Hi all,
Just wondering after you set up the LLC, get your finance and purchase your properties, how do you get the money back to Australia and what taxes do you pay both here and there on the money? Does this greatlt reduce the rental yields?
Thanks.
i'd be interested in an answer to this too.
My American Bank will charge me 1% of the transfer amount to wire it to my bank in australia. But i'm not sure of the associated tax implications on this money. There is an American tax guy in sydney who may be able to answer this. i'll try to ask him and post the answer.
Try ozforex. They charge only $15 for the transfer (and obviously theres a less favourable rate than the cross rate).
The income/losses from overseas are assessable the same way as oz property income. Your overseas income is assessable in oz when derived (ie when you receive the rental income). ie you need to include the loss or income in your oz ITR in the year it is earned. You cant just wait until your ready to bring it back. You also need to do a US tax return each year. CGT upon disposal will be charged like it is over here – eg 50% discount when held greater than 12 mths etc. Theres a link and detail in one of my earlier posts about the rules around the exhange rate that you use to convert it to AUD. The ATO is strict on this. While it seems that by having to do a return in oz and the US you are getting taxed twice, you would receive a foreign tax credit on your oz return for any tax paid in the US.
No effect on the yields other than potential currency losses. The major effect on the yield is interest. We cant borrow at the same bargin rates that Americans can unfortunately. fyi I borrowed at 7% using vendor financing over there.
Cheers
JoshThe most competitive forex rates from a trustworthy company will come from Oanda http://www.oanda.com
Similar to what ambosh said, my tax guy's answer was similar, albeit slightly more simplistic. unfortunately he didn't answer my question according to my (dual) US citizenship status. anyway…
If you are not a US resident, green card holder, or US citizen you will only pay tax on the income sourced from the US.
If you are an Aus resident you will also be taxed on the US income (taxed on world wide income) but allowed a foreign tax credit for any tax paid the US.
My understanding is that you can transfer the $$ back to AU at anytime.
Another way to get money back to Australia is to set up a US acccount with a ATM card – then just withdraw the money from an ATM here. Charges will vary from bank to bank but maybe around $5.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Fin freedom, Whether you have dual residency is not relevant to the ato. You’re either an Oz tax resident or not only in accordance with the Australian tax 4 residency rules (right of abode, 183 day test etc). You really have to prove that you are a non resident rather than the other way around. Does that help? Sorry If I’ve confused the issue more.
I would say keep it simple. Complete a US tax return for your USA activities and an Australian return for your Oz activities and keep the two separate. With the depreciation, deductions and business expenses for the LLC you shouldn't pay any tax in the US anyway.
With regards to getting cash back from the US, I would avoid the ATM card as the charges will work out high. Use a wire transfer or foreign exchange broker.
RichardI was going to ignore the newest "ryan" (sorry mate
) but since there doesnt seem to be forum moderation with regards to spammers, its up to the community (or me anyway hehe) to point it outFirstly if you are going to promote your business on this site, we dont really object. I cant speak for the owners of the site of course, but "we" dont really object.
For myself though, and i know certain others agree, what we DO object to is mindless posts that are made merely to get your name in a thread with out any real value adding.
If you are going to post, please actually ADD some value to the thread and dont post in 15 threads at once just to show us the depth (or lack of) your knowledge. We know you are a spammer and will hate you for it
(and yes the above post is superfluous in the extreme, adds no value and merely restates inaccurately the actual requirements of the tax treaties between the two countries!)
Richard, I have to point out that you cant exclude your us income from your oz tax return. As an aust resident for tax purposes, you must declare it. Although you can claim a credit for any tax you've paid, not declaring the income in your oz tax return is illegal.
exactly
Hi Chris
I'm sorry I have offended you. I am not intending to spam. I have recently found this website and am just commenting on the threads. If people wish to click on my link then I am giving them the option, if not then they don't.
I am not an expert on Australian tax law and wll leave it to you.
RichardRichard
It might have just been the way you posted (alot of responses in a short period of time) that caused offence.In any event I personally like the quality of your website, fee structure, areas to invest in and overall strategy. I also like the way you hand out free advice to people on your site without even requiring them to sign up with you – this is why i emailed you for more info! Alot of the other operators of US property agencies could learn alot from you.
Keep up the good work.
Josh
Thank you Josh. I really didn't mean to spam. I think this is a great overseas investing forum.
Richard
) but since there doesnt seem to be forum moderation with regards to spammers, its up to the community (or me anyway hehe) to point it outYou must be logged in to reply to this topic. If you don't have an account, you can register here.
