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Tax Obligations

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  1. #11

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    an unpaid interest free loan is considered a financial benefit, and not just because you repay it in due course then you have fulfilled your obligation.. you have avoided paying interests for the tenor of the loan..


  2. #12

    The loan is interest free but adjusted for inflation. And regardless if i pay it now or in 50 years i will absolutely have fulfilled my obligation. Not up for debate.


  3. #13

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    Quote Originally Posted by Mystery87:
    Im just hoping someone can inform with any degree of certainty on whether her account in HK which is not associated with any foreign documents etc is "hidden" from overseas taxation offices.
    Nothing is "hidden" anymore. If the Australian govt asks for it, Hong Kong will gladly hand it over. If they dont ask, they will never find out.

    If she is not a citizen, nor filing taxes, nor under any investigation - there is no reason for them to ask.

    The level of risk of being found out is relatively low.

  4. #14

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    You have to actually buy the shares or property in your wife's name rather than yours, not only use her bank account, for you to be free of these assets and not subject to Australian taxation. But then I don't really see the point in this, since you are both now NOT tax residents of Aus and no need to pay tax, and in the future if you both move to Aus, then you will both become tax residents of Aus at the same time and would both need to pay. Regardless of whether you or your wife are Aussie citizens or not, you will both pay Aussie tax at the same time once you start living there.

    Now you don't need to pay any taxes on your HK income/investments. Lets say you buy a HK property for $10m today, if you move to Australia on Jan 1st next year, on Jan 1st your property is valued at $12m and you keep it, then on June 1st next year you sell the property for HK$15m, so in this case you would pay Aussie capital gains tax on $3m (from $12m to $15m). Whether in your name or your wife's, you still have to pay it.

    You can contemplate whether Australia would know and check whether either you or your wife sold a property in HK. How would they know? Thats a good question and maybe either of you could get away with selling it and not paying the tax. But the law is that you should pay it regardless of whose name it's in.

    Another thing you can look at is 'offshore portfolio bonds' which is not a bond at all but a 'tax wrapper' and Australia has some peculiar 10 year law, if you wrap up all your assets into one of these things and then a 10 year clock starts and after 10 years the asset is tax free. Or something like this, I am not too familiar with these wrappers and the down side is they have high fees.


  5. #15

    I am comfortable buying the assets in my wife's name and in regards to property this is actually better as there is less stamp duty for citizens.

    The contemplation part is the part i am interested in. Whether or not Australian tax authorites would know about when we sell our assests in HK. Of course this is a risk and illegal so I'm really trying to assess the level of risk i guess. 0% to 40% is a huge jump in tax to pay.

    I have never heard of offshore portfolio bonds before. I will have to look into them. Sounds like something rich people would use but there is a reason why rich people stay rich.


  6. #16

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    Quote Originally Posted by Mystery87:
    When signing up for a bank account here I gave my passport details and my HKID. As a result I believe the Australian Taxation Office (ATO) is able to see my Hong Kong bank account for data-matching.
    I don't think that things work this way. No foreign tax office has free access to the administration of any bank. The tax offices may ask a bank to hand over details about a certain account holder. Depending on the rules and laws how much information will be handed over may differ. And the rules may change in the future (you seem to be thinking about a long term solution).

  7. #17

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    I am aware of those kind of regulations. What I was trying to say is that it is the bank who makes information available to a foreign tax office. The foreign tax office does not have direct access to the bank's records.


  8. #18

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    Quote Originally Posted by Windmill65:
    I don't think that things work this way. No foreign tax office has free access to the administration of any bank. The tax offices may ask a bank to hand over details about a certain account holder. Depending on the rules and laws how much information will be handed over may differ. And the rules may change in the future (you seem to be thinking about a long term solution).
    The US use FATCA and will block financial institutions from access to the US financial market if they don't supply information. Hence the reason a lot of banks aren't keen on opening up accounts for US citizens. But the OP is Australia.

    A lot of jurisdictions have been using the Paradise papers and any other data that is coughed up, etc to go fishing for people that have been fiddling their taxes and hiding income.

    Australia currently has a discounted capital gains tax. You get a 50% discount on capital gains at your marginal rate. The penalty for evading tax is a lot higher than the top marginal rate of 47% (plus medicare, an any budget repair, drought, gun buy back or other special levies that are being enforced).

    You may get picked up on AML and income matching if you start streaming a foreign source of income back in Australia. Millions of dollars may pick up red flags. Your bank may ask you for the source of the funds, etc. At the top marginal rate, you are looking at about 25% tax on capital gains. Hold the asset for less than a year, then it's not a capital gain, but income. You could get a discount for principal place of residence, but I'm not sure if that's going to work for overseas assets.

    It seems like you are mixing evading tax by not declaring income and capital gains with delaying repayment of student debt. The reason why Australia has decent social welfare and can afford to give us deferred payments on education is that it expects beneficiaries to pay their tax. A lot of folks go off and never pay their student debts and leave it for others to pick up the bills.

    You could try to put assets into investment vehicles and declare dividends, return of capital, etc at a later point in time. But that ends up being pretty complicated with yearly compliance, gearing/loan ratio headaches, etc. Get a tax advisor to help you with that.

    https://www.ato.gov.au/individuals/i...ting-overseas/

    I don't think insurance bonds are going to be worthwhile, as you are being taxed at the corporate rate:
    https://www.moneysmart.gov.au/invest...nsurance-bonds

    But if you want to invest for your child or your own (future) education, you can use something like the Australian Scholarship group and get the 30% tax back if you use the money to pay for education expenses (and the definition is pretty loose).
    I am using the later for our son, as we want to send him to Australia for private school. They can legally defer and rebate taxes without issue and hiding assets...
    https://www.asg.com.au/products-services

    ymmv. Get good tax advice from somebody that knows their stuff (not me).
    shri likes this.

  9. #19

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    Original Post Deleted
    Maybe I'm nitpicking or my English is not up to par. I saw this sentence in the original post: "As a result I believe the Australian Taxation Office (ATO) is able to see my Hong Kong bank account for data-matching."
    This gave me the impression that the poster believes that tax offices have free access to all banks' administration. Like direct access to their computer systems and databases. This is of course not the case. Information is handed over on the bank's initiative. How much information is passed on and to whom depends on regulations.