The last 3 years will have CGT, but I thought future years were CGT free.
I could be wrong, it's happened before
Dave
What to do with $325,000 ????
- Thread starter BoatBoy
- Start date
The last 3 years will have CGT, but I thought future years were CGT free.
I could be wrong, it's happened before
Dave
Passive Retirement Income Streams
Hi Dave,
How much time will you be in Australia each year?
What will your residency status be for tax purposes?
Have you considered an offshore structure for your future investments?
There may be far more and far better performing offshore funds available for you to select if you are appropriately structured, along with the potential tax benefits of an offshore structure.
If you haven't already got much experience in shares, I'm not so sure I would be investing directly. If you do, maybe consider following a model portfolio of a good shares newsletter, eg. Intelligent Investor, for simplicity and ease. There are also many, many overseas shares newsletters available - but picking the good one is the difficulty.
Managed funds and Listed Investment Companies (LIC's) are an option, but I think the most simple and easiest way to invest in shares is using index funds and exchange-traded funds (ETF's).
Again, offshore index funds/ETF's are much more diverse (not just investing in shares, but also property, commodities, and almost every permutation you can think of). There are literally only a handful of these funds available in Australia, but an enormous amount overseas.
As for residential property, in your situation, I probably wouldn't buy any more. Selling the PPOR and reducing investment debt and/or investing in funds seems reasonable.
Residential property isn't the best vehicle for income generation, and I would consider selling some or even all of these IP's off in a step down fashion to minimise CGT, and gradually investing more into a diversified fund portfolio with a higher yield.
Do you have a SMSF or other superannuation fund?
I think you can minimise the CGT consequences of selling IP's, by putting the sale proceeds into your super fund (not sure what your age is, so this is another factor to consider with respect to when you could access the funds).
Commercial property is better than residential property for yield, but investing directly requires a bit of work, so investing indirectly via funds is simpler and easier.
Basically, the idea I am suggesting here is to build up a portfolio of index funds/ETF's in an appropriate offshore structure, with a combination of yield and growth orientated funds, therefore inflation-hedged, with some degree of leverage that suits your personality/risk profile - that will achieve the $60,000 AUD p.a. that you require to fund your retirement lifestyle.
What do you think?
Whatever investment structure or investments you use to fund your retirement, I feel that they need to be simple and easy to understand and to manage, and also, be cheap to run and not require much time or effort on your part, ie. it needs to generate a passive income for you, so you can do whatever you want with your time. This is financial freedom!
...I doubt you will want to be rung about whinging tenants or hear about your fluctuating share prices while you are lying on a beach in Vietnam, or wherever you may be - and that's assuming you will even be contactable!
GSJ
ADD: Living off Equity (LOE) is in the too hard basket for me, but agree it is another option to consider.
Hi Dave,
How much time will you be in Australia each year?
What will your residency status be for tax purposes?
Have you considered an offshore structure for your future investments?
There may be far more and far better performing offshore funds available for you to select if you are appropriately structured, along with the potential tax benefits of an offshore structure.
If you haven't already got much experience in shares, I'm not so sure I would be investing directly. If you do, maybe consider following a model portfolio of a good shares newsletter, eg. Intelligent Investor, for simplicity and ease. There are also many, many overseas shares newsletters available - but picking the good one is the difficulty.
Managed funds and Listed Investment Companies (LIC's) are an option, but I think the most simple and easiest way to invest in shares is using index funds and exchange-traded funds (ETF's).
Again, offshore index funds/ETF's are much more diverse (not just investing in shares, but also property, commodities, and almost every permutation you can think of). There are literally only a handful of these funds available in Australia, but an enormous amount overseas.
As for residential property, in your situation, I probably wouldn't buy any more. Selling the PPOR and reducing investment debt and/or investing in funds seems reasonable.
Residential property isn't the best vehicle for income generation, and I would consider selling some or even all of these IP's off in a step down fashion to minimise CGT, and gradually investing more into a diversified fund portfolio with a higher yield.
Do you have a SMSF or other superannuation fund?
I think you can minimise the CGT consequences of selling IP's, by putting the sale proceeds into your super fund (not sure what your age is, so this is another factor to consider with respect to when you could access the funds).
Commercial property is better than residential property for yield, but investing directly requires a bit of work, so investing indirectly via funds is simpler and easier.
Basically, the idea I am suggesting here is to build up a portfolio of index funds/ETF's in an appropriate offshore structure, with a combination of yield and growth orientated funds, therefore inflation-hedged, with some degree of leverage that suits your personality/risk profile - that will achieve the $60,000 AUD p.a. that you require to fund your retirement lifestyle.
What do you think?
Whatever investment structure or investments you use to fund your retirement, I feel that they need to be simple and easy to understand and to manage, and also, be cheap to run and not require much time or effort on your part, ie. it needs to generate a passive income for you, so you can do whatever you want with your time. This is financial freedom!
...I doubt you will want to be rung about whinging tenants or hear about your fluctuating share prices while you are lying on a beach in Vietnam, or wherever you may be - and that's assuming you will even be contactable!
GSJ
ADD: Living off Equity (LOE) is in the too hard basket for me, but agree it is another option to consider.
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what about doing a bit of everything?
$325k is a lot of money. Use some to pay off IP's, use th equity to buy a couple more IP's to claim back the tax and for future capital growth but find ones with good yield and put some cash into ING for everyday living then put some in a couple of income managed funds with 50% margin lend.
You will have enough to live off for a year, have added even more properties to grow your portfolio and take advantage of tax, and balance your portfolio out with managed funds. The funds do prefer an estimated investment time frame of 3 to 5 yrs for good returns.
$325k is a lot of money. Use some to pay off IP's, use th equity to buy a couple more IP's to claim back the tax and for future capital growth but find ones with good yield and put some cash into ING for everyday living then put some in a couple of income managed funds with 50% margin lend.
You will have enough to live off for a year, have added even more properties to grow your portfolio and take advantage of tax, and balance your portfolio out with managed funds. The funds do prefer an estimated investment time frame of 3 to 5 yrs for good returns.
BoatBoy;311829 [B said:
Yes, you don't have to sell them all, keeping a few is not unreasonable. My point is that this 'goose' (residential property) is great for capital growth, but not the best for income.
BoatBoy said:
Just go to asx.com.au and search for it and you will find out very quickly, it's very simple and very easy to understand.
BoatBoy) said:
Sure, look at it seriously (there's a lot of LOE threads/posts to get through here and on invested), and if you find it simple and easy in all respects - go for it, but I really don't think it will get much simpler or easier than straight investing into index funds/ETF's, although, the offshore structuring bit would probably be more complex at the beginning.
You could always just declare everything for tax purposes but use the structure simply to get access to investments you wouldn't otherwise be able to as an Australian resident.
And of course, remember Glen Wheatley
! - be careful going offshore.Good luck with it.
GSJ
Not that hard, don't need to register to read this:
http://www.asx.com.au/investor/lmi/index.htm
GSJ
http://www.asx.com.au/investor/lmi/index.htm
GSJ
Thank's Keith, reading up and trying to digest everything at the moment.
Eye's are square and blood is running from the ear's, well almost.
Interesting to see this same thread has cracked the 100 reply barrier on the other forum with some great info from Michael Whyte.
http://www.invested.com.au/85/what-do-325k-16272-new/
Dave
Eye's are square and blood is running from the ear's, well almost.
Interesting to see this same thread has cracked the 100 reply barrier on the other forum with some great info from Michael Whyte.
http://www.invested.com.au/85/what-do-325k-16272-new/
Dave
For those that are intersted, the Accountant has looked through the concept's suggested by Michael Whyte, (thank's mate) and the conservative numbers and projection's from me and given it all the thumb's up
So as I type, Val's, LOC's, etc are being done, ready for the big adventure .
Some have asked ( via pm )for the spreadsheet's from InvestED to be posted over here, so here they be.
http://www.invested.com.au/31950-post63.html
Living on equity (Boatboy) .xls
And
http://www.invested.com.au/32401-post181.html
Strategy. for Boatboy by coopranosxls.xls
Hope this help's.
Dave
So as I type, Val's, LOC's, etc are being done, ready for the big adventure .
Some have asked ( via pm )for the spreadsheet's from InvestED to be posted over here, so here they be.
http://www.invested.com.au/31950-post63.html
Living on equity (Boatboy) .xls
And
http://www.invested.com.au/32401-post181.html
Strategy. for Boatboy by coopranosxls.xls
Hope this help's.
Dave
Tank yu tumas Dave!
Hi all,
Boatboy, how much are you considering as running expenses?
i.e. insurance, mooring, antifoul, engine/rig repairs, fuel etc.
Is your boat rego expensive? What about sailmail/satphone etc.
I ask because I am planning the same for 2010. I am still in the accumulation stage, no boat but several IPs and one large PPOR.
We go sailing on a cat once a year. Whitsundays. Last one was $4000 for a week.
I think you mentioned making one of the IPs a PPOR while you are away - great idea. The CGT exemption starts when ever you nominate it as your PPOR I think. So yes, a valuation required. We will be doing exactly that.
As for income, $60 grand sounds really good. Of course, depending how you do it, thats $60 grand gross or net. I haven't worked that one out yet, but selling the PPOR and just spending the cash while the other properties just tick away is very enticing.
We are in the process of getting into a bigger, more CG style PPOR. This will be sold in three years to buy the boat and provide just a couple of years income. So you are doing very well since your boat is allready in the bag.
Someone once said that sailing is like standing under a cold shower ripping up $50 notes.
I agree, but strangely enough, my family and I have never, ever had as much fun and adventure anywhere else yet.
Boatboy, how much are you considering as running expenses?
i.e. insurance, mooring, antifoul, engine/rig repairs, fuel etc.
Is your boat rego expensive? What about sailmail/satphone etc.
I ask because I am planning the same for 2010. I am still in the accumulation stage, no boat
but several IPs and one large PPOR.We go sailing on a cat once a year. Whitsundays. Last one was $4000 for a week.
I think you mentioned making one of the IPs a PPOR while you are away - great idea. The CGT exemption starts when ever you nominate it as your PPOR I think. So yes, a valuation required. We will be doing exactly that.
As for income, $60 grand sounds really good. Of course, depending how you do it, thats $60 grand gross or net. I haven't worked that one out yet, but selling the PPOR and just spending the cash while the other properties just tick away is very enticing.
We are in the process of getting into a bigger, more CG style PPOR. This will be sold in three years to buy the boat and provide just a couple of years income. So you are doing very well since your boat is allready in the bag.
Someone once said that sailing is like standing under a cold shower ripping up $50 notes.
I agree, but strangely enough, my family and I have never, ever had as much fun and adventure anywhere else yet.
Hi all,
Boatboy, how much are you considering as running expenses?
i.e. insurance, mooring, antifoul, engine/rig repairs, fuel etc.
Is your boat rego expensive? What about sailmail/satphone etc.
I ask because I am planning the same for 2010. I am still in the accumulation stage, no boat
I have gone into a bit of detail here.
http://www.somersoft.com/forums/showpost.php?p=310414&postcount=46
Based in Langkawi, being a duty free Island is cheap as chip's.
Repair yard at Satun , so I wouldnt be bothered doing an antifoul myself
http://www.pss-satun.com/
Marina berth rates in Oz plentiful on the internet but in Bris, if I could get one it would cost me about $250/week for a 15 metre cat.
Here, http://www.telagaharbour.com/overview.htm they quoted about $60/week for same boat.
I hate marina's, bit like caravan park's and would rather anchor out and swing to the breeze to stay cool for free.
No rig, building a powercat. Been hit by lightning before, and rig and sail's @ $60k will buy a lot of diesel at $.70c/litre on a boat that will use about 1 litre/NM. (85,714 Nautical Miles) thats 3.5 times around the world.
Info on my reasoning here http://www.cruisersforum.com/forums/45198-post3.html
Insurance will be about 1% of value on a good sailing cat, hopefully cheaper without a rig which is where the vast majority of claim's are made.
QLD Rego is about $400 yearly. Aust rego about $1500 one off.
Only need half of that in Malaysia
Someone once said that sailing is like standing under a cold shower ripping up $50 notes.
I agree, but strangely enough, my family and I have never, ever had as much fun and adventure anywhere else yet.
Funnily I've alway's found being land based cost's me much more than on the water, and have proved it to myself on many occasion's.
Dave
Hi Boatboy
Did your accountant mention to you that while you are a non-resident for taxation purposes you are taxed at 30% for every dollar you make in Australia? We have been advised this by our accountant.
Which option did you decide to do from Michael Whyte's 4 options? - we are in a similar situation to yours only we are coming back to Oz after being on boats for last 10 years and want to obtain a passive income from selling our PPOR overseas.
Which managed fund did you decide on?
Mon
Did your accountant mention to you that while you are a non-resident for taxation purposes you are taxed at 30% for every dollar you make in Australia? We have been advised this by our accountant.
Which option did you decide to do from Michael Whyte's 4 options? - we are in a similar situation to yours only we are coming back to Oz after being on boats for last 10 years and want to obtain a passive income from selling our PPOR overseas.
Which managed fund did you decide on?
Mon
I doubt you will be a resident of Australia. The tax office wont tell you,from my enquiries. Though it seems simple it can be very complex. The Ato web site is helpful but not precise in its answers.
DALEGG didn't want me as a client because of the complexities involved in non redidency!
My guess is your accountant is just giving you a standard rersponse
The only way you will get a definite answer is to put a precise scenario together for a private ruling.
Having said all that my guess is that spending a certtian number of days out of the country will make you a non resident !!!!!!!!!!
DALEGG didn't want me as a client because of the complexities involved in non redidency!
My guess is your accountant is just giving you a standard rersponse
The only way you will get a definite answer is to put a precise scenario together for a private ruling.
Having said all that my guess is that spending a certtian number of days out of the country will make you a non resident !!!!!!!!!!
Hi Redsquash
We have been residents of Australia but not for taxation purposes for the last 10 years so it's definitely possible! You file this with your accountant. The proviso being that whilst overseas if you earn any income in Australia eg: any positive cash flow, dividends etc will be taxed at .30c to the dollar (doesn't matter what you do overseas).
Mon
We have been residents of Australia but not for taxation purposes for the last 10 years so it's definitely possible! You file this with your accountant. The proviso being that whilst overseas if you earn any income in Australia eg: any positive cash flow, dividends etc will be taxed at .30c to the dollar (doesn't matter what you do overseas).
Mon
