Expat Chat Podcast

Working overseas an as Australian expat presents itself with a lot of opportunities, including career development, life experiences and potentially improving your financial wellbeing. However, one issue that must be managed is that you will most likely be earning most your income in a foreign currency rather than in Australian Dollars (AUD). When you leave Australian shores, more than likely you will still have financial obligations in Australia to maintain. In today's podcast we talk to Shaun Vanderkaap from WorldFirst about how to transfer currency without paying the big fees to the banks

G'day expats. Today we want to run through quite a lot of changes that are occurring with respect to Superannuation in Australia that comes into effect on the 1st of July. In Australia, everyone's aware of this, but I'm finding that a lot of people overseas are not aware of a lot of these changes coming through, so what we wanted to do today was put together a video and just run through some of the key changes that are occurring, and how they may affect expats. The first change is the introduction of a $1.6 million Transfer Balance Cap. The cap will be applied to both current retirees and to individuals yet to enter their retirement phase. This cap will be indexed in $100,000 increments in line with increases in the Consumer Price Index. The financial consequences for current retirees is that if they had more than $1.6 million in super in a pension phase, they will need to withdraw the excess balance, or revert the excess amount to accumulation phase, which is then subject to 15% earnings tax. And this must be done before the 1st of July 2017. Subsequent earnings on this pension balance from the 1st of July 2017 will not be required to be withdrawn. Note that the special rules apply to define benefit pensions. This measure is retrospective, because it applies to Australian super balances that have been accumulated in the past under the existing rules. This will obviously apply to both Australian expats and also Australian residents, and you need to go through and work out if this applies to you, please note that the 1.6 cap applies only per person, not per couple. The second major change is the cut in Annual Concessional before-tax contributions to $25,000. From the 1st of July 2017 the general concessional contributions cap will be lowered to 25,000 from 30,000 and for those over 50 from 35,000. This will affect expats who currently contribute to super by way of concessional contributions to offset any rental income in Australia and obviously claiming the tax deductions, so please be aware of these changes because if you do make a similar balance transfer next year, they will exceed the cap. The next change is the cut in the annual Non-Concessional contributions cap to $100,000 down from $180,000. Non-Concessional transfers are after-tax transfers. What this means is that from the 1st of July of 2017, you are no longer going to be able to transfer funds into your super fund as a Non-Concessional contributions under the previously arranged agreement of $180,000 per year. There's obviously a nice little window here for those under the age of 65, where if you are able to make a contribution using the bring forward rule, you can actually contribute up to $540,000 before 30th of June this year. Please note that you don't want to trip over the $1.6 million cap. The last one we want to talk about today was the expansion of the Tax Deductibles Super Contributions to all Australians. From the 1st of July 2017, all individuals under the age of 75 will be permitted to claim tax deductions for personal super contributions that is voluntary concessional contributions. As previously discussed, expats can honestly take advantage of this by way of offsetting or claiming a tax deduction for the concessional contributions against any rental income that may have earned on properties in Australia. That's a summary of some of the major changes that are occurring with respect to super and how they relate to Australian expats. Atlas Wealth Management is a specialist in providing financial planning to Australian expatriates. To find out more about Atlas Wealth Management and how we can help Australian expats please go to www.atlaswealth.com.au. Make sure you connect with us on our respective social media channels: Facebook: www.facebook.com/atlaswealthmgmt Twitter: www.twitter.com/atlaswealthmgmt Instagram: www.instagram.com/atlaswealthmgmt

G'day, expats. Last week we spoke about the complexities of determining whether you classify as a resident or non-resident for tax purposes. In this week's video, we wanted to run through how the applicable tax rates apply to those expats who qualify as a non-resident. First of all, let's look at the types of income that you have to declare on your Australian tax return when you're classified as a non-resident. They are Australian employment income, Australian rental income, Australian pensions and annuities, and capital gains that you may have accrued on Australian real property. This excludes shares and managed funds. You may also need to start lodging your tax return due to the newly implemented changes with respect to the HECS, HELP and TSL Debt regime that expats have to fall under. Now that we know what income you have to declare, how do the tax rates differ from a resident versus a non-resident? The first major difference is that non-residents are not eligible for the tax-free threshold. When you're an Australian resident, you can earn up to $18,000 and not pay any tax at all. Unfortunately, for non-residents the tax rate of 32.5 cents kicks in on the first dollar you earn and goes all the way up to $87,000 per year. Then for every dollar you earn over $87,000 per year, you pay 37% on the dollar up to $180,000 per year. Then over $180,000 per year, you pay 45 cents on the dollar. All Australian sourced interest, unfranked dividends and royalties derived after you cease to be Australian tax resident, submit to withholding tax provisions. Withholding tax rates are considered to be the final tax you'll pay on the income that is sourced and the actual provider of that revenue, will you directly remit that tax direct to the ATO. Specially, 10% of any credit interest earned on a bank account is deducted from that credit and paid directly to the ATO on your behalf. 15% of dividend income that is accrued through shares or managed funds where you reside in a country with a double taxation agreement is deducted from those dividends. If you reside in a country that doesn't have a double taxation agreement, then that rate jumps to 30%. Royalties are taxed up to 30% all depending on whether you reside in a country that has a double taxation agreement or not. This list is not definitive and certain exceptions do exist. If you do have investments or bank accounts, you do need to notify the financial institution or company of your non-residency status. If you don't do this and you don't declare your tax-full-number then it is possible that you may be taxed at rate of 45%. As withholding tax is deducted before receipt of that money, therefore this income does not need to disclose on an Australian tax return. Therefore, there is no benefit of negative gearing these types of assets because there are no claims to be made because the tax is taxed at source rather than after any of the deductions. Please note that there is no tax withheld on income that has attaching franking credits as the company has paid tax on your behalf. One last point that we would like to comment on is that when you're paying tax as a non-resident, you are not subject to the Medicare levy. Now that may be seen as a good thing, but we have heard of a case in the past where expats do come back to Australia and utilise those services and make claims on the Medicare service. Because you are not paying the Medicare levy, you are not entitled to that service. Atlas Wealth Management is a specialist in providing financial planning to Australian expatriates. To find out more about Atlas Wealth Management and how we can help Australian expats please go to www.atlaswealth.com.au. Make sure you connect with us on our respective social media channels: Facebook: www.facebook.com/atlaswealthmgmt Twitter: www.twitter.com/atlaswealthmgmt Instagram: www.instagram.com/atlaswealthmgmt

G'day expats. Today we wanted to talk about, probably one of the most debated topics when it comes to becoming an Aussie expat, is are you a resident or non-resident for tax purposes. The confusion surrounding this relates to a lot of misinformation on the web, combined with the ever moving goalposts that the ATO sets for those who are based overseas. There are a number of circumstances in which a Aussie expat may be considered either and no one single factor is decisive in making this determination and usually a lot are interrelated, which causes a lot confusion. One of the first tests is called the "resides test" and usually this is what most expats hang their hats on. However, the resides test is not conclusive in determining whether you're a resident or a non-resident based on the amount of time you spend in Australia. The ATO however has indicated that six months is usually a good rule of thumb, and it does not have to be continuous, as to whether you reside in Australia or outside of Australia. They key indicators are whether your behaviour matches that of an Australian resident or a non-Australian resident. An Australian may be considered a resident if their day to day behaviours matches that of an Australian resident, as opposed to the day to day behaviours of a non-resident. Factors that the ATO take into account as to whether you are a resident include your intentions or behaviours, family or business ties, maintenance or location of assets, and social or living arrangement. If the resides test cannot be met then one of the following tests may be considered to determine your tax residency. The first test is the "domicile test". A person will be classified as a tax resident if their domicile is in Australia, which is pretty fair enough. A domicile is considered by law to be a person's permanent residence or home. This test of residency is normally applicable for expats, when they do move overseas for a permanent period of time due to work. The ATO will take into account the following considerations when considering whether they have a permanent place of residence overseas. Intended or actual length of time overseas, existence of a home base overseas, existence of a family home in Australia, while overseas and family and ties in Australia and overseas. The weight of each factor will vary according to personal circumstances and no single factor will be decisive. The next test is the "183 day test". Under this test an individual will be classified as an Australian resident if they spend more than 183 days in Australia, in that financial year whether continuously or intermittently. The only time that the ATO will accept that this person is a non-resident, is if they can be satisfied that their usual place of abode is overseas. The last test is the "superannuation test". This test relates to Commonwealth Government employees and in order to qualify for this test the following conditions must be met. They must be a member of a superannuation scheme set up under the Superannuation Act 1990 and be classified as a eligible employee under the Superannuation Act 1976. If this test is met, then they are considered to be a resident for tax purposes and this includes their spouses, whether same sex or de facto. This also applies to their children all below the age of 16. Atlas Wealth Management is a specialist in providing financial planning to Australian expatriates. Whether you are based in Asia, the Middle East, Europe or the Americas. To find out more about Atlas Wealth Management and how we can help Australian expats please go to www.atlaswealth.com.au. Make sure you connect with us on our respective social media channels: Facebook: www.facebook.com/atlaswealthmgmt Twitter: www.twitter.com/atlaswealthmgmt Instagram: www.instagram.com/atlaswealthmgmt

When you're living and working overseas there are a number of financial risks but what is one of the largest - Currency Risk. Atlas Wealth Management is a specialist in providing financial planning to Australian expatriates. Whether you are based in Asia, the Middle East, Europe or the Americas, we have the experience in providing wealth management and planning services to the expatriate community. Atlas Wealth Management was born out of the demand from expats who wanted a financial adviser they could trust back in Australia to look after their investments whilst they went overseas to further their careers and life experiences. To find out more about Atlas Wealth Management and how we can help Australian expats please go to http://www.atlaswealth.com.au. Make sure you connect with us on our respective social media channels: Facebook: www.facebook.com/atlaswealthmgmt Twitter: www.twitter.com/atlaswealthmgmt Instagram: www.instagram.com/atlaswealthmgmt

Its an age old debate in Australia - what is better, property or shares? The debate is also pertinent for Australian expats too so we thought we list a couple of pro's and con's of why an Aussie expat would invest in shares or property. Atlas Wealth Management is a specialist in providing financial planning to Australian expatriates. Whether you are based in Asia, the Middle East, Europe or the Americas, we have the experience in providing wealth management and planning services to the expatriate community. Atlas Wealth Management was born out of the demand from expats who wanted a financial adviser they could trust back in Australia to look after their investments whilst they went overseas to further their careers and life experiences. To find out more about Atlas Wealth Management and how we can help Australian expats please go to http://www.atlaswealth.com.au. Make sure you connect with us on our respective social media channels: Facebook: www.facebook.com/atlaswealthmgmt Twitter: www.twitter.com/atlaswealthmgmt Instagram: www.instagram.com/atlaswealthmgmt

When it comes to obtaining expat financial advice how do Aussie expats choose an adviser? Atlas Wealth Management is a specialist in providing financial planning to Australian expatriates. Whether you are based in Asia, the Middle East, Europe or the Americas, we have the experience in providing wealth management and planning services to the expatriate community. Atlas Wealth Management was born out of the demand from expats who wanted a financial adviser they could trust back in Australia to look after their investments whilst they went overseas to further their careers and life experiences. To find out more about Atlas Wealth Management and how we can help Australian expats please go to http://www.atlaswealth.com.au. Make sure you connect with us on our respective social media channels: Facebook: www.facebook.com/atlaswealthmgmt Twitter: www.twitter.com/atlaswealthmgmt Instagram: www.instagram.com/atlaswealthmgmt