am for one, all in for minimising tax as much as possible legally. 

As for duel residency, I have a Hong Kong Permanent resident and the tax structure there is quite favourable for investors. (no tax on CG, low company tax)  In theory, I can open up a bank account in my country of birth and set up an investment firm there AS a Hong Kong resident, paying HK tax. But then, I still think this falls into the whole "controlled foreign company" because I am still technically living in Australia as an resident. So when I need to transfer the money back to Australia, I will still have to pay the applicable company tax minus the tax already paid to the HK government.  

Still need to do more research in regards to this though.


----------



## surfingman

insider said:


> There maybe exceptions when you have dual residency... If you were a resident of some tax haven then I guess you'd probably fall under that particular havens tax laws... I don't really know for sure but there must be some exception...




I am 99% sure the Bahamas have little or no tax with dual residency with Australian citizens, a friend just come back from there will ask next time i see her.

The Bahamas (just 3/4 hour from Miami) receive over 3,000,000 tourists and businessmen each year, whilst the Caymans receive over 500,000. Why do businessmen choose to do business to these tax havens? IT'S SIMPLE. The Caymans, the Bahamas, Bermuda, Vanuatu and the Turks & Caicos Islands have no individual or corporate income taxes, no estate, inheritance or gift taxes, no employment taxes, no death duties, no withholding taxes, no sales taxes, no any kind of taxes! 
http://www.global-money.com/item.print.php?id=39

not sure of the legitimacy of this site but thats what i thought....


----------



## insider

Temjin said:


> Yeah, there MAY be exceptions I am not unaware of.
> 
> But put it this way, I live in Australia, I WILL AND EXPECT to use public services provided by the Government, and thus, I expect I need to pay an "appropriate" amount of tax to utilise them. If you are a resident of this country using public services, and you are working around not to pay any tax at all by any kind of innovative/exotic tax strategies, then you shouldn't be deserved to live in Australia or use any of its public services.
> 
> Of course, that "appropriate" word is very subjective. I am for one, all in for minimising tax as much as possible legally.
> 
> As for duel residency, I have a Hong Kong Permanent resident and the tax structure there is quite favourable for investors. (no tax on CG, low company tax)  In theory, I can open up a bank account in my country of birth and set up an investment firm there AS a Hong Kong resident, paying HK tax. But then, I still think this falls into the whole "controlled foreign company" because I am still technically living in Australia as an resident. So when I need to transfer the money back to Australia, I will still have to pay the applicable company tax minus the tax already paid to the HK government.
> 
> Still need to do more research in regards to this though.




I know what you're saying and I agree with you 100%... However we are simply discussing possibilities not actually attending and fulfilling them... Anyway this is my favorite thread for obvious reasons...


----------



## insider

Apparently Tony and Cherri Blair, the English prime minister, is being accused of utilizing offshore accounts with treasury bonds and what not... They are not proven claims of course... But what a role model eh?


----------



## Temjin

insider said:


> I know what you're saying and I agree with you 100%... However we are simply discussing possibilities not actually attending and fulfilling them... Anyway this is my favorite thread for obvious reasons...




Heh, I agree on that this is one of many threads that caught my attention. 

I completely understand where you are coming from. I think I have a similar "similar" mindset as you do right now on all these "tax" minimising issues.  



			
				surfingman said:
			
		

> I am 99% sure the Bahamas have little or no tax with dual residency with Australian citizens, a friend just come back from there will ask next time i see her.
> 
> The Bahamas (just 3/4 hour from Miami) receive over 3,000,000 tourists and businessmen each year, whilst the Caymans receive over 500,000. Why do businessmen choose to do business to these tax havens? IT'S SIMPLE. The Caymans, the Bahamas, Bermuda, Vanuatu and the Turks & Caicos Islands have no individual or corporate income taxes, no estate, inheritance or gift taxes, no employment taxes, no death duties, no withholding taxes, no sales taxes, no any kind of taxes!
> http://www.global-money.com/item.print.php?id=39
> 
> not sure of the legitimacy of this site but thats what i thought....




Yes, there are literally hundred of different offshore companies in which they have extremely attractive tax structure specifically designed to lure in foreign investors. 

This is one of my favorite offshore site, http://www.offshoresimple.com/

Having said that, the ATO is fully aware of these tax haven countries and legistrated the concept of "controlled foreign company income" tax rules. If your foreign company aren't paying tax in those foreign countries, you will have to pay them in this country regardless. If your foreign company is being taxed at some rate, you will either get credit from the ATO (if you paid more tax than you need to as if you are in Australia) or pay the remaining tax that is not yet paid according to the local rates.

Stupid tax laws eh? Living overseas seem to be a better option now.


----------



## Broadside

insider said:


> I spoke to a fund manager today... and there is nothing illegal about setting up a company over seas with an offshore bank account and trading through the company... The only issue is bringing the money to Australian shores... They will ask questions... But you either bring the money in physically or discretely (as in small portions electronically) or you spend it all overseas... So basically where it gets iffy is where you try to bring it back...




yes, bring the money in discretely or spend it overseas - this is called tax avoidance, not tax minimisation, and it is illegal.  You probably won't get caught but don't kid yourself it is within the law or is even ethical.  Yes, ethics, I know it hasn't really rated a mention on this thread yet but there is something to be said for putting something back into the country for services, healthcare, even looking after those who can't look after themselves.

Sorry to open a can of worms


----------



## Julia

Broadside said:


> Yes, ethics, I know it hasn't really rated a mention on this thread yet but there is something to be said for putting something back into the country for services, healthcare, even looking after those who can't look after themselves.
> 
> Sorry to open a can of worms



Don't apologise, Broadside.  It's a good focus to have.
I think I'm partly a closet socialist at heart.  Good onyer.


----------



## hongwong

Broadside said:


> yes, bring the money in discretely or spend it overseas - this is called tax avoidance, not tax minimisation, and it is illegal.  You probably won't get caught but don't kid yourself it is within the law or is even ethical.  Yes, ethics, I know it hasn't really rated a mention on this thread yet but there is something to be said for putting something back into the country for services, healthcare, even looking after those who can't look after themselves.
> 
> Sorry to open a can of worms




u for real ?

there is ethics and there is stealing .........

I suggest you look into the history of tax and why we never had to pay tax .....

Happy to put back into the country, just not happy putting my country in hands of dip sticks.  

Think about this ... on average we are working for 3 months for the goverment.

So please dont confuse ethics with not tax minimisation.  As point earlier by theasxgorilla .. what kerry packer said.

During the inquiry he repeatedly berated the politicians conducting it, and the government. When asked about his company's tax minimisation schemes, he replied: "Of course I am minimising my tax. And if anybody in this country doesn't minimise their tax, they want their heads read, because as a government, I can tell you you're not spending it that well that we should be donating extra"

If you are that great on ethics then i suggest you stop investing in 99% of the companies out there as 
BHP is "Raping the land", Cole Myer is exploiting some poor asian kid in China and so on so on ..

NEXT time I catch the public transport in Australia .. i will think how wonderful our goverment is doing ,.... but it ok, I am sure the tax man will have their Car supplied for them from the tax payer to bring them around .....

You are being a good citizen of australia by saying no to taxes ; as this isa crippling factor for australia ...  ever wonder why places with no/small taxes are so far ahead ......

Yes it good to give back, but u can kept giving food to the a goldfish till it over eat itself and dies.


----------



## Broadside

hongwong said:


> u for real ?
> 
> there is ethics and there is stealing .........
> 
> I suggest you look into the history of tax and why we never had to pay tax .....
> 
> Happy to put back into the country, just not happy putting my country in hands of dip sticks.
> 
> Think about this ... on average we are working for 3 months for the goverment.
> 
> So please dont confuse ethics with not tax minimisation.  As point earlier by asxgolleria .. what kerry packer said.
> 
> During the inquiry he repeatedly berated the politicians conducting it, and the government. When asked about his company's tax minimisation schemes, he replied: "Of course I am minimising my tax. And if anybody in this country doesn't minimise their tax, they want their heads read, because as a government, I can tell you you're not spending it that well that we should be donating extra"
> 
> If you are that great on ethics then i suggest you stop investing in 99% of the companies out there as
> BHP is "Raping the land", Cole Myer is exploiting some poor asian kid in China and so on so on ..
> 
> NEXT time I catch the public transport in Australia .. i will think how wonderful our goverment is doing ,.... but it ok, I am sure the tax man will have their Car supplied for them from the tax payer to bring them around .....
> 
> You are being a good citizen of australia by saying no to taxes as this is a crippling factor for australia ...  ever wonder why places with no taxes are so far ahead ......




ethics is a personal thing...I am well aware of what Kerry Packer said, it was a good sound byte and who likes paying the government when they waste it anyway, right.  But the thing is, if everyone takes that cynical view, the country will fall apart, because a certain level of taxes is required for society to function.  You cannot rely on people showing voluntary largesse, this thread is a case in point!  Back to Kerry Packer again, he had a State Funeral funded by us - well those of us who pay tax anyway - that is ironic.  He paid something like 15% tax on his earnings through tax minimisation.

Yes, I am for real, those of us who are doing well do owe something to our society in my opinion.  What about people who can't look after themselves? not dole bludgers, but the elderly, the handicapped, and so on?  Oh well, that's someone else's problem.


----------



## hongwong

Broadside said:


> Yes, I am for real, those of us who are doing well do owe something to our society in my opinion.  What about people who can't look after themselves? not dole bludgers, but the elderly, the Handicapped, and so on?  Oh well, that's someone else's problem.





Yes that would be good. doing this.  

SAVE up for a rainner day, if you run into trouble I am sure there is some work you can do .... 

If you loose your job, cut down on your expense and look for a job.  Given back to society is a must, but in what form ? 

As I kind of think the goverment suck at it looking after soceity, so if you reduce your tax you feel that strongly about your "ethics" and want to give back to soceity --- feel free to donate your tax returns to charity, because the govement do a dumb Azz job in looking after the social aspect of this country.

EG. 
Homeless people, ..... how many minister does it take to look after the homeless ..... well let me give you a  big tip, a group of people called the "salavation army" do a better job, i suggest you give the minister pay packet to the salvo to look after the homeless. 

Hence you can be a dumb azz;  thinking you are doing the country good by giving back to society and pay your taxes or get your tax return and donate it to some charity, hire a workman to fix a pothole, plant a tree with your tax return or even help give up your saturday to help the handicapped.

BECAUSE the goverment are not very smart at doing this.

So please dont mix up your ethics, social standard etc.

I make a profit, I choose what I want to be done with the profits but this goverment taxes my profits ........  The goverment go around wasting it, instead of re-investing in the best way. hence i dont want to give any more money to dumb people.

I hope people are smart enough to work this out.

edit :
you said :
Back to Kerry Packer again, he had a State Funeral funded by us - well those of us who pay tax anyway - that is ironic. He paid something like 15% tax on his earnings through tax minimisation.

Yep and this is why I try not to give money to dumb people so they dont waste it on your above point. I think kerry was pretty smart even when he RIP ... he did not pay much tax, when he died he got a state funeral funded by our dumb polication parties ....

But i guess he made so much money and saved so much in tax returns that he fitted all the ambulance in NSW with heart machince at a cost of 200,000 each AUD ....  what a smart, social, ethical person he was or he could have given all that money to the goverment and I bet they would have done the same thing .....


----------



## Broadside

hongwong said:


> I make a profit, I choose what I want to be done with the profits but this goverment taxes my profits ........  The goverment go around wasting it instead of re-investing in the best way.




I agree there is waste, and I agree there is too much taxation, or rather, the tax system is inefficient.  And I agree that charity is a good solution if you feel the need to give something back to society.  But without tax, do you really believe the amount of charity given will meet the needs of society?  I don't believe that because the system is flawed, we should avoid it altogether.  There will always be a need for governments, and likewise there will always be a need for taxation to support those governments, in any civilised society.

I am not a naiive do-gooder, I like making a dollar as much as anyone, but I raised the question of ethics because each individual has to make a decision how far they will go to "minimise" tax and the consequences if everyone takes a similar view.


----------



## theasxgorilla

hongwong said:


> Lol theasxgorilla, i can see u still hate the TAX man with more passion .... I thought distances makes the heart grow fonder?
> 
> Example A) You are  farmer.
> I believe there is farming conferencing in country X or Y.  You just have to prove it.  The airfare, meal and hotel for that conference is tax  detectable.
> 
> Hence find a share trading conference and go to it. …..
> Just have to prove there was one there etc ..
> 
> CGT gain to reduce, there must be a GCT loss.
> 
> GCT is one of the worst things on a free market ….




You mean they have share trading conferences in Australia???  Cool!


----------



## Junior

By minimising income tax, CGT etc. you will have more disposable income.  This extra income will most likely be spent on consumer goods - which have GST attached....hence there is no need to feel guilty about trying to legally minimise tax, you'll be sending a decent portion of your wealth to the government anyhow.


----------



## hongwong

Broadside said:


> I agree there is waste, and I agree there is too much taxation, or rather, the tax system is inefficient.  And I agree that charity is a good solution if you feel the need to give something back to society.  But without tax, do you really believe the amount of charity given will meet the needs of society?  I don't believe that because the system is flawed, we should avoid it altogether.  There will always be a need for governments, and likewise there will always be a need for taxation to support those governments, in any civilised society.
> 
> I am not a naiive do-gooder, I like making a dollar as much as anyone, but I raised the question of ethics because each individual has to make a decision how far they will go to "minimise" tax and the consequences if everyone takes a similar view.




YES . giving away to people make the person feel good about them selves

Why do you think rich people like warrent buffet, bill gates give away there fortune ....

I would like to point out the goverment before ww1 and ww2 was doing ok and no one was paying taxes back them .... ?


----------



## nizar

insider said:


> I know what you're saying and I agree with you 100%... However we are simply discussing possibilities not actually attending and fulfilling them... Anyway this is my favorite thread for obvious reasons...




Really?
I thought the 5k-50k would be your favourite thread


----------



## nomore4s

nizar said:


> Really?
> I thought the 5k-50k would be your favourite thread




lol, yeah but now he's trying to work out how not to give most of it to the taxman:


----------



## Temjin

To minimise tax or not to ethical discussion again....

Let's put this very simply.

ILLEGAL Tax avoidance = BAD (for yourself and for society)

LEGAL Tax minimisation = GOOD (for yourself only )

A rational investor will do everything in his/her power to maximise his/her profit via an acceptable risk (to that person) through any LEGAL means.

So I tend to agree with Broadside here that if everyone take the view of ILLEGALLY AVOIDING TAX is a better way of doing things because they give excuses like the government is wasting their tax money anyway, then they don't deserve to live in this country at all. 

I agree that it's important, or rather, natural for one to place his/her priority on their interest over others, but to totally ignore those who are in need of help (through tax money) is simply unethical. 

Yes, you can argue using countries that have nil taxes and explain how good they are running their society without it, etc, etc, blah blah blah. 

However, the fact remains that as long as you are living in Australia, you WILL OBEY the tax rules regardless of whether you like it or not. If you don't, then please leave the country and earn your money elsewhere. 

Or maybe start a political party and change the tax rules.  

Personally, I will try my very best to minimise my tax liability as long as it is legal. Completely avoiding paying tax is impossible in this country.


----------



## theasxgorilla

Broadside said:


> yes, bring the money in discretely or spend it overseas - this is called tax avoidance, not tax minimisation, and it is illegal.  You probably won't get caught but don't kid yourself it is within the law or is even ethical.  Yes, ethics, I know it hasn't really rated a mention on this thread yet but there is something to be said for putting something back into the country for services, healthcare, even looking after those who can't look after themselves.
> 
> Sorry to open a can of worms




Ethical or not the reality is that smart money tends to gravitate to where it is taxed the least (and least erroded by inflation).

Consider this irony.  Sweden is one of the most heavily taxing countries in the world.  The GST here is about 25%, and the highest marginal tax rate can be up to 55%, yet the company tax rate is just 28%.  And just a few years ago the Swedish government created the most competitive holding company structure (from a tax perspective) in Europe and perhaps even the entire western world.   Why?  Can only be two reasons.  To attract business affairs to Sweden and to keep hold of those already here.

Why do you think people go to Hong Kong to work??  Why do you think James Hardie relocated it's head office to the Netherlands??  Why is Ikea owned via a series of entities head quartered in the Netherlands??  Why do wealthy people go to Austria to retire??  Why do all the GP drivers live in Monaco??


----------



## insider

nizar said:


> Really?
> I thought the 5k-50k would be your favourite thread




Nooo way...  That thread got way too personal for my liking...


----------



## insider

hongwong said:


> YES . giving away to people make the person feel good about them selves
> 
> Why do you think rich people like warrent buffet, bill gates give away there fortune ....
> 
> I would like to point out the goverment before ww1 and ww2 was doing ok and no one was paying taxes back them .... ?




What I'd love is a tax system where you as the tax payer gets to vote where a portion of your paid tax gets to go specifically... ie. Schools, hospitals, police cameras  yeah right... Dole Bludgers


----------



## insider

theasxgorilla said:


> Why do you think people go to Hong Kong to work??  Why do you think James Hardie relocated it's head office to the Netherlands??  Why is Ikea owned via a series of entities head quartered in the Netherlands??  Why do wealthy people go to Austria to retire??  Why do all the GP drivers live in Monaco??





Because they're smart... 

Remember Monacco have no tax but is a wonderful and well maintained place because the people who live there donate.


----------



## Santob

insider said:


> Because they're smart...
> 
> Remember Monacco have no tax but is a wonderful and well maintained place because the people who live there donate.





Donate? sounds like a tax.


----------



## theasxgorilla

insider said:


> Because they're smart...
> 
> Remember Monacco have no tax but is a wonderful and well maintained place because the people who live there donate.




I doubt that they each donate 1/3 of their wage each month.  THAT sounds like a tax.


----------



## hongwong

Temjin said:


> To minimise tax or not to ethical discussion again....
> 
> Let's put this very simply.
> 
> ILLEGAL Tax avoidance = BAD (for yourself and for society)
> 
> LEGAL Tax minimisation = GOOD (for yourself only )
> 
> I agree that it's important, or rather, natural for one to place his/her priority on their interest over others, but to totally ignore those who are in need of help (through tax money) is simply unethical.
> 
> Yes, you can argue using countries that have nil taxes and explain how good they are running their society without it, etc, etc, blah blah blah.
> 
> However, the fact remains that as long as you are living in Australia, you WILL OBEY the tax rules regardless of whether you like it or not. If you don't, then please leave the country and earn your money elsewhere.
> 
> Or maybe start a political party and change the tax rules.
> 
> Personally, I will try my very best to minimise my tax liability as long as it is legal. Completely avoiding paying tax is impossible in this country.




dont confuse the issue .. obeying the laws and if you dont like it please leave the country.

PLEASE dont j-walk, please dont litter, please dont sneak in a quick water of the plants even so we are in a drought.  PLEASE dont speed.  If u dont like the above please leave the country because democray mean obeying the law and dont argue with hilter.

Why did we have taxes in the first place ...

HMMMMM it was to fund the war ...... and then people started to obey the law and got used to paying their taxes.
My point is this

Dont confuse obeying the law with being a good moral person.  It has nothing to do with being a good moral person.

You may pay all your taxes and go kill people...  

The moral high ground ship got sank ages ago.

WAIT A MINUTE let me picture this "good intentions thing we have going"

Let have the good intentions of paying our taxes for the benefit of our nation because we need to provide for people that are in need. 50 millions goes to the homeless this year and 24 billion to defense.... I guess the good intentions is that we have to defend them from the war "againist the cold" .. or " the weapons of mass food production".

http://en.wikipedia.org/wiki/Tax#Purposes_and_effects


----------



## Broadside

hongwong said:


> dont confuse the issue .. obeying the laws and if you dont like it please leave the country.
> 
> PLEASE dont j-walk, please dont litter, please dont sneak in a quick water of the plants even so we are in a drought.  PLEASE dont speed.  If u dont like the above please leave the country because democray mean obeying the law and dont argue with hilter.
> 
> Why did we have taxes in the first place ...
> 
> HMMMMM it was to fund the war ...... and then people started to obey the law and got used to paying their taxes.
> My point is this
> 
> Dont confuse obeying the law with being a good moral person.  It has nothing to do with being a good moral person.
> 
> You may pay all your taxes and go kill people...
> 
> The moral high ground ship got sank ages ago.
> 
> WAIT A MINUTE let me picture this "good intentions thing we have going"
> 
> Let have the good intentions of paying our taxes for the benefit of our nation because we need to provide for people that are in need. 50 millions goes to the homeless this year and 24 billion to defense.... I guess the good intentions is that we have to defend them from the war "againist the cold" .. or " the weapons of mass food production".
> 
> http://en.wikipedia.org/wiki/Tax#Purposes_and_effects




hongwong now it is *you* that is confusing the issue! if you don't like how the money is spent, you try and have policy changed, you don't just stop paying taxes.  If there were no income tax - high defence spending or not - our infrastructure would be in an even sorrier state than it is already.  I do not believe that voluntary donations would be adequate to protect and provide for those who need aid, healthcare, education and so on.

As for Monaco, I am sure there must be taxes of some sort, maybe not income taxes, as I do not believe infrastructure would be funded by donation.  I am certainly not against reallocating resources, restructuring the tax system but the notion that abolishing tax could work for our society is preposterous, and it's just a rationalisation for trying to avoid tax.


----------



## hongwong

Broadside said:


> hongwong now it is *you* that is confusing the issue! if you don't like how the money is spent, you try and have policy changed, you don't just stop paying taxes.  If there were no income tax - high defence spending or not - our infrastructure would be in an even sorrier state than it is already.  I do not believe that voluntary donations would be adequate to protect and provide for those who need aid, healthcare, education and so on.
> 
> As for Monaco, I am sure there must be taxes of some sort, maybe not income taxes, as I do not believe infrastructure would be funded by donation.  I am certainly not against reallocating resources, restructuring the tax system but the notion that abolishing tax could work for our society is preposterous, and it's just a rationalisation for trying to avoid tax.




I suggest you go read your post on page 6 ... i am a good person i pay my taxes ....

Our infrastructure would be in a sorry state? ... So how come when things get privatize 90% of the time service improves?  I suggest you go read the plaque at the libary and uni that people have donated their money to !

THINK why we must hold that fun raise each year at our schools, must be because of the great infrastructure .... wait there is a private school system that our taxes are funding .... hmmmmmm

MEDICARE ....... what a great "infrastructure, this is" dont forget to go private next year ...

Why would i want to go into govement ... to change a policy to benefit ppl who want to pay more tax because they are being good moral people.  I would rather find loop holes and donate my tax return to worth while cause.


----------



## Temjin

Broadside said:


> and it's just a rationalisation for trying to avoid tax.




That explains exactly what he is trying to do right now. I agree stop trying to confuse the issue here. Stop trying to rationalise the belief that AVOID paying tax ILLEGALLY is THE RIGHT THING to do in THIS country. 

I've already said it so simply, you avoid tax in this country, you break the law, and you will be penalised for it. Which part of this sentence do you not understand?? Why are you trying to rationalise it and argue that this is not right? 

You can whing all you want about why you shouldn' be paying tax and why you should avoid paying them because of your own "beliefs" and "rational explanations". But when you do get caught in these illegal acts, I would say good luck to you at convincing the judge and jury with your beliefs of the social system in which this country operates in.  

You may have your own "moral ground", but if the mass disapprove your beliefs, you will not achieve anything at all. Being a contrarian is not a bad thing, but when you do so and directly offend/affect the majority of people in this society, then you do not have a place living here. 

It's as simple as that, so please don't confuse the issue.


----------



## insider

I see what is happening here... People are expressing their resentment towards the government because of what ever reason... I have been fined unjustly a few times via parking inspectors and police officers that go against morals and ethics and fine people... Sure you can argue and it is word against word or you could just say you broke the law even though you weren't morally wrong, but the truth is at the end of the day we are looking after our self interests because we are fulfilling the most basic instinct we have, Self Preservation... Today we call this "I was just doing my Job".


----------



## theasxgorilla

Temjin,

With all due respect it comes across that you have a surface understanding of this issue.

As the world becomes more globalised and technologies continue to flatten access to all kinds of things once kept up on the top shelf out of reach of the layman (think: CFDs), you will find that other entities begin to compete for the privelage of hosting an investors business activities.  And I can assure you, today, there exist many, many places that will allow you to run a business that does nothing more sophisticated that buying and selling shares for a darn site less tax (fee for service, after all, thats what it is) than the potential 46.5% tax you will pay on your profits in Australia.

Goverments like Australia don't like it and the ATO write lists of known 'tax havens' on their website to try and scare people.  But the fattening of the purses of the tax department and goverment in this country rely on the laymans fear and laziness.

The ASX probably doesn't like CFDs either...and neither do regular market brokers...just like the Trading Post probably doesn't like Ebay and what it's done to their once lucrative rag.  Regardless, the forces in play are bigger than you and I and little Australia.

Keep doing the right thing and you'll be safe...but will you prosper??


----------



## theasxgorilla

insider said:


> I see what is happening here... People are expressing their resentment towards the government because of what ever reason... I have been fined unjustly a few times via parking inspectors and police officers that go against morals and ethics and fine people.




Its interesting Insider.  I am a holder of the share RDF who make traffic management systems (hahaha, I love that....they're speed and red light cameras...get over it!).  So I follow their story well.  Would it surprise you to know that there has been an instance in the US where the state government has over-ruled the local country/province that entered into an agreement with RDF and installed speed/red-light cameras and deemed the system 'unconstitutional'???

We're pretty sharp with that stuff in Australia.  I mean the camera technology and back-end systems that promptly flick you the fine for doing $1.05 and in $1.00 zone.  But whilst we can readily export the technology and the systems its not always possibly to find a group of people as easily subdued into submission by their own authorities as the Aussies.  It's always the same narrow minded arguement and it extends to the tax discussion, "it's the law, you were doing more than the speed limit weren't you??".

For God's sake, even in the UK "they should only be located at accident blackspots and are painted yellow so that motorists are aware of their presence. The Government want motorists to know where 'safety' cameras are so speed and accident figures are reduced."

People need to take a step back and look at the bigger perspective and ask the question, 'whose best interests are the authorities looking after here??'.


----------



## insider

theasxgorilla said:


> Its interesting Insider.  I am a holder of the share RDF who make traffic management systems (hahaha, I love that....they're speed and red light cameras...get over it!).  So I follow their story well.  Would it surprise you to know that there has been an instance in the US where the state government has over-ruled the local country/province that entered into an agreement with RDF and installed speed/red-light cameras and deemed the system 'unconstitutional'???
> 
> We're pretty sharp with that stuff in Australia.  I mean the camera technology and back-end systems that promptly flick you the fine for doing $1.05 and in $1.00 zone.  But whilst we can readily export the technology and the systems its not always possibly to find a group of people as easily subdued into submission by their own authorities as the Aussies.  It's always the same narrow minded arguement and it extends to the tax discussion, "it's the law, you were doing more than the speed limit weren't you??".
> 
> For God's sake, even in the UK "they should only be located at accident blackspots and are painted yellow so that motorists are aware of their presence. The Government want motorists to know where 'safety' cameras are so speed and accident figures are reduced."
> 
> People need to take a step back and look at the bigger perspective and ask the question, 'whose best interests are the authorities looking after here??'.




Unbelievable... I might invest in RDF so that when I see a camera I will be happy about seeing it...


----------



## insider

I noticed that Berumada is in the middle of North and South America, Europe and Africa... That's probably the best place for a Tax Haven... It's sooo close to everything


----------



## Temjin

theasxgorilla said:


> Temjin,
> 
> With all due respect it comes across that you have a surface understanding of this issue.
> 
> As the world becomes more globalised and technologies continue to flatten access to all kinds of things once kept up on the top shelf out of reach of the layman (think: CFDs), you will find that other entities begin to compete for the privelage of hosting an investors business activities. And I can assure you, today, there exist many, many places that will allow you to run a business that does nothing more sophisticated that buying and selling shares for a darn site less tax (fee for service, after all, thats what it is) than the potential 46.5% tax you will pay on your profits in Australia.
> 
> Goverments like Australia don't like it and the ATO write lists of known 'tax havens' on their website to try and scare people. But the fattening of the purses of the tax department and goverment in this country rely on the laymans fear and laziness.
> 
> The ASX probably doesn't like CFDs either...and neither do regular market brokers...just like the Trading Post probably doesn't like Ebay and what it's done to their once lucrative rag. Regardless, the forces in play are bigger than you and I and little Australia.
> 
> Keep doing the right thing and you'll be safe...but will you prosper??




Don't get me wrong theasxgorilla, I agree with most of what you said here and am fully aware of those "circumstances" that are out there. I know there is a game out there that only the rich plays. Likewise, there is a game that is controlled and regulated by the government, that most of the poor/middle class people plays. Being on the fast and rich track is my top priority. 

However, I am still TOTALLY PRO in the act of minimising tax as MUCH AS LEGALLY POSSIBLE. 

Offshore companies and bank accounts have been one of my top list of pursuing such a strategy. I definitely would like to find out more how they can be structured legally. 

I am more inclined toward accelerating the rate in which I acquire wealth (including minimising tax) as much as possible by doing the RIGHT things and be as safe as possible. (standard highest reward verse risk ratio theory) 

However, to break the law and potentially getting myself into deep trouble so I could save even more tax beyond the legitimate means (even if it adds up ALOT in the future), is definitely not my style.  

Sure, I may become richer if I decided to pursue those schemes and try to avoid the ATO, but if I get caught and go to jail for it, that extra cash I've earned over the time does not really matter much. 

You can simply say everyone have their own moral "lines". Some may set further down than I do, and I don't care if they are willing to take that risk.


----------



## insider

Temjin said:


> Don't get me wrong theasxgorilla, I agree with most of what you said here and am fully aware of those "circumstances" that are out there. I know there is a game out there that only the rich plays. Likewise, there is a game that is controlled and regulated by the government, that most of the poor/middle class people plays. Being on the fast and rich track is my top priority.
> 
> However, I am still TOTALLY PRO in the act of minimising tax as MUCH AS LEGALLY POSSIBLE.
> 
> Offshore companies and bank accounts have been one of my top list of pursuing such a strategy. I definitely would like to find out more how they can be structured legally.
> 
> I am more inclined toward accelerating the rate in which I acquire wealth (including minimising tax) as much as possible by doing the RIGHT things and be as safe as possible. (standard highest reward verse risk ratio theory)
> 
> However, to break the law and potentially getting myself into deep trouble so I could save even more tax beyond the legitimate means (even if it adds up ALOT in the future), is definitely not my style.
> 
> Sure, I may become richer if I decided to pursue those schemes and try to avoid the ATO, but if I get caught and go to jail for it, that extra cash I've earned over the time does not really matter much.
> 
> You can simply say everyone have their own moral "lines". Some may set further down than I do, and I don't care if they are willing to take that risk.




The thing with offshore bank accounts is that most of the banks are not obligated to provide any details to even their own authorities hence can't be traced to you...


----------



## insider

Yes... Another reason why you shouldn't buy cars from the used car dealership... you must pay GST...


----------



## insider

Has anybody been keeping up with the news about John Farnams record producer being jailed for 15 months for 'tax avoidance' schemes? I thought tax avoidance was OK but not evasion...


----------



## Kathmandu

insider said:


> I noticed that Berumada is in the middle of North and South America, Europe and Africa... That's probably the best place for a Tax Haven... It's sooo close to everything




Vanuatu is nice this time of year

http://www.pkfvanuatu.com.vu/vanuatu_tax.html

http://www.mooresrowland.com/vanuatu international companies and offshore finance center.html

D


----------



## insider

I think Glenn wheatly couldn't keep his mouth shut...


----------



## ZacR

Insider - avoidance and evasion are exactly the same thing, worded differently and both are illegal. 
Tax MINIMISATION however, is perfectly legal when done properly. But when it comes down to it, as the amount of tax you pay the government increases, the more money you should be earning yourself anyway. 
Wouldn't it better to focus your energy into making more money from investing as opposed to all the effort and trouble that comes along with tax avoidance etc. 
I personally am happy enough to pay the government 30 - 45 cents in the dollar as long as it means everything else is going in my pocket.


----------



## theasxgorilla

ZacR said:


> Wouldn't it better to focus your energy into making more money from investing as opposed to all the effort and trouble that comes along with tax avoidance etc.




Thats exactly what the ATO wants you to think which is why you will do what you will do and others will do what they will do.

I understand that most people struggling to build up an asset base for their families would not want to risk a run in with the ATO, but this doesn't alter the facts about how they operate.


----------



## theasxgorilla

insider said:


> Has anybody been keeping up with the news about John Farnams record producer being jailed for 15 months for 'tax avoidance' schemes? I thought tax avoidance was OK but not evasion...




I hadn't been keeping up with it, but from just doing a quick recap now it would seem this is the real deal.  Tax evasion.  If they're using tax avoidance in the media or elsewhere then they're just blurring the lines, perhaps without knowing better or perhaps even on purpose.  I wouldn't trust the <harsh 4 letter word here> in a million years.  You can arrange your affairs to avoid tax.  Perfectly legal and as far as I'm concerned if you don't do it you're either ignorant, or lazy, or both.  The ATO _modus operandi_ depends on people being both in this country.


----------



## ZacR

You cannot in any legal way AVOID tax. You can just decrease the amount you have to pay. In fact I swear there is a saying - Death and .......


----------



## theasxgorilla

ZacR said:


> You cannot in any legal way AVOID tax. You can just decrease the amount you have to pay. In fact I swear there is a saying - Death and .......




You're speaking in absolutes ie. avoid ALL tax.  I agree...in a world full of VAT or GST or MOMS or whatever name it goes by it's practically impossible to avoid paying some tax.

In anycase...your world, your reality.


----------



## insider

I have to talk to an accountant about tax minimization...  I think people will like this term more


----------



## insider

So far it seems the best way is to set up a company and taxed at 30%


----------



## baxter

Wow - this has been an awesome thread.  It even inspired me enough to join the forums 

I currently trade full-time and am now about to start trading both on my personal accounts and also under a company structure.   The reason for this is that I'm happy to pay tax on personal income tax scale which gives me the benefit of accessing the $6000 tax free threshold and then the 15% rate up to $30,000 this FY 07/08.  However once $30,000 is hit, there is good reason to switch to trading on my company accounts.  

I'll be paying 30% as well, but there is no limit on this.  If I earn another $100,000 it's all taxed at 30%.  Compare this to earning another $100,000 on my personal accounts and I start getting taxed at 40% plus.  Plus, from my recent investigations on the ATO website there are additional benefits which I will be able to use under a company structure (such as having the company purchase a vehicle) - but which I haven't finished looking at yet.  I also plan on keeping the money that I make by the company, in the company as trading capital, and so not making distributions.

Anyone else doing this already?  Any difficulties in acutally setting up company trading accounts - I know some institutions such as COMSEC charge a small amount to set up a company account where they don't for a personal account?  

It certainly seems like an efficient way of minimising tax.

Cheers, Baxter.


----------



## insider

baxter said:


> Wow - this has been an awesome thread.  It even inspired me enough to join the forums
> 
> I currently trade full-time and am now about to start trading both on my personal accounts and also under a company structure.   The reason for this is that I'm happy to pay tax on personal income tax scale which gives me the benefit of accessing the $6000 tax free threshold and then the 15% rate up to $30,000 this FY 07/08.  However once $30,000 is hit, there is good reason to switch to trading on my company accounts.
> 
> I'll be paying 30% as well, but there is no limit on this.  If I earn another $100,000 it's all taxed at 30%.  Compare this to earning another $100,000 on my personal accounts and I start getting taxed at 40% plus.  Plus, from my recent investigations on the ATO website there are additional benefits which I will be able to use under a company structure (such as having the company purchase a vehicle) - but which I haven't finished looking at yet.  I also plan on keeping the money that I make by the company, in the company as trading capital, and so not making distributions.
> 
> Anyone else doing this already?  Any difficulties in acutally setting up company trading accounts - I know some institutions such as COMSEC charge a small amount to set up a company account where they don't for a personal account?
> 
> It certainly seems like an efficient way of minimising tax.
> 
> Cheers, Baxter.




Wow Baxter... So you're saying you can choose whether to be taxed under a company or personal income tax? How quick is it to setup one of these, I'm with Comsec?


----------



## theasxgorilla

baxter said:


> It certainly seems like an efficient way of minimising tax.




Howdy Baxter,

I'm not an accountant, although there are some on this site, but something I would consider in your situation is that a company does not receive the CGT discount for holding a position more than 12 months.  40c becomes 20c if you hold for more than 12 months.  Depending on your trading style this may not even apply to you.

ASX.G


----------



## Broadside

theasxgorilla said:


> You can arrange your affairs to avoid tax.  Perfectly legal and as far as I'm concerned if you don't do it you're either ignorant, or lazy, or both.  The ATO _modus operandi_ depends on people being both in this country.




Alternatively you are happy to make a contribution back to the society which gave you this opportunity.  I know we have already argued over ethics but frankly people who choose to pay their fair share shouldn't be categorised the way you have done.


----------



## theasxgorilla

Broadside said:


> Alternatively you are happy to make a contribution back to the society which gave you this opportunity.  I know we have already argued over ethics but frankly people who choose to pay their fair share shouldn't be categorised the way you have done.




I suppose that is why there is no capital gains tax for non-residents then.


----------



## Broadside

just be grateful not everyone tries to avoid tax, because our society would be the poorer for it.


----------



## theasxgorilla

Broadside said:


> just be grateful not everyone tries to avoid tax, because our society would be the poorer for it.




Hmmm.  You're probably not receiving the point of my post.  I'll quote William J. Berstein as he explains it better than I could hope to:

_"If individuals cannot keep what they earn, they will not produce.  If, on the other hand, those who produce the most are allowed to keep what they earn, inequalities will increase, and as inequality rises, societal well-being deteriorates."_

I am actually all for redistributionist taxation.  I want _societal well-being_.  But that is not what this thread is about.  It's about _strategies to minimise tax_ which deals with the former part of that quote.

Societal well-being is as much about bringing the middle and lower classes up as it is taxing the upper class.  And one way to improve middle and lower class standard of living is to ensure that the money they earn is not _unnecessarily_ filtered through the inefficiencies of government.

You don't realise it and the ATO has a conflict of interest with it, but it's actually in Joe Average's best interest to try and reduce his own tax.  Lest it turn into government spending.  When the Goverment spends a dollar it seems to always get less for it than the public would spending that same dollar.


----------



## Broadside

Hmm, as I read it the point of your post was that people who didn't avoid tax were ignorant or lazy or both.  Some people choose not to minimise tax because they see it as a way of giving something back - now you may choose to avoid tax and "give back" in other ways, or not, but the categorisation is completely out of order.  If everyone took the tax avoidance path, the level of services and welfare support would be in disarray.  Or should it just be a survival of the fittest free for all with no safety nets in place?

I would rather support some people who bludge on welfare if it means those genuinely in need are cared for.  Even as it stands at the moment, people with intellectual disabilities etc have minimal support from the government, as do their families.  If you think avoidance of tax will help situations like that - and that is but one example - then we agree to disagree.  You have your ethics and I have mine.  It doesn't mean I am lazy or ignorant.


----------



## theasxgorilla

Broadside said:


> You have your ethics and I have mine.  It doesn't mean I am lazy or ignorant.




Okay, just so I understand your moral-high-ground perspective and to help me to also put into perspective if you're also possibly some sheep short in your top paddock, are you telling me you make no deductions or any attempt at deductions on your tax return?  You just pay up?


----------



## Broadside

I claim deductions, I don't avoid tax by all means possible e.g. offshore accounts and trusts....I have the means to do so, I choose not to.


----------



## theasxgorilla

Broadside said:


> I claim deductions, I don't avoid tax by all means possible e.g. offshore accounts and trusts....I have the means to do so, I choose not to.




Thank you for the perspective check.  You clearly are not ignorant, you are not lazy and you avoid taxes.  BTW, what was that saying about arguing with people on the Internet???


----------



## Broadside

now we are splitting hairs, there is a difference between tax avoidance and tax minimisation.  I will confess to being lazy but it's not relevant to my argument, I am not lazy in financial matters, just other matters.

Look, I am not trying to be self righteous, but I honestly believe that if everyone seeks to avoid tax to the fullest extent possible, a lot of people who can't help themselves will be hit very hard.

What about oldies who have no families to support them, who cares for them?  Disabled kids whose parents must give them full time care, and who die of old age not knowing who will look after them in their absence? Now you may say I am hitting the emotive button with examples like these, but they are real, and even as it stands now, there is very little support.  Now imagine if we all avoid our tax burden, do you think that despite our personal wealth increasing, there will be benign benefactors making donations to all these causes which would adequately replace government funding?  I don't, because human nature (a generalisation, but a fair one) is generally selfish. 

Government is wasteful, imperfect, but without it - and without adequate funding - services to those in need will get worse and worse.  If government budgets are cut, the first thing to be cut will be services, not bureaucratic jobs.

So on a micro scale, avoid tax, do whatever you like if you're fine with that....but don't kid yourself that on a macro scale it makes no difference when everyone else does the same as you.

I guess it comes down to a matter of degrees....early in this thread there was discussion of offshore bank accounts and bringing wads of cash back into the country...offshore trusts etc etc.  I am all for claiming deductions and maximising my personal wealth, but I won't go to the lengths some here are advocating, which I see as shirking responsibilities to others who are lazy / ignorant / pay their share .  Have a good day Mr Gorilla, you fight the good fight but I don't agree with you.


----------



## theasxgorilla

I'll say this, terminology differences aside, to the absolute best of my knowledge nothing I have advokated is illegal.  The ATO is pretty sharp and they've got the legislation tied up pretty tight indeed.  To try and get one past them is taking a big risk...I'm sure Glenn Wheatley would agree.  As for fighting the good fight...I couldn't think of it as anything less than such.

_Lord Clyde said taxpayers have the right to legally avoiding paying tax. "No man in the country is under the smallest obligation, moral or other, so to arrange his legal relations to his business or property as to enable the Inland Revenue to put the largest possible shovel in his stores," he said. *"The Inland Revenue is not slow, and quite rightly, to take every advantage which is open to it under the Taxing Statutes for the purposes of depleting the taxpayer's pocket. And the taxpayer is in like manner entitled to be astute to prevent, so far as he honestly can, the depletion of his means by the Inland Revenue."*_

The ATO's interests do not lie with the sick and needy and aged that you mention, their context is the "Taxing Statutes"...THAT needs to be kept in mind when you arrange your tax affairs.


----------



## Broadside

Lord Clyde can say what he likes, it's simple really....less tax revenue = less services.

End of story.


----------



## baxter

insider said:


> Wow Baxter... So you're saying you can choose whether to be taxed under a company or personal income tax? How quick is it to setup one of these, I'm with Comsec?




Hi Insider & ASX Gorilla

Insider - setting up a company is not difficult and could be done within a week if you were so inclined.  There's plenty of info on ASIC"s website about it, or you can call them and them and they'll explain the process.  I have had a company for about the last 4 years, and at that time it was simply a matter of filling out paperwork, making decisions about directors/constitutions/share holdings etc. and paying the lodgement fee - was about $750 from memory.  If you are reasonably compentent it's easy to do your own tax returns and BAS statements and so the only cost 'really' to me of having it set up is the $220 annual fee.

As for choosing where you're taxed, you can't 'choose' as such as you'll be taxed according to where you place the trade.  For example, if you're trading on your personal account, it will be added to your personal income.  If you're trading on a company account, the company will pay tax on the profits.  Each will be taxed according to the relevant rate.  

So from my understanding, say I make $30,000 by October this year, then I have gained the maximum benefits from my personal income as I will be taxed at 30% after that and I might as well switch to trading on my company account.  It will also be taxed at 30% but there appears to be much larger deductions that can be made, and additional benfits to trading as a company - many of which I'm still exploring at present.

So does this make sense?

And ASX Gorilla, you're right, the majority of my trades are intraday, or 2 day trades, and very rarely I have a trade that go for a month or 2.  Last year I think my longest trade was 2 1/2 months, so the 50% capital gain doesn't apply anyway.

Cheers, Baxter.


----------



## Odduna

money tree said:


> collecting is deemed a tax-free "hobby".
> 
> therefore, you could sell your "collection" of classic cars with no CGT.
> 
> doesnt have to be cars. Some people make a good living "collecting" paintings.




If you live on the sale of your 'collectables', chances are, ATO will deem you to be in business, not a hobby.

If not in business, and if an asset is deemed a collectable (as per the ITAA 1997) and has a value greater than $500 when you purchased it, it will be subject to CGT. 

However, that being said, cars are an exempt asset from CGT. 



Duckman#72 said:


> As I've mentioned on this forum before - Money Tree tends to over simplify issues.
> 
> It is not as simple as saying collecting things means "hobby".
> 
> Just be careful basing your ITR on that assumption.





Thought i would reply to Money Trees statement to give a bit more depth to the subject (although there is a lot more i could put in).


----------



## insider

Odduna said:


> If you live on the sale of your 'collectables', chances are, ATO will deem you to be in business, not a hobby.
> 
> If not in business, and if an asset is deemed a collectable (as per the ITAA 1997) and has a value greater than $500 when you purchased it, it will be subject to CGT.
> 
> However, that being said, cars are an exempt asset from CGT.
> 
> 
> 
> 
> Thought i would reply to Money Trees statement to give a bit more depth to the subject (although there is a lot more i could put in).




If you sell a certain number of cars a year you need a used car sales license and therefore it is taxed


----------



## Odduna

insider said:


> If you sell a certain number of cars a year you need a used car sales license and therefore it is taxed




If you are deemed in business or not, the sale of cars is not subject to CGT (capital gains tax). It is an excluded asset under the legislation. 

That being said, i am not saying that they would not pay income tax on the sale of their 'trading stock' if they were in business


----------



## Flying Fish

amazing info here. thx guys


----------



## MS+Tradesim

Insider,

1) Stop being a resident of Australia for tax purposes by spending more than 50% of the f/year outside of the country.
2) Be resident in Vanuatu for more than 50% of the year
3) Establish trust and co. in Vanuatu
4) Trade ASX (or whatever)
5) Pay no income/CGT tax anywhere.

(Hint: read ATO site)


----------



## TheGreenOct

Just thought I update this thread with the useful matter in the other thread here: 

https://www.aussiestockforums.com/forums/showthread.php?t=9866



> SOARING house prices and plummeting share prices can tempt investors into seeking clever ways to cut their tax bill.
> 
> One of the most popular strategies - selling then re-buying shares in a company to lock in a capital loss - has been a grey area for years, but has just been given a red card by the Australian Taxation Office.
> 
> Hood Sweeney director of accounting and business services Matthew Fox said the ATO last month clarified its attitude to claiming tax losses from "wash sales'' and would deny any tax losses claimed this way.
> 
> "A wash sale is described as a sale and purchase of the same asset within a short period of time where the sale and purchase cancel each other out and there is little or no change in the economic exposure of the owner of the asset,'' Mr Fox said.
> 
> He said it had been a widely used strategy by people facing a capital gains tax bill who also had some assets where a capital loss would occur if they sold it - which could offset much or all of the gain.
> 
> "For example, Pete has sold an investment property and made a $50,000 gain. In his share portfolio he has BHP shares that cost $70,000, but are now worth $50,000. His strategy is then to instruct his broker to sell the shares on the market and re-purchase them the next day. He then realises a loss of $20,000 which he uses to reduce the gain on the investment property.''
> 
> Mr Fox said the ATO's recent ruling was that if the main purpose of the wash sale was to obtain a tax benefit, the loss would be denied.
> 
> "The loss will also be denied if Pete rather than re-purchasing in his name purchases the shares in a trust controlled by him,'' he said.
> 
> Mr Fox said to avoid an ATO rejection, the investor would need to show another purpose other than the tax benefit, such as restructuring their affairs.
> 
> "Other options to avoid this problem are to delay the re-purchase decision and to re-purchase based on market condition changes or independent market research, or to purchase an alternative stock, like Rio Tinto in Pete's case,'' he said.
> 
> "Caution needs to be exercised if you are intending to realise an asset to crystallise a capital loss as the rules for deductability of the loss are now a lot stricter. You should seek the advice of a suitable qualified taxation advisor before implementing such a strategy.''




So basically call options or warrants would do the trick if they are available I guess.


----------



## WinnieBlues

*Trading tax minimisation strategies*

Hi everyone....i was wondering if people could share some ideas for minimising tax whilst share trading, besides the usual 50% cgt discount if held for longer than a year. 

Set up a company for my share trading??? I suppose that setting up a trust would be out of the question as i have no dependents and am single.

Thanks in advance for all replies


----------



## Wysiwyg

*Re: Trading tax minimisation strategies*



WinnieBlues said:


> Hi everyone....i was wondering if people could share some ideas for minimising tax whilst share trading, besides the usual 50% cgt discount if held for longer than a year.
> 
> Set up a company for my share trading??? I suppose that setting up a trust would be out of the question as i have no dependents and am single.
> 
> Thanks in advance for all replies




First of all you aren`t trading shares if you hold for more than a year, more investing. To lower your taxable income amount, decrease assessable income amount by claiming allowable deductions.


----------



## cutz

*Re: Trading tax minimisation strategies*

Hi WinnieBlues,

As Wysiwyg pointed out by claiming allowable deductions, the tax office has a publication for share traders if you want to dig around there.

All i can add is at the end of the year get rid of your dogs and don't get too bogged down trying to avoid taxes, the main focus should be pulling an income.


----------



## WinnieBlues

*Re: Trading tax minimisation strategies*

thanks to all....no prob income wise, 100k a year gross for not too much stress....am making too much money from shares buying and selling, aver 3k/week over last 10 months...some big wins recently

looking to short the market very shortly...big mac my fist target...from 16 bucks to circa 56 bucks in no time....ripe for the picking imo

am thinking about setting up a company to do my sharetrading through...just after opinions of those that have been there, done that

cheers to all


----------



## Wysiwyg

*Re: Trading tax minimisation strategies*

Unreal!


----------



## WinnieBlues

*Re: Trading tax minimisation strategies*



Wysiwyg said:


> Unreal!




thanks...have almost liquidated the last of my holdings.....i feel it has risen too fast, too quickly, and that goes for the main global indices as well  dax, ftse, dow.....i feel that the big US banks have been using their money to buy up indices...see goldman criminals trading profit up, likewise jp morganriopoff

feel its time to short some big players...like i said, mac factory is my first target

cheers, good luck to all


----------



## Sir Osisofliver

*Re: Trading tax minimisation strategies*



WinnieBlues said:


> Hi everyone....i was wondering if people could share some ideas for minimising tax whilst share trading, besides the usual 50% cgt discount if held for longer than a year.
> 
> Set up a company for my share trading??? I suppose that setting up a trust would be out of the question as i have no dependents and am single.
> 
> Thanks in advance for all replies




Winnie,

http://www.ato.gov.au/businesses/content.asp?doc=/content/21749.htm

If you are working a job and trading on the side (as opposed to trading full-time), any gains that you are making potentially add towards you MTR (Marginal Tax Rate). A simple strategy therefore is to have your trading activities inside a company structure to minimise your personal income to below top MTR levels.

You need to determine whether the expense and ongoing expenses involved in setting up a company, having the company audited yearly, etc etc is worth it depending upon the amount you are earning.

Cheers

Sir O


----------



## Grinder

*Re: Trading tax minimisation strategies*



WinnieBlues said:


> Hi everyone....i was wondering if people could share some ideas for minimising tax whilst share trading, besides the usual 50% cgt discount if held for longer than a year.
> 
> Set up a company for my share trading??? I suppose that setting up a trust would be out of the question as i have no dependents and am single.
> 
> Thanks in advance for all replies




WB, If you meet the ATOs requirements to be classified as a trader there are copious amounts of ways to minimize tax, all depends on how creative you want to get  I suggest combing through ASF threads as alot has been discussed on this topic.


----------



## nomore4s

*Re: Trading tax minimisation strategies*



WinnieBlues said:


> Hi everyone....i was wondering if people could share some ideas for minimising tax whilst share trading, besides the usual 50% cgt discount if held for longer than a year.
> 
> Set up a company for my share trading??? I suppose that setting up a trust would be out of the question as i have no dependents and am single.
> 
> Thanks in advance for all replies




WinnieBlues,

I have merged your thread with another one that was asking pretty much the same question.

You might want to read through it to get some ideas.


----------



## rock86

MS+Tradesim said:


> Insider,
> 
> 1) Stop being a resident of Australia for tax purposes by spending more than 50% of the f/year outside of the country.
> 2) Be resident in Vanuatu for more than 50% of the year
> 3) Establish trust and co. in Vanuatu
> 4) Trade ASX (or whatever)
> 5) Pay no income/CGT tax anywhere.
> 
> (Hint: read ATO site)




Legislation has changed, this option is no longer available. It is much more strict now. I think from memory you now have evidence of living in (and working) that country for a minimum of 2 years, eg. evidence is rental agreement etc. Read the ATO for more info. on the new legislation, offshore oil & gas workers earning a hefty income are the ones being targeted hear.


----------



## MITCH027

money tree said:


> "----------------------------------------INVESTMENT STRUCTURES----------------------------------------
> 
> Company
> 
> ... Where profits are withheld, this is a better option than an individual being taxed at 48.5%...
> 
> Advantages:
> 
> Can distribute income among shareholders
> 
> Disadvantages:
> 
> No discretion over distribution of profits




Just a quick question about this one - it says there that profits need to be withheld to keep the tax rate at 30%. So if I wanted to actually take profits from the "company", would I then just end up getting taxed at my marginal rate? In other words, the company is the "employer" and if it is paying me, the "employee", there is payroll tax implications and marginal tax rate issues?

OR are there "franking credits" here for any profit distribution? E.g. company gets taxed at 30%, my marginal rate is at 8%, so after profit taking, I still am taxed at 8%?

Sorry couldn't find anything on that (read the ATO website also), thanks


----------



## Krusty the Klown

As a shareholder of the company there is no payroll tax implications as profits from a company are distributed as dividends and not wages or salary.

When tax is paid by the company on profit before dividend, then you get a franking credit, which reduces your tax payable after your marginal tax is calculated because you have already paid it on the dividend if your marginal rate is under 30%.

It is never a cut and dried issue, but different for every individual depending on the individual circumstances.


----------



## MITCH027

Krusty the Klown said:


> As a shareholder of the company there is no payroll tax implications as profits from a company are distributed as dividends and not wages or salary.
> 
> When tax is paid by the company on profit before dividend, then you get a franking credit, which reduces your tax payable after your marginal tax is calculated because you have already paid it on the dividend if your marginal rate is under 30%.
> 
> It is never a cut and dried issue, but different for every individual depending on the individual circumstances.




In other words, trading through a company has very little benefit in terms of reducing tax payable if you actually intend on taking profits (at least in the short term)??

And it is definitely the case that you are a "shareholder" not an "employee" if you trade through a company??


----------



## Krusty the Klown

MITCH027 said:


> In other words, trading through a company has very little benefit in terms of reducing tax payable if you actually intend on taking profits (at least in the short term)??




If you are the only person involved that's correct.



> And it is definitely the case that you are a "shareholder" not an "employee" if you trade through a company??




You can be an employee if you want and pay yourself a salary or director's fees, but then you are just complicating things with extra admin and forms for the ATO etc..

If you are trading on your own it is easier and cheaper to trade as an individual.

The benefit of using a company structure is that you can retain profit inside the company and  get a greater compound return by paying less tax each year if you are on a higher marginal rate.


----------



## prozac

Whilst never keen to pay more tax than is necessary I firmly believe that if you're paying tax you know you must be making a profit.


----------



## noirua

MS+Tradesim said:


> Insider,
> 
> 1) Stop being a resident of Australia for tax purposes by spending more than 50% of the f/year outside of the country.
> 2) Be resident in Vanuatu for more than 50% of the year
> 3) Establish trust and co. in Vanuatu
> 4) Trade ASX (or whatever)
> 5) Pay no income/CGT tax anywhere.
> 
> (Hint: read ATO site)




Isn't The Republic of Venuatu a grey listed economy by the OECD?  They do generate revenue through Value Added Tax, stamp duty and numerous indirect taxes. Australia has circumvented the secrecy laws of Venuatu, note project Wickerby.
Australian tax authorities have a right to treat a person who has left Australia, for up to 2 years, as still being a resident for tax purposes if they feel the person intends to return to Australia.


----------



## Gerkin

MITCH027 said:


> In other words, trading through a company has very little benefit in terms of reducing tax payable if you actually intend on taking profits (at least in the short term)??
> 
> And it is definitely the case that you are a "shareholder" not an "employee" if you trade through a company??




Depends.

If you trade through a discretionary trust, and you have used all the individuals upto 30%, then you may distribute some to a company. The company then holds the funds.

This structure proves successfuly for many SME


----------



## Dowdy

If you invest you money in gold or silver bullion and sell it through 3rd party (ebay), would it be traceable?


----------



## Julia

Dowdy, why are you so anxious to avoid paying tax?  
How do you think our society would function if we all found ways to avoid it?

Have you ever considered that one day you may unexpectedly need to draw some government support, e.g. ill health, loss of job etc?   

I don't mean to necessarily be judgemental, but am interested in members' views about tax.

Yes, I know much of our taxpayer dollars are horribly wasted by governments, but I'm thinking more of the need to provide support and essential services.
Sorry, if this seems to be off topic.  Maybe it should be separate thread.


----------



## prozac

Dowdy said:


> If you invest you money in gold or silver bullion and sell it through 3rd party (ebay), would it be traceable?




Not until the taxman decides you are living beyond your means and takes a sticky inside your place of abode. He will ask you where you got the money for the DB9, the Linn deck, those lovely crystal wine glasses, all that Dom in the beer fridge, and he won't be happy unless you can account for all of it. If you can't he will assign a value to all items you own and work backwards to generate a plausible income which he will tax you on with penalties.

Pay some tax and be happy you are making money.


----------



## prozac

Oh I forgot to mention if you put the same amount of time and effort into making money as you do into avoiding tax on the lesser amount you actually make then chances are you will make much more money.


----------



## nunthewiser

Dowdy said:


> If you invest you money in gold or silver bullion and sell it through 3rd party (ebay), would it be traceable?




Transactions above $10,000 are automatically logged apparently .... 

Have to buy/sell smaller but more often.

Just something i heard down the pub as i am happy to pay any taxes i am LEGALLY obliged to


----------



## DB008

So, how did Kerry Packer manage to only pay $100 tax most years? When he was questioned my a senate inquiry, he said something along the lines of, "Why should l pay tax to a government that is just going to waste my money"

http://www.abc.net.au/7.30/content/2005/s1538560.htm

http://www.smh.com.au/news/business/like-father-like-son--james-packer-weaves-that-old-tax-magic/2007/08/22/1187462357171.html


----------



## Krusty the Klown

Most probably through the use of companies and deductions.

Retain profits inside a company structure.

What profits he did take as income, the tax can be reduced through deductions.

One simple way is to just buy some negative geared property. Not immediately profitable but works if you want to really reduce tax payable out of principle.


----------



## Dowdy

Julia said:


> Dowdy, why are you so anxious to avoid paying tax?




I pay tax, just curious that's all.




> How do you think our society would function if we all found ways to avoid it?




The private sector will take care of it. Sure the private sector sometimes runs a lousy job - only if it's a monopoly but if there is competition, it will always do a good job


----------



## Gerkin

Dowdy said:


> I pay tax, just curious that's all.
> 
> 
> 
> 
> The private sector will take care of it. Sure the private sector sometimes runs a lousy job - only if it's a monopoly but if there is competition, it will always do a good job




The private sector will take care of it but we will be left with a health system like America. Cost you a arm and a leg to see a doctor.


----------



## condog

Dowdy said:


> I pay tax, just curious that's all.
> The private sector will take care of it. Sure the private sector sometimes runs a lousy job - only if it's a monopoly but if there is competition, it will always do a good job




What like the US and European banks......

Im a private sector advocate for a lot of things but, the private sector still needs to be regulated / observed, and no they dont always do a better job...
They definitely do a more economically efficient job in most cases, but that is not always better....


----------



## condog

DB008 said:


> So, how did Kerry Packer manage to only pay $100 tax most years? When he was questioned my a senate inquiry, he said something along the lines of, "Why should l pay tax to a government that is just going to waste my money"
> 
> http://www.abc.net.au/7.30/content/2005/s1538560.htm
> 
> http://www.smh.com.au/news/business/like-father-like-son--james-packer-weaves-that-old-tax-magic/2007/08/22/1187462357171.html




Its easy for business 

Personal tax structure
 Gross income - income tax = disposable income

Business Structure
Income  - deductable expenses = taxable income
Just invest more in other assets and write them off as expenses = no tax payable.... Get your business to pay all your private expenses and you dont need any income... its that simple...


----------



## awg

Julia said:


> I don't mean to necessarily be judgemental, but am interested in members' views about tax.
> 
> Yes, I know much of our taxpayer dollars are horribly wasted by governments, but I'm thinking more of the need to provide support and essential services.
> Sorry, if this seems to be off topic.  Maybe it should be separate thread.





I view a reduced taxation rate as an increase in ROI, or even direct savings!

Therefore the best tax strategy is to invest in a SMSF pension phase, if possible, and pay personal tax 0-5% depending on age, no CGT.

Otherwise earn over $110,000pa in FF dividends, pay no income tax!

add some negative gearing on IP or 2..voila, pay minimal or no tax

Avoid indirect GST by buying private 2nd hand goods.

Negotiate to pay cash for services wherever possible, no receipt needed

On another note, I am not keen on pokies and fags, but must admit to be slightly pleased when I see those fools, subsidising my tax..let them pay for my services i say:

survival of the fittest in the tax world

note: there is legislative risk with all tax reduction strategy, also any investment should stack up on fundamentals imo, with tax enhancements the alpha only.


----------



## Julia

Dowdy said:


> I
> The private sector will take care of it. Sure the private sector sometimes runs a lousy job - only if it's a monopoly but if there is competition, it will always do a good job



I disagree that the private sector can appropriately run for-profit businesses where essential services are concerned.

Imo health and welfare should always be the territory of governments and should not be run on a for profit basis.


----------



## Ozymandias

This thread

https://www.aussiestockforums.com/forums/showthread.php?t=18340 "Home equity investment loan - hypothetical question"

may be of great interest to some readers of this one. You won't avoid tax altogether this way, but you could get a very nice deduction essentially for free, and it's perfectly legal.


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