House prices to keep rising for years

[theasxgorilla]

Mr Gorilla - pray, tell me how you avoid CGT when selling property & Shares.

I'd like to know how to avoid this tax as well, as I'm sure would many others.

Spill the Kool Aid quickly as the end of year will soon be upon us.

Foreign residents and foreign resident entities are exempt from paying Australian CGT.

 

[CAFA1234]

Foreign residents and foreign resident entities are exempt from paying Australian CGT.

ATO web site
The Government announced changes to capital gains tax for foreign residents in the 2005–06 Budget.

The following changes were introduced into Parliament in June 2006 and received Royal Assent on 12 December 2006. The changes are:

* aligning Australia’s law more closely with OECD practice through narrowing the range of assets on which a foreign resident is subject to Australian CGT to real property, and the business assets of Australian branches of a foreign resident, and
* protecting the integrity of the current tax rules by applying CGT to non-portfolio interests in interposed entities (including foreign interposed entities), where the value of such an interest is more than 50% attributable to Australian real property.
-------------------------------

Is this out of date?

 

[pepperoni]

8% gross return: take out 46.5% tax on earnings leaves you with 4.28% return.
Underlying inflation ~ 4.1%. Real rate of return 0.18% before deflation of underlying cash security is taken into account.

Not my choice of investment, but each to their own.

What are we comparing real net cash return vs all others as gross and nominal????

You do realise all investments are taxed right?

This is the sort of thinking that s making cash returns so high now.

Cash will win in all but the flukeiest cases right now ie

shares or property less than 0% gross return: take out tax on earnings (oh noes I earnt nothing) leaves you with less than 0% return.
Underlying inflation ~ 4.1%. blah blah blah

 

[pepperoni]

Foreign residents and foreign resident entities are exempt from paying Australian CGT.

Good luck qualifying for it!!!

Rich people maximise net returns ... property nuts risk the enitre return to save a few tax dollars??? To each their own.

 

[pepperoni]

Anyone else foolish enough to scoff at cash should remember that year-to-date, the ASX200, is down about 9%. And it only rose about 12% in 2007.

Not a very good year. Not even good over 2 years.

Do the after tax return vs inflation math on that one

 

[Tysonboss1]

What are we comparing real net cash return vs all others as gross and nominal????

You do realise all investments are taxed right?

yes but 100% of the return on cash is taxed every year,...

where as the capital gain in shares and property is compounded every year until it is finally sold possiblly 15 or 20years later,... it then receives a 50% discount so only half of this compunded growth gain is taxed at what ever your marginal tax rate is,....

you can benefit further by timing the sale for a year when you have low income such as when you have retired,...

 

[Tysonboss1]

Anyone else foolish enough to scoff at cash should remember that year-to-date, the ASX200, is down about 9%. And it only rose about 12% in 2007.

Not a very good year. Not even good over 2 years.

Do the after tax return vs inflation math on that one

another way to look at it would be that it is the best time to start investing in the stock market,... I certainly wouldn't be sitting on piles of cash at the moment.

If you had a crystal ball back in august then I would aggree to sell all shares and put funds in cash,.... but with the share market already so low, I would do the opposite and start turning cash back into assets,...

 

[nioka]

Anyone else foolish enough to scoff at cash should remember that year-to-date, the ASX200, is down about 9%. And it only rose about 12% in 2007.

Not a very good year. Not even good over 2 years.

Do the after tax return vs inflation math on that one

If what you say is correct why am I spending the day trying to work out a tax minimising strategy as the end of the financial year approaches. I have calculated that so far this year I have made a profit of $72,500 per $100,000 invested in the stock market. What would that have given me in cash deposits. I keep $20,000 in a cash deposit which has earnt 7.5% and inflation has taken half of that at least.

 

[CAFA1234]

If what you say is correct why am I spending the day trying to work out a tax minimising strategy as the end of the financial year approaches. I have calculated that so far this year I have made a profit of $72,500 per $100,000 invested in the stock market. What would that have given me in cash deposits. I keep $20,000 in a cash deposit which has earnt 7.5% and inflation has taken half of that at least.

Nioka, if you are serious about making 72.5% return on 6 figure sums then please, we need to speak. I need a mentor - you are doing far better than me over the past year. Like about 5/7 times better.

 

[pepperoni]

If what you say is correct why am I spending the day trying to work out a tax minimising strategy as the end of the financial year approaches. I have calculated that so far this year I have made a profit of $72,500 per $100,000 invested in the stock market. What would that have given me in cash deposits. I keep $20,000 in a cash deposit which has earnt 7.5% and inflation has taken half of that at least.

What I have said about the asx is a verifyable fact ... unlike your crazy claim.

Even if you did make such a return, you would be unlikely to be able to repeat it such that you make above market returns. Also a fact.

If you could you would have investment banks and super funds lining up to pay you 7 or 8 figures, and would be so gifted as to be ignored in any such discussion of investment decisions as an anomoly.

As for tax minimisation, I cant say your choice of shares as being the way to go ... and Im not sure you would have any tax problem this financial year if you were telling the truth ... unless you have already cashed out your 70% return which makes the whole thing even more outlandish.

 

[pepperoni]

another way to look at it would be that it is the best time to start investing in the stock market,... I certainly wouldn't be sitting on piles of cash at the moment.

If you had a crystal ball back in august then I would aggree to sell all shares and put funds in cash,.... but with the share market already so low, I would do the opposite and start turning cash back into assets,...

.... unless you agree with the Buffets and analysts that the correction has some way to go. Too risky out there for mere mortals like us.

I think that in investment slow and steady wins the race. Also good for quality of life.

 

[pepperoni]

yes but 100% of the return on cash is taxed every year,...

where as the capital gain in shares and property is compounded every year until it is finally sold possiblly 15 or 20years later,... it then receives a 50% discount so only half of this compunded growth gain is taxed at what ever your marginal tax rate is,....

you can benefit further by timing the sale for a year when you have low income such as when you have retired,...

... provided you are happy to be locked in for years to minimise tax as opposed to being ready to move when opportunities present.

I agree with what you say for lazy money and have 60k doing just that ... but Im keeping 1.9m virtually at call for property/share bargains.

EG Ive while Ive been earning 8% Ive watched these good properties fall from 2.2m towards mid ones in a few months

http://www.realestate.com.au/cgi-bi...er=&cc=&c=9854180&s=nsw&snf=rbs&tm=1211431405

http://www.realestate.com.au/cgi-bi...er=&cc=&c=9854180&s=nsw&snf=rbs&tm=1211431405

There are usually huge profits in simple DEVELOPMENTS ... never really in simple mugs property negative gearing.

To each their own ... but this is working for me starting from scratch 10 years ago.

 

[nioka]

What I have said about the asx is a verifyable fact ... unlike your crazy claim.

Even if you did make such a return, you would be unlikely to be able to repeat it such that you make above market returns. Also a fact.

If you could you would have investment banks and super funds lining up to pay you 7 or 8 figures, and would be so gifted as to be ignored in any such discussion of investment decisions as an anomoly.

As for tax minimisation, I cant say your choice of shares as being the way to go ... and Im not sure you would have any tax problem this financial year if you were telling the truth ... unless you have already cashed out your 70% return which makes the whole thing even more outlandish.

Check my posts over the last year. LYC, AGM, AOE, ADI, MCR, FNT, for a start. The volatility this year has been the best thing that has happened all year. I couldn't give a !!!//// as to whether you believe me or not.

 

[nioka]

Nioka, if you are serious about making 72.5% return on 6 figure sums then please, we need to speak. I need a mentor - you are doing far better than me over the past year. Like about 5/7 times better.

It has all been in my posts. However I'm not always right so DYOR.

 

[pepperoni]

Check my posts over the last year. LYC, AGM, AOE, ADI, MCR, FNT, for a start. The volatility this year has been the best thing that has happened all year. I couldn't give a !!!//// as to whether you believe me or not.

Lies luck or a freakish gift ... Im not assuming any of them but the market is down and just because a few people might have made money deosnt mean everyone should dive into shares.

Super funds are mostly in red so if you did regularly it you should be running one.

 

[nioka]

Lies luck or a freakish gift ... Im not assuming any of them but the market is down and just because a few people might have made money deosnt mean everyone should dive into shares.

Super funds are mostly in red so if you did regularly it you should be running one.

It is because others are in the red that I have done well. If it was not for the lemming factor causing people to sell at low prices or not recognising emerging producers I would have probably only made a modest return. For every loser there is a winner. By using an edecated guess you are right more than 70% of the time. It is not lies, luck or a freakish gift in any manner of form. Just research and making good use of information available to all and often found on ASF. By the way I have researched over 25 companies today and invested in one. All have had a mention on ASF this week.

 

[theasxgorilla]

Good luck qualifying for it!!!

Rich people maximise net returns ... property nuts risk the enitre return to save a few tax dollars??? To each their own.

Pepperoni, I don't know what you are talking about. Have you read that document?

Practically every item is a standard activity that most people do when they move overseas. It's absolutely not difficult to qualify for this tax status when you genuinely reside in another country.

I would say that Rich People have money. How they get/got it and what they do with it are the variables. You are right, each to their own.

 

[Tysonboss1]

... provided you are happy to be locked in for years to minimise tax as opposed to being ready to move when opportunities present.

.

I never invest simply to minimise tax,... the tax benefits are just a side benefit.

Money invested in a well managed leveraged portfolio that combines Property, shares and businesses with financel structures that allow equity to move across the portfoilio to where the best opportunties are i not lazy money.

 

[Macquack]

Pepperoni, I don't know what you are talking about. Have you read that document?

Practically every item is a standard activity that most people do when they move overseas. It's absolutely not difficult to qualify for this tax status when you genuinely reside in another country.

I hope you are not just "using" Annika for your own financial gain?

 

[ColB]

Hey CAFA,

[Quote:] "...Nioka, if you are serious about making 72.5% return on 6 figure sums then please, we need to speak. I need a mentor - you are doing far better than me over the past year. Like about 5/7 times better..." [Unquote]

I think Pepperoni needs a mentor more than you. I don't doubt his ability to amass a good property portfolio but to suggest that money is currently much safer in the bank is ludicrous. Whilst I can't boast Nioka's 'Magnificent' returns I as an inexperienced market investor have returned in excess of 20% on money invested on the stock market since the 19/2/08.