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Go Matilda - Your Gateway to Australia The Go Matilda Forums The Go Matilda Forums The Tax and Money Forum High Interest Holding account with instant access
The Go Matilda Forums The Go Matilda Forums The Tax and Money Forum High Interest Holding account with instant access|
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Member |
Hi all, I wonder if one of you finance whizkids can help. We wil be moving to Melbourne in 5 months. House is currently on the market. I will have about £325,000 in sterling post sale of the house. Given that the exchange rate is around the 2.35 at the moment and the funds wil be available from September this year, when the rate is usually on a decline, I am thinking of just taking enough with me to Oz to last the first year, but keeping about £280k here in the UK.
I wondered if anyone could point me to 1. a high interest account with instant access TO THE WHOLE LOT at short notice so that I can choose the timing of exchanging when the £ is a little stronger than the AUS $, and 2. What the process would be of exchanging this at the right time via say HIFX or the Common Wealth Bank - Migrant banking account in the UK etc. (PS: we have a;ready set up the receiving bank account in Melbourne). Grateful for any assistance. Thanks |
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Junior Member |
Josh
In a similar situation myself, waiting til the rates improve before we transfer money. I can't say my research has been extensive and I'm not a finance whizkid, but based on a quick review of internet sites, First Direct are offering a good deal at present with their e-savings account. Its at a rate of 5.20% AER (5.08 gross) with instant access upto a balance of £500,000. You don't get any interest however for any months where you make a withdrawal. Applying is a relatively straigtforward web application, followed by the usual money laundering / identity checks for opening a new account these days. regards Andi. |
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Andi, thanks for your reply. I shall give First Direct a go.
Good luck. Josh |
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Junior Member |
Josh
You might like to check out "inTech" offering 6% on a 12 month fixed term. Also try website http://www.moneymanager.smh.co.au where you can compare all of the bank interest rates in Oz. |
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Member |
hi you might want to read the previous posts on this subject, as i understand if you do not want to pay tax on the growth difference, it has to go in an existing account opened before july 1 2003. lee.
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Member |
Have you seen this item from Go Matilda News:
http://www.gomatilda.com/news/article.cfm?articleid=327 ? Best regards. Alan Collett alan-at-gomatilda-dot-com Registered Migration Agent Number 0102534 Fellow of the Institute of Chartered Accountants in England and Wales Member of the Institute of Chartered Accountants in Australia http://www.gomatilda.com and http://www.collettandco.co.uk Offices in Southampton - England; Melbourne, Perth, Brisbane, and Geelong - Australia |
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Member |
Chances are you may be waiting a while as the Dollar is fairly strong at the moment, and will remain so for quite a while.
To avoid the new forex rules put the money in an account that does not offer everday transactions. To avoid CGT implications> transfer under $10,000 at a time. When you are over here of course you are in the Aus dollar economy - does a 0.25 increase in the exchange rate matter if you are staying? |
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Member |
Mark,
Unfortunately I don't think that either of the procedures you have mentioned are tax effective ... the reference to what are called "transactional bank accounts" only pertains to accounts which can be included in the A$250,000 exemption: http://www.ato.gov.au/large/content.asp?doc=/content/34043.htm Best regards.
Alan Collett alan-at-gomatilda-dot-com Registered Migration Agent Number 0102534 Fellow of the Institute of Chartered Accountants in England and Wales Member of the Institute of Chartered Accountants in Australia http://www.gomatilda.com and http://www.collettandco.co.uk Offices in Southampton - England; Melbourne, Perth, Brisbane, and Geelong - Australia |
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Member |
Alan – I’m not sure if you are trying to drum up additional work for yourself or just ignorant to Australian tax law!
A qualifying forex account is one that either has the primary purpose of facilitating transactions or is a credit card account. Further, forex losses of a private or domestic nature are only included if a gain or loss upon the realisation event would be recognised under the CGT provisions and it is: (a) a loss arising upon the discharge of a right acquired in return for the realisation of another kind of CGT asset; or (b) a loss arising upon the discharge of an obligation incurred to acquire a CGT asset. A bank account is a single asset, the one debt and chose in action and therefore a CGT asset – given. A forex realisation gain may therefore be included in assessable income even though the gain is of a private or domestic nature. However, the requirement that the gain would be taxable under the CGT provisions means that there must not be a CGT provision that specifically states that the gain is to be disregarded for CGT purposes. If, for example, a gain came within the personal use asset exemption it would not be taxable under the CGT provisions; and the private or domestic nature exclusion in sec 775 would mean that it would not be included in the taxpayer’s assessable income.
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Mark (or Doug),
Thank you for your observations. Maybe you can provide some references that support the comments you have made? Best regards.
Alan Collett alan-at-gomatilda-dot-com Registered Migration Agent Number 0102534 Fellow of the Institute of Chartered Accountants in England and Wales Member of the Institute of Chartered Accountants in Australia http://www.gomatilda.com and http://www.collettandco.co.uk Offices in Southampton - England; Melbourne, Perth, Brisbane, and Geelong - Australia |
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Member |
Mark/Dougie,
I have had another look at the forex legislation in the light of your observations and offer the following: 1. Section 775-15(2) of the ITAA 1997 reads as follows: 775-15(2) However, your assessable income does not include a forex realisation gain to the extent that it: (a) is a gain of a private or domestic nature; and (b) is not covered by an item of the table not shown here. 2. The table referred to at (b) says (I believe - agreed that this is difficult to interpret because there are lots of double negatives in the legislation here) that a forex gain is ignored if it relates to foreign currency or a right to receive foreign currency if it relates to a gain that would be taxed under the capital gains tax provisions. 3. The important thing to note here is that BOTH of the conditions must be satisfied. In other words in my view a gain on non A$ currency which derives from a "private or domestic" source is only NOT taxed under the forex provisions if it has already been taxed under the capital gains tax provisions. Happy to take on board further comments ... Best regards. Alan Collett alan-at-gomatilda-dot-com Registered Migration Agent Number 0102534 Fellow of the Institute of Chartered Accountants in England and Wales Member of the Institute of Chartered Accountants in Australia http://www.gomatilda.com and http://www.collettandco.co.uk Offices in Southampton - England; Melbourne, Perth, Brisbane, and Geelong - Australia |
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PS. I spoke with the ATO a couple of weeks ago regarding this issue, who confirmed my understanding. However, I think the time is right for something to be sought in writing ...
Alan Collett alan-at-gomatilda-dot-com Registered Migration Agent Number 0102534 Fellow of the Institute of Chartered Accountants in England and Wales Member of the Institute of Chartered Accountants in Australia http://www.gomatilda.com and http://www.collettandco.co.uk Offices in Southampton - England; Melbourne, Perth, Brisbane, and Geelong - Australia |
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Member |
I'm Mark.
Its in sec 775 - i'm not sure of the exact paragraph and I can't be arsed to look it up. Either the forex gain is exempt due to the private exemption, or it is made exempt from CGT due to the personal use asset exemption.
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Member |
Mark,
1. I have set out an extract from the forex provisions above. 2. Foreign currency is specifically noted as being a CGT asset (see the note beneath section 108-5(2) of the ITAA 1997). 3. My understanding is that the personal use asset exemptions (section 108-20(2)) restrict the availability of relief for the capital loss (where one occurs), or allow a taxpayer to disregard the gain where a personal use asset is acquired for $10k or less. Beyond this they don't mean you can disregard the gain. Either way, I am still of the view that unless a gain arising on the holding of non-A$ currency can be disregarded ( by - for example - preparing an election, eg if the total balances in respect of qualifying forex accounts are less than $250,000) a gain on disposal will represent assessable income of the taxpayer. Best regards.
Alan Collett alan-at-gomatilda-dot-com Registered Migration Agent Number 0102534 Fellow of the Institute of Chartered Accountants in England and Wales Member of the Institute of Chartered Accountants in Australia http://www.gomatilda.com and http://www.collettandco.co.uk Offices in Southampton - England; Melbourne, Perth, Brisbane, and Geelong - Australia |
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Member |
As you say Alan - we will have to agree to disagree.
I believe for the most part - the majority of taxpayers will be able to cliam the private exclusions without the need for an election. As a back-up it would most certainly be adviceable to make an election - and I believe this can be done when submitting the tax return. I will continue to research this matter until a definite answer is found.
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This election you are talking about you don't make to the tax office (I was under that illusion for a couple of years) you write out the declaration date and sign it and keep it with your copy of the tax return in case you get audited. I just didn't believe it when I was told but on checking the ATO web site it is correct. You don't have to submit anything to the tax office just keep a copy yourself. |
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Go Matilda - Your Gateway to Australia The Go Matilda Forums The Go Matilda Forums The Tax and Money Forum High Interest Holding account with instant access
The Go Matilda Forums The Go Matilda Forums The Tax and Money Forum High Interest Holding account with instant access© The Go Matilda Trading Company Limited 2002
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