hi
what happens with an endowement policy (savings) when we move to oz, can we keep going with it? as in direct debit the money from oz?
is it still a tax free pay out? im confused as we will be perm resident in oz for taxation purposes?

any ideas
amanda

Hi Amanda76,
I would suggest speaking to an inpedenant finacial advisor, these are available on any good highstreet, but are not all good so beware.
Ensure that you advise them that you are not looking to buy!!! but are looking for advice on how to manage your money from abroad, it may be that you cannot hold this type of policy whilst living abroad (some investments will not allow this). however if you cash it in you could be hit on the early redemption clauses and again on the exchange to aussie dollars.
looking at the size of the emdownment could give some idea of the best option, what appears to be a small amount in the UK could buy you double the stuff in OZ (even after the fees etc).
I am not an advisor and please don't act on this information seek out advice from someone registered with the FSA.
If you dont like what they say or they try to sell you something you don't really want, speak to someone else.

I hope that this helps

All the best

Endowement policies are bad news in Oz as they are not tax free.

In fact any growth in the policy value above what you have paid in is taxed as income each year ( even if you have recieved no income from it).

This only applies if the endowment is greater than $50,000. If less than $50,000 the gain is taxed when you cash it in.

Also you cannot have multiple endowements all less than $50,000 as the total of this investment class must be less than $50,000.

Just to clarify that the Foreign Investment Fund Rules "small investor exemption" which you have mentioned applies to the total value of the taxpayer's and his/her "associates" "foreign investment funds", plus the value of Australian public unit trusts.

Best regards.

quote:

Originally posted by Kiwipaul:
Endowement policies are bad news in Oz as they are not tax free.

In fact any growth in the policy value above what you have paid in is taxed as income each year ( even if you have recieved no income from it).

This only applies if the endowment is greater than $50,000. If less than $50,000 the gain is taxed when you cash it in.

Also you cannot have multiple endowements all less than $50,000 as the total of this investment class must be less than $50,000.