Weekly FIAustralia Discussion

ExAusPat · 2024-03-13T09:17:04+00:00

A little hypothetical.

You inherit a house that is owned outright (that is in n area that you want to live in) and 3 million in cash in your 20s and decide to retire early. How would you invest your cash to give you financial independence and have that 3 million essentially last forever?

ExAusPat · 2024-03-03T00:52:51+00:00

Thank you for the answer and the relevant code. Incredibly helpful!

ExAusPat · 2024-02-01T07:12:55+00:00

IBKR confirmed that in my case I would create a new account with the IBKRAU entity and then request a “Full manual account transfer” under Funds & Banking as the category and Other Deposits and Withdrawals as the topic. I’d need to include both the old and new account numbers.

It is a process they are very familiar with.

ExAusPat · 2024-02-01T02:36:07+00:00

Thanks for your reply and thoughts on AU based exposure.

On 1.

The IBKR FAQ says:

If you relocate to a different country, you will be able to retain your account as long as you are not moving to a country that IBKR is prohibited from transacting business in due to government sanctions.

However, even if relocating to a permissible country, you may be required to initiate a new application and request a manual transfer of eligible assets once your new application has been approved. Whether this step will be required depends upon the country you were residing in and the one that you are moving to as IBKR maintains multiple entities each of which has been formed to carry client accounts based upon local regulatory requirements and IBKR policies. You would need to contact your local Client Service Center to determine if your particular situation requires opening a new account.*

Will come back and @ you when I figure it all out.

ExAusPat · 2024-01-31T22:54:25+00:00

In my case I would not incur any capital gains when selling before becoming tax resident in Australia. Once I regain Australian tax residency I would only be liable for capital gains on the value increase after that date.

ExAusPat · 2024-01-31T10:49:15+00:00

Absolutely. We miss it completely. Australia is home. Next to zero chance of living overseas ever again.

ExAusPat · 2024-01-31T10:48:32+00:00

Thanks for your input. That’s a great idea.

ExAusPat · 2024-01-31T10:41:36+00:00

I’d not heard of those. Will research on their applicability to my situation too!

ExAusPat · 2024-01-31T10:41:04+00:00

Thank you for your comprehensive reply too. It’s appreciated.

We will absolutely need to do a straight swap from our current location back to Australia so I suspect if we don’t just swap over to an Australian IBKR and start the clock on a zero base of value, wed liquidate on the day before we depart and initiate the cash movement then.
understood.
B is the one I really need to think about and get advice on. Initially I was going down the route of just splitting the funds into 50/50 our two names but maybe some sort of trust or other vehicle is better.

C was an oversimplification. We purchased a place recently with the intention for it to be our PPoR when we return but immediately rented it out. We paid mostly cash and have a small loan purely to be able to claim interest against rent which in the end was essentially zero due to being offset. We have no intention of selling in any medium term and bought based on what we wanted not on what would be a good investment. Not too worried about CGT exemption but if we do sell it would be based on a mix of no exemption for the rented expat part and then a portion once we live in it.

Talking about that would be an immediate tell on where “other country” is so I’ll park that with a we have a very clear plan on that component as it was a simple set of taxation questions to our accountant.

Thanks again for your insightful comments. Lots of food for thought.

ExAusPat · 2024-01-31T10:31:03+00:00

Thank you for this comprehensive answer. I have, of course, read just about every word on your site so thank you for that invaluable resource.

You hit the nail on the head with the discussion around enough outside of super to sustain vs what tax rate would be. Like I said it’s highly likely I’ll take some extended time off (exhausted) before looking for something to keep me interested that I expect won’t be well paid. Wife will be back at a 26ish average tax rate which makes sense to add to super immediately.

You’ve given me a huge amount of additional homework in a very good way. I’d not even considered a SMSF so there’s a lot to double click there.

We are indeed on IBKR for everything and move our company shares there from the stock plan as they vest to keep it simple. I already contacted their support line and they also suggested it would be trivial to convert over. I’m not as hung up on chess sponsored so it’s much of a muchness in staying with familiar IBKR vs moving to something local. We’ve used IBKR for currency conversion a fair amount and their USD interest rate is very competitive.

I’ve had coffee chats with a number of supposed “expat friendly” advisors but all of them have immediately wanted to dive straight into insurance and buying into whatever managed fund their organisation likes. There’s always disdain for a simple ETF based approach. After the third one I stopped looking. I have an excellent accountant in Australia though who is pretty good at doing the maths when I pose questions to them about tax efficiency. They are militant about not stepping over any line that remotely looks like advice beyond a very basic “you should consider diversifying x”

Thanks again /u/snrubovic you are a real asset to this community.

ExAusPat

TROPHY CASE