Help with non tax payer

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From: Melvina Jacobs


G'day,

I work on a ship for 300 days out of the year and I am officially a non-Australian resident.

I do not pay tax, rent, travel expenses or any other expenses other than a few beers here and there.

As most of the techniques that people advocate are designed to minimise tax - where does that leave me. Should I be investing in a Principle Interest loan and pay them off super fast or should I have an interest only loan and have twice as many properties? I would love some advice.

Mel
 
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Reply: 1
From: Anony Mouse


I am not a tax accountant, but from what I understand, you will be taxed on Australian income you receive in Australia, which you could offset when you paid tax in another jurisdiction. As this does appear to be the case you will have to pay tax at Australian rates, but as you would only pay on rental income this tax would be low, and would not give you the negative gearing benefits that a higher incomed Aust resident could claim.
Your options then
1. get an interest only and wipe out your tax liability, and hope for capital gains or
2 get a PI loan and pay off the property, and be subject to some tax when the interest component becomes less than income from rent.

"A government that robs Peter to pay Paul can always count on the support of Paul."
Of course, Paul's support is obvious, but it is equally obvious that to rob from Peter to pay Paul will make Peter
very, very angry.
My question is this: "How can you run a good government with a sore Peter?"
 
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Help for Permanent Traveller

Reply: 2
From: Michael Croft


Hi Mel,

Fantastic situation you have vis a vis investment potential as a permanent traveller (PT). You'll be pleased to know an entire industry and support network exists for you, you just have to know where to look. I am seriously investigating this lifestyle myself but it must wait until I am an empty nester ;^)

you can safely ignore most of the accounting advice you will receive here in Oz. Yours is a request for specialist info which 98% of accountants just aren't set up for. That said however, Lance Spicer is a good starting point for you. He spent time working for Bond then chasing Skase's money trail and learnt heaps in the process. Yes his books are expensive but they will save you a heap of preliminary investigations and time. I think his site is at www.tridentpress.com.au and worth a look for the off shore investing, tax implications and PT stuff.

Again great potential and half your luck!

Michael Croft
"The best parachute folders are those who jump themselves."
 
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Help for Permanent Traveller

Reply: 2.1
From: B F


As an expat with my only Aussie income coming from property, I try to stay cash flow positive with a negative taxable income.
That worked in the past but has become very difficult with current interest rates, as properties are now positively geared from day 1, no complaints of course.

I am also interested to hear what others with income from property only are doing at the moment.
 
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Help for Permanent Traveller

Reply: 2.1.1
From: Melvina Jacobs


Thank you all for your help,

At present I have two investment properties so that I can ensure a negative tax bill at the end of the year.

I can claim the collection of negatives (if) I come home to Australia against my income.

Off shore banking is a great idea but can usually be done only with large deposits (usually US$100,000). A lot can be done with the borrowing power of Real Estate before I will have a spare US$100,000 to invest.

Thank you all for your help. Keep the suggestions rolling in.

Mel.
 
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Help for Permanent Traveller

Reply: 2.1.1.1
From: Jeremy Laws


The min $100k is absolute rubbish. A friend of mine not only set up an offshore acct with no money, he also got a credit card issued as well. From this (when he tried it) he borrowed $10kUSD from said account. That facility has since been withdrawn as he was a little tardy with his repayments:) It is not impossible at all. Lance Spicer has some serious shortcomings, namely if you ever do reside anywhere you will be lying on your tax return to maintain your PT enhanced financial status. There are ways to get around that, but it is expensive. Fun games you can play, the risks and rewards can both be huge!
 
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Help for Permanent Traveller

Reply: 2.1.1.1.1
From: Michael Croft


Hi,

Lance Spicer does have some/many short comings; it is still a good starting point for those in the dark.

$10,000 US will set you up with an offshore account and some benefits. Dual citizenship is a greater advantage and gets around the 'tax cheat' label. Never thought I would see the day to be great full for the British part of my ancestry ;^)

Michael Croft
"The best parachute folders are those who jump themselves."
 
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Help for Permanent Traveller

Reply: 2.1.1.1.1.1
From: Jeremy Laws


You don't need 10k either.
 
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Help for Permanent Traveller

Reply: 2.1.1.1.1.1.1
From: Michael Croft


No you don't, particularly if you already have assets offshore. The $10k US includes incorporating an OS company and having foreign nationals as nominees if you get my drift.

Michael Croft
 
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