International move, investing, super questions...

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  coolsteps on 05/01/2017 - 03:22

  i thought you should be able to take i all out if you are moving overseas permanently. have you asked your super fund?

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    1ch1go on 05/01/2017 - 16:25

    Only if you are in Australia under temporary visa even then the tax to take them out is a lot and you can only withdraw once you're out of Australia.

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  bluesky on 05/01/2017 - 04:13

  You are right, as citizen or PR, your super remains subject to the same rules, even if you are leaving Australia permanently.

  I am worried about leaving the money in there permanently since I know the government already has the right to seize money in an an account that has been inactive for 5 years. If they can do that, is my super safe if I am out of the country for 20 years before I can access it?

  It will be in the super fund you are currently with, subject to super regulations. This is not the same as a bank account that is inactive for several years. So your worries are unwarranted.

  Only option I can see is transferring it to a self managed super fund and buying a house but that also seems not ideal.

  But there is administration involved, I am assuming you will want to play an active part in your SMSF. And having to handle it from overseas, is not ideal either. Also, for $100K super, the relative costs of maintaining the SMSF fund can be rather high, relatively-speaking, compared to keeping it in your existing fund.

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    1ch1go on 05/01/2017 - 08:38

    +1

    There are rules in becoming a trustee of an SMSF and one of them is called residency rules. You may breached this rule if you move back to Canada for an extended period of time. Read up here:

    https://www.ato.gov.au/Super/Self-managed-super-funds/In-det…

    As for your super, as long as you update your super provider with your Canadian address then you should be fine. The only time super is transferred to the ATO and potentially may end up with the govt is when it becomes lost super. Read it up here:

    https://www.superguide.com.au/boost-your-superannuation/lost…

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      bluesky on 05/01/2017 - 13:51

      Good point about residency rule and adherence. So to add complication, the SMSF further needs to be set-up in a way to get around this, by having more members whom OP trusts.

      If an SMSF trustee is going overseas, consideration should be given to the following issues:

      If an equal number of trustees is located in Australia or overseas, the ATO will accept that the fund is ‘ordinarily’ in Australia as long as each of those domiciled trustees /directors ‘substantially and actively’ (not passively) participates in the CM&C (Central Managment and Control) of the SMSF.

      This means that if it is a single member SMSF and the non member trustee will be staying in Australia, or if there are 4 trustees and 2 will be staying in Australia, there is generally no problem, from a CM&C perspective, regardless of the length of the overseas stay, so long as the resident trustee(s)/director(s) are substantially active in the CM&C.

      So seems like SMSF is really not a good idea.

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  Dacs on 05/01/2017 - 06:46

  I am not a financial advisor but if this was me:
  I would first contact a financial advisor in Canada before making any changes or learn to do it myself.

  If I wanted invest the 250k in stocks/bonds/ETFs I would open an account with Interactive Brokers*. That way I could transfer the money into the account (in AUD) then invest it in a range of investments in Canada and the rest of the world. In doing that the AUD would be converted to CAD (or whatever currency the investments are in) at midmarket rates with fees of only a few dollars.

  If I wanted to keep the 250k liquid rather than investing in stocks/bonds/ETFs I would shop around for the best rates at Ozforex, Currency Fair, XE, etc and would expect to lose 2% or less.

  Against investing in Aus is the fact that the exchange rate is predicted to worsen.

  Maybe, maybe not.

  Someone initially told me there is a way to pull out my super if I prove I have permanently left but I realized that isn't true since I am a citizen now and not a temp work visa.

  I know a couple who immigrated to Australia and became citizens. In 2011 they moved permanently back to their home country and were allowed to withdraw their super.

  Edit - *Interactive Brokers is international so you can continue using them once you're in Canada.

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  Cheap Steve on 05/01/2017 - 06:51

  Your super is safe and can't be seized by the government.

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  Colombian on 05/01/2017 - 09:27

  Care to share reasons for moving back to Canada? I'm also an Australian Citizen with Canadian PR and have to make a decision of whether to stay or move in the next 2 years.

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  Skramit on 05/01/2017 - 14:00

  Send your super to me, I will look after it for you whilst you are gone.

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  blimpyboy on 06/01/2017 - 00:25

  I'd suggest a force field analysis of pros vs cons should sort this out for you.

  In favour of leaving the money in AUS:

  a 3% loss on exchange

  Yep, though as others have already mentioned, for $250k, you should be able to find exchange rates with <2% loss, probably even <1%.

  I have about 250k that is liquid

  On the off chance that you don't have all $250k in actual cash, you're not fully liquid, and need to factor the cost of actual liquidation (such as spread, brokerage fees, etc.) into your force field

  In favour of transferring the money to CAN:

  the headache of filling income tax in 2 separate countries every year.

  A valid concern. Work out how much your time is worth, and multiply it by the number of hours you expect to spend on extra admin

  Shouldn't be a factor:

  Against investing in Aus is the fact that the exchange rate is predicted to worsen.

  Says who? If it was a certainty, it would already be included in the current exchange rates. Nobody knows for sure what will happen next.

  Other considerations, could end up on either side:

  Do you have access to investments in one country that are unavailable in another? E.g. do you have family in one place that you would like to invest in a property with, or do you have a business you could part-own? I wouldn't worry about shares and similar investments in this line of thinking; those are accessible globally.

  What are the tax implications of keeping the money or investing in either country? I seem to recall that Australia and Canada have a tax treaty, and that use residency for tax purposes when calculating your obligations, but I don't know for sure (since I've never had to research this). You should definitely find out, since it's possible that the tax implications alone could make one option a clear winner.