I am moving to Oz in a few weeks and have a couple of mortgage endowments, which I was hoping to freeze, build up bonuses and let mature in about 8-9 years time.
I have just learnt however that any future bonuses will be taxed by the Australian goverment at 48.5%. Can this be so???

The only alternative seems to be to surrender them to the insurers for little more than the premiums I have paid out on them, as nobody seems interested in buying them off me.

Does this have to be done before you enter Australia or can you do it once over there??? I seem to remember reading somewhere that you have 6 months to sort things out before your liable for tax!

Hi Filbert

You are right- you have six months from entry to sort out your investments.
you are also right - you get taxed up to 48.5% on the yearly increase in value of your policies, paid yearly even if you can not get at the investment until it matures.
I think you need some professional advice - could save you money in the long term

Good luck

Peter

The 6 month window only applies to the transfer of a pension fund to Australia in the context of the application of section 27CAA.

There is no 6 month window for any other tax provisions, including capital gains tax or the Foreign Investment Fund Rules.

Best regards.

Alan Collett
alan-at-gomatilda-dot-com
Registered Migration Agent Number 0102534
and a Fellow of the Institute of Chartered Accountants in England and Wales
http://www.gomatilda.com and
http://www.collettandco.co.uk
Offices in Southampton, England; Perth, Australia; and Melbourne, Australia

Hi

how would the Aust. tax people know if you had an endowment policies if you didn't declare them?

Couldn't you just keep an account open in UK and not declare it in oz?

Is there any way they would find out?

just a thought.


sean

You're not suggesting carrying out an illegal act are you Sean?

In any event the tax authorities in the UK and Australia have ways and means of exchanging information if they so choose.

Best regards.

Alan Collett
alan-at-gomatilda-dot-com
Registered Migration Agent Number 0102534
and a Fellow of the Institute of Chartered Accountants in England and Wales
http://www.gomatilda.com and
http://www.collettandco.co.uk
Offices in Southampton, England; Perth, Australia; and Melbourne, Australia

Of course i would not suggest or condone an illegal act, but no one like to pay the taxman. There must be a legal way around this not uncommon problem because it does seem very un fair on the face of it.

Regarding the tax on annual bonuses, these are often quite low in consideration to the final payout, and ,as i understand it, the bulk of the final payment is made up of a terminal bonus, does this terminal bonus attract the same extortionate rate of tax as mentioned above by Filbert (48.5%)?

Also is the tax position the same if the endowment is fed from a feeder account, that is to say money left in the UK and not sent to the UK from Oz?

I appreciate that everyones finances and circumstances are unique to themselves, but there must be some general, i won't say advice, but information available on the more common aspects of average livelihood, ie pensions, frozen pensions, endowments, equities, tax and tax aviodance etc.

sean