Posted by
runnergal
14 yrs ago
Hi Folks,
In the future I am thinking of buying shares in the Australian stock market.
I am an Australian, but am no longer a resident (have been away from Australia for 14 years) and don't pay any tax there anymore. There are some shares that I would like to invest in however on the AUS market.
I am wondering if there is anyway that I can buy shares in the Australian market through a Hong Kong broker?
If so, when I sell those shares, am I right in thinking I don't need to pay capital gains tax to the Australian government on the money I make as long as the stocks are all sold through Hong Kong?
Thanks!
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If you are a non-resident for tax purposes, then you don't need to pay any taxes in relation to the capital gains derived from Australian shares. It doesn't matter where you opened your brokerage account. You can open a brokerage account with HSBC, Hong Kong or Comsec in Australia. The commission charges are higher in HSBC, HK compare to Comsec.
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Thanks Ms Yeung,
i asked HSBC just today if I can buy shares on the Australian market through my HSBC account and said only if I have a Premier account (need to have 1,000,000 in my account for this). I don't have this account. (and really, why on earth would you have 1,000,000 in HSBC in the first place i have no idea).
Anyway, will try Comsec. Thanks for the advice.
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Ok...i did a bit more digging into this and rang up the Australian tax office. Ms Yeung, I am afraid you are wromg.
If I buy through Comsec (the commonweath bank of australia) i need to pay capital gains tax. I can either request that they take out withholding tax (10%) at the time of selling the share or I need to put in a tax form and as a non-resident I would pay around 30 cents in the dollar.
It gets a little bit more complicated if you buy through a broker in Hong Kong. The taxation officer seemed to think that if I buy shares on the Aust stock market I need to tell my broker that I am a non-resident and they will set up the withholding tax or again, I need to put in a tax return.
In other words, there seems to be no way as an Australian to get out of paying capital gains when buying Aust shares.
If anyone has any experience that is contrary to this, I would be VERY interested to hear it.
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You are wrong, not me. The 10% withholding tax rate applies to dividend received from shares or interest but not capital gains tax. Ringing up the ATO doesn't mean that you will receive a correct answer from the officer. If you ring up again on Monday, the possibility that you receive a different answer is high. Check out the ATO website or ring up a Tax Advisor should you require more information.
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Hmmm....if you were in my position, would you listen to a random poster on a message board or the ATO?
i appreciate your advice and will look into it more.
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Talk to a tax specialist instead of relying on some outsourced ATO helpdesk or strangers on a forum. Some people are so cheap to pay for good advice.
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MJ1
14 yrs ago
If you are a non resident for tax purposes, you won't need to pay capital gains tax on any gain relating to buy/sell of Aussie shares, regardless of where the execution takes place.
The withholding tax would only be applicable to dividend income you received from the shares. However, if the dividends are fully franked, then the withholding tax will be nil.
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