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International Dividend Investors Living Abroad

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

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

At least it seems just reporting and don't actually sell them :)
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I need to do more reading, there was something about a 4 year window then after that you are locked into the deferral regardless, and on return you still dont get any discounting, the discounting is lost forever, i do remember reading that also losses dont count and cant be carried forward once you become a NTR.

They really want you to settle up i think, it will be a 10 to 12 K whack for me..nice chunk of money.
 
So_Cynical said:
I need to do more reading, there was something about a 4 year window then after that you are locked into the deferral regardless
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Thanks, yes I can't find the info on the ATO site.
Best to find it there but found other sites with info like this below. Case Study 1 is pretty clear:
http://www.alphacg.com.au/files/docs/case studies - cgt implications of a change in residency.pdf
So_Cynical said:
They really want you to settle up i think
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Yeah seems better to settle-up and move on, except if your shares drop (while in profit) following the changeover date then your out of pocket.
 
Ok all very interesting.

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

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

Choosing to disregard capital gains and capital losses when you cease being an Australian resident

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

If you ceased being a resident and make this choice, the assets are taken to be taxable Australian property until the earlier of:

a CGT event happening to the assets (for example, their sale or disposal), or
you again becoming an Australian resident.
The effect of making this choice is that the increase or decrease in value of the assets from the time you cease being a resident to the time of the next CGT event, or of you again becoming a resident, is also taken into account in working out your capital gains or capital losses on those assets. For information about when and how you make a choice, see Choices.[quote/]
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Yes interesting! :)

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

I saw when applying to one.

Two I have found so far (still looking) are Saxo and IB who are ok with non residents. I guess these being more international companies might be the difference but they both don't do Chess sponsorship either.
 
So_Cynical said:
True and this is a great advantage - something im also looking into is foreign sourced income from listed trusts, as a non Aust resident no tax is payable on foreign sourced income even if its paid to you via trust distributions (dividends) by an Australian based company...anyway that's how it looks so far. :)
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What specific investment trusts are you looking at?
And yes, based on the reading I have done you can certainly own publicly traded Australian securities as a NTR and pay no AU tax, there are a number of rules surrounding this however, no majority voting rights, must be under 40% ownership of outstanding shares, can't actually remember the limitations (there are a number of them for each entity type) but they all appeared targeted towards large institutional investors sorts.

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

Looks like my departure date could be pushed back until 2019, I'll update when I get some relevant info, thanks for the links, good reading there
 
Sir Burr said:
Two I have found so far (still looking) are Saxo and IB who are ok with non residents
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Can you link the IB page suggesting this? I've only spoken with the help line dude in HK, he says no residency, no account. Change of residency, close down au account and apply for new one in your new country... I don't believe it though
 
Rc366 said:
Can you link the IB page suggesting this? I've only spoken with the help line dude in HK, he says no residency, no account. Change of residency, close down au account and apply for new one in your new country... I don't believe it though
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Sorry, should not have written that. Someone told me they are ok but haven't confirmed it myself. IB are slow to reply.

The ones I've contacted...

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

I'm actually thinking of Commsec as I'd like Chess and what I'm doing is long term so the higher brokerage doesn't matter.
 
Sir Burr said:
I'm actually thinking of Commsec as I'd like Chess and what I'm doing is long term so the higher brokerage doesn't matter.
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Yes higher brokerage cost don't worry me either as I'm in for the long haul too, unnecessary monthly fees would be annoying (if commsec charges these)
CHESS would certainly be nice but the skeptic in me won't allow more than about 10% allocation to AU stocks anyway so that isn't enough to sway me.

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

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

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

Take my advice with a pinch of salt, I've only been at it for a few months. Let me know which broker you go with.
 
Rc366 said:
Can you link the IB page suggesting this? I've only spoken with the help line dude in HK, he says no residency, no account. Change of residency, close down au account and apply for new one in your new country... I don't believe it though
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Hi Rc366,

Just received a reply from IB:

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

I’ve continued to ask if it’s possible to go straight to opening an account in the “international entity” but bet you can’t. Will let you know.
 
Sir Burr said:
possible to go straight to opening an account in the “international entity”
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"Unfortunately this is not possible. For Australian residents, any new application will automatically default to the IB AU entity and this cannot be changed, as ASIC has mandated all Australian residents must be held under the Australian entity."

Rc366 said:
Change of residency, close down au account and apply for new one in your new country... I don't believe it though
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Damn, he was right!
 
Thanks for the motivation, Just got off with live chat help. Moving from AU the process was described as:

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

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

I asked about the 'international entity' too, the rep said it depends on location, most of EU falls under UK LLC, Singapore under US LLC, etc
 
Rc366 said:
No probs :)

I asked about the 'international entity' too, the rep said it depends on location, most of EU falls under UK LLC, Singapore under US LLC, etc
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Just thinking if you move to one of the other 'international entity', will have to follow the tax rules of whatever country your resident for tax.

I'm sure you could get away with keeping the Aussie IB if you didn't tell them though :)
 
True, you can keep IB AU but then you may be best off using your Australian TFN which (legally) locks you into paying income tax on your dividends/interest

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

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

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

I have decided to place my assets into an offshore trust, This costs a few grand a year but gives the immediate benefits of minimized WHT and no income tax and full asset protection, if setup properly.
 
So_Cynical said:
Philippines - Non-resident citizens and aliens, whether or not resident in the Philippines, are taxed only on income from sources within the Philippines.

http://taxsummaries.pwc.com/uk/taxs...ilippines-Individual-Taxes-on-personal-income
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Yes so no income tax for SRRV holders earning divs from international sources

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

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

I've done a fairly large turn around on my portfolios asset allocation and diversification. After attempting individual stock picking for 6 months, I'm now moving into a Peter Thornhill style approach and allocating at least 85% into the old LIC's. Just sitting back and riding the worlds highest yielding advanced economy index, at least until such time as the ATO's income tax nullifies the franking credits. At this time I will go NTR and diversify further. With this new strategy in mind, I'm no longer sure Interactive Brokers is the best choice considering they don't offer CHESS sponsorship.
@Sir Burr did you end up going with Commsec?
 
Rc366 said:
@Sir Burr did you end up going with Commsec?
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Hi Rc366,

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

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

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