Make sure that you are as savvy with your finances

as the locals are

The rules and regulations governing financial matters vary depending on which country you are in.

Some may seem straightforward – but others may appear confusing and complex if you are not used to them.

It’s important to get a handle on the Australian financial system quickly, as not doing so could be costly.

There are numerous money issues to deal with, so to help you get up to speed we’ve summarised two big ticket items every new Australian should know about.

Retirement planning with Superannuation Funds

Superannuation is an investment approach that has been designed to help you save tax and have more money when you retire. If you are working for someone else, your employer must contribute on your behalf.

You can also decide to contribute money to the fund yourself as it may be tax effective for you to do so.

Some people may decide to set up a superannuation fund, known as a Self Managed Superannuation Funds (SMSF). There are many governing rules as to how these are set up and run, so it pays to get advice to make sure it’s set up right and that your investments are well managed.

Transferring your funds

Many people migrating to Australia ask a financial adviser such as Tynan Mackenzie, to transfer their existing balances (e.g. 401 k or a UK Pension) to an Australian Super Fund.

A financial adviser can help explore your options to do this and whether the tax advantages will make it worthwhile.

Paying tax

You are probably quite familiar with paying tax – most countries in the world have a tax system. It’s used to fund public benefits like infrastructure, health care, and benefits for everyday people.

Income tax

When you earn an income, whether from employment or from your investments, you are taxed on those earnings.

Employers automatically take tax out and pay it to the Government before you receive your pay.

Before you are able to access the benefits listed above you will need to arrange a Tax File Number through the Australian Tax Office, and lodge a tax return each year (failure to do so may incur a penalty).

Capital gains tax

When you dispose of certain assets for a profit, you may attract what’s known as a Capital Gains Tax (CGT). Importantly, CGT only arises when you actually dispose of an asset. If you do not dispose of an asset, CGT does not apply, no matter how much it has grown in value.

The rules around what is and isn’t exempt can be confusing, so it’s best to get advice before making a decision.

Details of all of the taxes in Australia can be found at  www.ato.gov.au. There are many ways in which you can structure your finances so that you can manage your tax obligations. A financial adviser can help you do that.

Get Advice

The smartest thing you can do is get advice as soon as you arrive. That way you have all the information to know you are making the right decisions with your money.

Knowledge is power – to find out more visit www.understandingmoney.gov.au.

Information supplied by:

Tynan Mackenzie

Phone: 1800 250 444

Email: info@tynmack.com.au

Website: www.tynanmackenzie.com.au