Would like to ask any australians who are trading US futures, what taxes they incur? Contemplating moving to Australia and interested to learn what is the difference between US and Australia tax code in regards to financial trading.
Not a very good time zone for us markets. The us stock market opens at midnight in austrlia. Where are you now?
Why, it's perfect for several reasons. If you trade position swings on an end-of-day basis, only need to be up early in the morning when US markets close, and will have full day for other activities. I'm in Russia now.
You just pay income tax on net gains. Tax rates as follows for individuals: 1-6000: nil 6001 -20000: 17cents for each $1 over 6000 20001-50000: $2380 + 30 cents for each $1 over 20000 50001-60000: $11380 + 42 cents for each $1 over 50000 60001 and over: $15580 + 47 cents for each $1 over $60000 You can also trade through a private company, the company tax rate is lower. This is only useful if you wish to reinvest some gains, as you are taxed again as an individual when you pay yourself a dividend.
You also pay a goods and services tax of 10% on everything you buy, which you can claim back on business expenses, but not personal expenses. It is a very highly taxed country. How come you are planning to come to Australia? Either you must have a lot of money or you're marrying an Aussie. Otherwise you won't get residence. The Australian government are a pack of bastards. Runningbear
Indeed. I think I would own a company, hire myself and deduct various expenses as business expenses. Otherwise all trading will probably occur in another offshore entity that my partners own. hehe The former heh You know, I didn't hear a single person to praise their own government ever. Out of which I conclude there are simply no good governments anywhere.
To complete the picture, there is also another tax - Medicare Levy, which is 1.5% of all income. The link to our equivalent of the IRS is www.ato.gov.au If you are an Aussie individual, then there are no US capital gains taxes payable on US stock / futures. However, I don't think that is the case if you trade through an Aussie company. You would have the hassle of paying US taxes, and then asking the Aussie Government for a rebate for US tax paid. Also, our tax year ends on June 30 each year, which further complicates tax liabilities should you decide to trade through a company.
Can you not pay franked (ie tax-paid) dividends, so they are tax-free (or at least, mostly tax-free) in your hands?
The corporate tax rate is about 39 cents in the dollar, so most people set up a business and pay themselves a salary of about $25,000 on which they pay less than 39c in the dollar. You can also employ your wive and kids and pay them a similar salary. You then pay the corporate rate on the rest of your company profit. If you have money, the best bet is to set up an IBC offshore and use a foreign broker. As both the trading company and your broker will be outside Australia, you will be untouchable and pay nothing on capital gains. Particularly if you transfer the money to your offshore before entering Australia. Runningbear