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Who is leaving HK, Anecdotal Evidence - Part 2

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  1. #931
    Quote Originally Posted by bdw:
    Due to Australian taxes, I am basically worse off financially than when I was living in HK. But I knew this and it was a sacrifice I was willing to make.

    But actually for the next few years I might not have to pay any Australian taxes if I sell my HK property at a value lower than its theoretical value as at 12th Jan 2020 (the day I left HK and became tax resident in Aus). I declared it was valued at $14m on this day. Now I think will sell for $12m or $13m. So I make a $1m-$2m paper loss which I can claim as a capital loss in Australia which I can just wipe off my Aussie income and keep rolling it over for a few years.
    So the lower HK property prices fall the better off you are?

  2. #932

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    Quote Originally Posted by traineeinvestor:
    So the lower HK property prices fall the better off you are?
    Well, I would not say better off. But kind of partially offset

  3. #933

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    Quote Originally Posted by bdw:
    Due to Australian taxes, I am basically worse off financially than when I was living in HK. But I knew this and it was a sacrifice I was willing to make.

    But actually for the next few years I might not have to pay any Australian taxes if I sell my HK property at a value lower than its theoretical value as at 12th Jan 2020 (the day I left HK and became tax resident in Aus). I declared it was valued at $14m on this day. Now I think will sell for $12m or $13m. So I make a $1m-$2m paper loss which I can claim as a capital loss in Australia which I can just wipe off my Aussie income and keep rolling it over for a few years.
    Can the capital loss be adjusted against ordinary income or only against capital gains? In many countries, you can't adjust a capital loss against ordinary income (including my home country).

    If you cannot adjust capital losses against ordinary income then you're not really better off. Because you have to pay capital gains tax on any gains made in Australia, so you adjust losses against those but in Hong Kong, if you made a capital gain, there was no tax anyway so there is no need to adjust losses against gains.
    Last edited by shree711; 10-01-2023 at 02:34 PM.

  4. #934

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    Quote Originally Posted by D.YU:
    I thought the purpose of message boards are to express yourself freely and not take things too serious.

    Enjoy the jerk circle. Im signing out of this trash site.
    Promises, promises.

    Can't remember where I originally read this, but if just about everyone else is being a dick to you... the real dick is probably in the mirror.

    You can't take the abraisiveness which you constantly dish out to others and, and hide behind terms like 'self expression' and 'circle jerk' when the real issue is your constant need to put others down causes them to do the same to yourself.

  5. #935

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    Quote Originally Posted by shree711:
    Can the capital loss be adjusted against ordinary income or only against capital gains? In many countries, you can't adjust a capital loss against ordinary income (including my home country).

    If you cannot adjust capital losses against ordinary income then you're not really better off. Because you have to pay capital gains tax on any gains made in Australia, so you adjust losses against those but in Hong Kong, if you made a capital gain, there was no tax anyway so there is no need to adjust losses against gains.
    Actually you might be right, I need to hire an accountant to figure it out

    But just to clarify, I will make a gain on my HK property, but on paper for tax purposes I will make a loss. This is because I bought my property in 2009 for HK$6m. But I became Australian tax resident in Jan 2020 and on this date the theoretical paper value of the property is HK$14m. So then if I sell it for $13m in 2023, I make a real gain of HK$7m in my pocket, but for Australian tax purposes I make a capital loss of $1m. The key point is that I moved to Aus on a date when the property value just happened to be high.

  6. #936

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    Quote Originally Posted by bdw:
    Actually you might be right, I need to hire an accountant to figure it out

    But just to clarify, I will make a gain on my HK property, but on paper for tax purposes I will make a loss. This is because I bought my property in 2009 for HK$6m. But I became Australian tax resident in Jan 2020 and on this date the theoretical paper value of the property is HK$14m. So then if I sell it for $13m in 2023, I make a real gain of HK$7m in my pocket, but for Australian tax purposes I make a capital loss of $1m. The key point is that I moved to Aus on a date when the property value just happened to be high.
    I tend to take tax matters quite seriously. I understand what you mean, your effective date of Australian acquisition is the price of the asset when you become an Australian tax resident. So that's the base value and then the sale value after that will be a gain or a loss on the base value. In this case, you say it is a loss.

    However, upon a cursory look at Australian laws and application of basic logic regarding the principle of capital gains and capital losses from other countries as well, it appears to me that a capital loss cannot be adjusted against ordinary income and therefore, you're not really benefitting here. The only good thing for you is that if you make Australian capital gains (from other real estate or shares), you can claim a capital loss against those gains. But those gains have to be made first and you could have made those gains in other places too. In the meantime, you will owe regular Australian taxes on your ordinary income which you would have paid less tax on in HK. Living standards might be better and expenses might be lower in Australia though but you did say that you're worse of financially in Australia after taxes.

    Just trying to make the situation clear here.
    bdw likes this.

  7. #937

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    Quote Originally Posted by shree711:
    I tend to take tax matters quite seriously. I understand what you mean, your effective date of Australian acquisition is the price of the asset when you become an Australian tax resident. So that's the base value and then the sale value after that will be a gain or a loss on the base value. In this case, you say it is a loss.

    However, upon a cursory look at Australian laws and application of basic logic regarding the principle of capital gains and capital losses from other countries as well, it appears to me that a capital loss cannot be adjusted against ordinary income and therefore, you're not really benefitting here. The only good thing for you is that if you make Australian capital gains (from other real estate or shares), you can claim a capital loss against those gains. But those gains have to be made first and you could have made those gains in other places too. In the meantime, you will owe regular Australian taxes on your ordinary income which you would have paid less tax on in HK. Living standards might be better and expenses might be lower in Australia though but you did say that you're worse of financially in Australia after taxes.

    Just trying to make the situation clear here.
    Oh overall is clear, I moved to Aus and I accept I pay higher taxes and take home less monthly than I did in HK because of this. But I have a higher standard of living, wife and kids are happier, the higher taxes I pay are returned to me in things such as free education, there are a million ways to reduce taxes here such as sacrificing into superannuation which will give me a better retirement, etc.
    muzzdang likes this.

  8. #938

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    Walked into Gateway Supermarket in Central to do some shopping for our kids and looks like they'll be "leaving HK" end of February. Anyone have some good recommendations on places to buy Lucky Charms and Pop Tarts?


  9. #939

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    Quote Originally Posted by NateM:
    Walked into Gateway Supermarket in Central to do some shopping for our kids and looks like they'll be "leaving HK" end of February. Anyone have some good recommendations on places to buy Lucky Charms and Pop Tarts?
    There is another US store in central in L/G Asia Standard Tower, maybe check there?
    NateM likes this.

  10. #940

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    Quote Originally Posted by bdw:
    My work is in HK and I live in a huge 4000+ sqft house in Australia. I also drive a BMW

    It is MUCH MUCH cheaper to fly from Australia to HK every month, 1 week of hotel accomodation in HK every month, than it is to have my whole family in HK and pay crazy prices for international school. My company used to pay HK$280,000/year for 2 kids international school in HK. Now I can just work from big house in Australia and if I travel to HK once a month the flight/accomodation maybe around $120,000k/year. My company agreed to this arrangement because it saves them shitloads and makes everyone happy and I still keep HK job.
    Mad jealous of you mate. I wish I could find such a flexible job like that. You must also rack up them Qantas Points!

    If I could find a job like that, I would also consider leaving haha. It's like getting the best of both worlds!
    muzzdang likes this.