Expat worried about tax as non-resident on investments

Hi,
I am a self funded retiree. I was medically retired in my 40's and received a one-off lump-sum settlement.
Part of my healing process was to leave Australia for periods of time and have respite in South East Asia.
I have made many terrible mistakes and decisions since with investing - panic selling as well as misguided advice.
I have moved back over to South East Asia to spend more time here and respite. I am still unsure what I want to do or where to live.
Problem is:
I own an individual share portfolio and managed funds consisting of other managed share portfolios (put money into funds to avoid the terrible panic driven decisions I made by self managing).

I now understand (if correct?) that if I become a non-resident (if I were to remain as an expat overseas),

* My shares and shares in funds would all attract the non-resident tax penalties. As I understand it, that means
i) not entitled to Franking Credits in dividends/Distributions
ii) Any sale of shares or units in funds would attract Capital Gains Tax at the non-resident tax rate - no entitlement to the CGT discount after 12 months,
iii) no tax free threshold (on income tax return) and higher rate of tax.

* My investment property would incur a capital gains tax at non-resident rate and no capital gains tax discount if I sold the property. Rental income will be taxed at non-resident rate. Only if I returned to Australia to legitimately re-establish myself as a resident that I could then sell the property with a CGT discount (not sure if this discount would only apply on a pro-rata case based only on my time in Australia as a resident?)

* My Superannuation fund is safe from non-resident tax implications (It is an Industry fund, not a Self Managed Super Fund).
i) I have already maxed out contributions in concessional ($25k) per annum and non-concessional ($300k carry forward provision - cannot contribute until after 3 years) that I converted to a pension (currently minimum 4% drawn down per year)
ii) I cannot open a Self Managed Super Fund (as a resident) to move portion of share/managed funds because already maxed out allowed contributions to Super Fund and if deemed a non-resident I cannot contribute more to a SMSF, cannot open a SMSF.

* Nominated address issue - Other issue is that I live with my parent when in Oz, and that address is where I nominate my share related mail to be delivered to (you must nominate a physical address when buying shares). When my parent passes on (sadly), I will be left homeless because the property will be sold as inheritance.

I cannot afford to buy a place, or rent in Australia due to my very low income stream (comparative to old age pension). So an actual physical address in Oz in the future has become a real issue if I become a non-resident.
So is there a solution to being able to nominate a physical address for shares (they send documents and not always emailed)?
I move about in South East Asia so nominating an overseas address is not feasible and I am trying to hold off being deemed a non-resident as long as I can and not sure about what I want to do. I still am considering being permanently placed back in Australia 'if' I became well enough and could work again (deemed Total Permanent Disability). I am just too unwell to sort anything out and financial advisers have just confused me with mixed opinions.

I pay lots of taxes, rates and other fees in Oz. My bank accounts are there. And the non-resident rules are so damned confusing I don't know if and/or when I would be deemed as such.

Hoping there are some people here in a similar position or have knowledge etc. This is giving me a lot of anxiety and worry because if/when I am deemed a non-resident then my income stream will be seriously reduced to a level where I just cannot live off. It is like a Catch 22.

Appreciate kind advice. Cheers.

 

Who are the beneficiaries of the estate and why does the property need to be sold? e.g. to settle outstanding debts? Will you be receiving some or all of the net proceeds?

Don't know how you hold off being deemed a non-resident, but for the mailing address, can you use a friend's, or an accountant's address?

 

Don't have any friend in Oz that could accept that and siblings estranged. Accountant - with large company and doubt they would accept receiving personal mail. Have spoken to expat here who has share related mail sent to his personal accountant but he has a SMSF converted to pension so he does not have to worry about being a non-resident. Will look into perhaps a personal accountant later. Thanks.

 

Beneficiaries are me and siblings. Not huge amount. Will help a bit though.

 

What SE Asia country are you hanging out in, out of curiosity? I assume Thailand?

 

When you became a non-resident you could have declared capital gains, even without disposing, so that then any future capital gains on the disposal of the shares could be CGT free

 

Yeah that's correct. But truly not sure for how long and where I go to next. Back to Oz to stay somewhere seems more and more the only option but rent will wipe me out.

 

My residency status is not determined yet. I haven't surpassed 180 days yet and my intentions are not clear. I feel like I need to return to Oz but don't know where.

 

My managed funds, buy and sell shares and one fund is very active with lots of transactions. I have no idea as to whether it is a bad idea to have them or not now, but my investment options for income have run out. If I don't know my residency status as well how can I declare capital gains ahead? And my income streams from dividends are very important for my ability to live without selling down my assets. Confused and anxious like crazy.

 

Back to become tax resident of Australia again. Take advantage of resident tax rates.

And you don’t have to be in Australia to remain as tax resident afterwards.

 

Sorry, don't understand. Back to Australia but then leave again? Just coming back to Australia from my understanding does not automatically reset you as a resident (if deemed a non-resident) and then going back overseas - the same issue is still there, that eventually you become a non-resident.

 

The biggest advantage I found as a non-res was that I didn't have to declare or pay tax on any capital gains I made from trading shares. I've got rooms on the Gold Coast for $200pw if you want to stay there

 

Thanks. I am a long term holder, not a trader, so I rely on income derived from dividends as opposed to buying and selling frequently. I rely on dividends for income.

I am a terrible trader, tried that but my PTSD condition makes me not mentally equipped to short term trading. Agreed that the exemption from CGT would be good. Losing franking credits is nearly half of the dividend payments. Massive reduction in income from that investment.

Thanks for the offer. I am stuck overseas now and there is about 30,000 trying to get back. And costs of quarantine, flights etc equate to about 10% of my annual income stream = massive cost. I won't be back for some time. I will keep you in mind thanks. regards,

 

Yes, you can declare as tax resident again when you’re back? And, when you leave in the future, you can choose to stay tax resident even though you’re not in Australia

 

If I was a non-resident and came back to Australia to stay then I suppose you need to let them know (or your accountant).
But you cannot just choose yourself if you are a tax resident or not if you go back overseas. That is up to the Australian Tax Office to decide. They can say you are a non-resident. But it is very confusing how they decide.

 

Yeah, I’m not 100% sure as well how they decide. But I have a friend who stay tax resident even though he’s not in Oz. He’s like you, just report dividends from shares promptly after year end as income.

 

Thanks Mulianto. yeah, I have met a few Australian expats who have been overseas for a long time but say they are still Australian tax residents and are taxed as residents. But I do not want to just guess everything might be okay for 1,2, 5 years etc.