Tax-Free Savings Plans for Australian Expats
The "Tax-Free Savings Plans for Australian Expats" brochure provides guidance for Australian expatriates on how to maximize tax savings through offshore investment bonds and investment-linked life policy wrappers. The guide is particularly useful for returning Australians or those planning to move to Australia, offering strategies to maintain tax efficiency.
Key points include:
Tax Savings Through Offshore Investment: The brochure explains that Australian expats can set up offshore investment bonds while working abroad and continue them for at least 10 years, even after returning to Australia, to maximize tax benefits. If the policy is held for this period, any gains made on surrender or maturity are disregarded for tax purposes, provided the beneficiary is the original policyholder or received the policy without consideration.
Tax Implications on Surrender: Mark Tucker details the tax treatment of gains from these policies, which are assessed based on the duration of the policy. Gains are fully taxable within the first eight years, partially taxable in the ninth and tenth years, and fully tax-free after ten years, according to Section 26AH (6) ITAA 1936.
Importance of Professional Advice: The guide emphasizes the importance of obtaining professional financial advice when making such significant decisions. Proper advice ensures that all options and potential outcomes are considered, helping expatriates to make informed choices.
Overall, the brochure serves as a concise guide for Australian expatriates, offering insights on how to secure tax-efficient savings through strategic offshore investments.
