How Does Tax Work on Foreign Shares in Australia | Explaining Foreign Investments & Tax

[@EthanRooshock]

Do you invest internationally?

[@EthanRooshock]

@@infamousghostmoney Thanks heaps for watching, appreciate the support!

[@financegrowthjourney9002]

Thanks for sharing, always interesting to see how taxation varies on capital gains across political systems :)

[@EthanRooshock]

Thanks for watching!

[@wethinkfinance4071]

I don’t live in Australia; however, this was very informational. Thanks for sharing. ☺️

[@EthanRooshock]

Thanks heaps for watching!

[@amorenx]

Great video thank you! When you say it has to be converted to Aussie dollars, which date you use for the conversion rate? The different dates when the dividend was paid or the stock sold? The date when you are lodging your tax return? And average rate for the fiscal year?

[@EthanRooshock]

No worries! The date should be the date it was received or sold. You can normally find the daily exchange rates through the ATO website links. There are times when you can use an average rate. Have a read on the ATO website, they have some good stuff surrounding this.

[@amorenx]

@@EthanRooshock Cheers mate!

[@EthanRooshock]

@@amorenx No worries!

[@FernandoGonzalez1965]

Hi Ethan, what about taxes on overseas investments say ETF after retirement in Australia, how i that taxed? As I know, after 67, the tax is Zero on all dividends and CG? is that the same on US ETFs?

[@EthanRooshock]

What do you mean the tax is zero? Not in Australia.

[@RyanProvan]

Great video as always Ethan! Really interesting topic!

[@EthanRooshock]

Thanks Ryan! Yeah I think some people expect it to be much more complex!

[@AaronHamkins]

Loving the content!

[@EthanRooshock]

Thanks!

[@SageFinance]

I prefer investing in Australian domiciled ETFs for international shares. The FANG etf is my biggest holding and best performer 🙂

[@EthanRooshock]

Yep it makes it much easier! Yeah I bet it would be!

[@SageFinance]

@@EthanRooshock it would be more if the Aussie dollar didn’t rise so much against the USD 😂

[@MA-hb3le]

For example with us companies, we have to pay 15% capital gain tax to US, and if your Australian income bracket is 37%, do you offset 15% from 37%? And would end up giving 18% tax to ATO??? And if you hold your share longer than 1 year, does cgt still applies and you would end up paying half of 18%? I.e 9%tax??? Please clarify this

[@EthanRooshock]

So what would happen is you would use the tax you've paid in a foreign country as a foreign tax offset in the Australian tax return. Your Australian tax return would still show the full amount of the income, but there would be an offset that would reduce tax payable. Yep still eligible for CGT discount. This is based on the total gain, not the gain less offsets.

[@quadmoose]

Is it not true that there are capital gains implications for foreign stocks aswell - for instance, if I don't have a valid W-8BEN form on file for my US stocks, I'll be subject to 30% withholding tax upon sale??

[@EthanRooshock]

Depends on the country as to whether there could be tax implications there. Those taxes paid would then sit as a foreign tax credit.

[@prii1701]

Hi, thanks for your video. I have a question about exchange rate for conversion. The exchange rate is based on the dividend paid out date?

[@EthanRooshock]

Yeah that's correct!

[@prii1701]

@@EthanRooshock thanks so much for your reply. I was confused about this

[@EthanRooshock]

@@prii1701 No worries!

[@Jimbo6845]

Hi Ethan I need your wisdom with currency changes and how and when they are tax simple example below. E.g. if I change $1000aud to $600USD (0.60aud/usd) Then the rates change to 0.70aud/usd I buy $600usd of tesla shares the rates changes again 0.80aud/usd I sell my tesla shares for $800 the rates changes to 0.90 aud/usd. And then covert all the money back to AUD. When are the taxable events for the difference in the currency changes.

[@EthanRooshock]

Taxable events are when you buy and sell the shares, based on the AUD values of both. Changing from AUD to USD isn't a taxing event.

[@Jimbo6845]

@@EthanRooshock from my understanding if I convert some money to USD from AUD for share trading then that money gets transferred back to AUD to my Australian account and I made a profit on the change in currency value then that would need to be calculated in my tax return. The difficulty is when there is a fluctuating rates when you buy shares in on overseas account (e.g commsec International) as when calculating the capital gain on the shares the conversion rate is taken into account at buy and sell. In the above example how would you calculate the capital gain from when converting to USD, buy and sell shares then covert back to AUD? Cheers

[@EthanRooshock]

@@Jimbo6845 Sorry I can't give any more specific advice via KZbin

[@Jimbo6845]

@@EthanRooshock Well when you get a chance it would be a good idea for a youtube video as it would be the only one out there 😉

[@ThaoNguyen-up1ob]

Hi Ethan, obviously I m a bit slow in trading. Thanks for an insight video. Just a question please, I trade a platform in Belgium with US currency, who should I pay tax to, Belgium, US or Australia? Tx in advance

[@EthanRooshock]

Depends where you are a tax resident to.

[@ThaoNguyen-up1ob]

@@EthanRooshock I m an Australian and tax residency in Australia

[@EthanRooshock]

@@ThaoNguyen-up1ob Then you pay tax in Australia. Speak to your tax agent.

[@kwanhofu2968]

thankyou for explaining these

[@EthanRooshock]

No worries!

[@Frugal101]

Really informative

[@EthanRooshock]

Thanks for watching!