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Society of fools

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Everything posted by Society of fools

  1. Yup. Basically you have to relinquish your US citizenship in order to cease paying US taxes. Even this is a difficult and protracted process, and hugely unfair to many people who never asked for their American citizenship in the first place. Back in the sixties and seventies, it was common for either Americans or Canadians to use a hospital to give birth on the other side of the border if the maternity hospitals on their side were packed. So many Canadians were born on the US side of the fence, which meant they were automatically US citizens, a development in which they had no choice and which back then meant almost nothing. I even heard of a French woman who had never been to the US somehow picking up US citizenship through her American parents, who had moved to France. She only found out about it when the US embassy in Paris contacted her about it when her parents died and she had to do some tax work connected to her inheritance. But the waiting time for relinquishing US citizenship is long. I heard that in Ottawa its now more than 15 months before your appointment with the US consul to lose it can be executed.
  2. Nope Shlomo, you lose tax residency if you leave your country and move elsewhere on a more or less permanent basis. You are then liable for taxes in the original country only on income or capital gains ( sometimes) that you make in that original country, not on anything you make outside it. Each country assesses tax residency differently and Australia for the last 80 + years has had one of the harshest regimes, because they don't look simply at what your ties are to Australia, but also what your ties are to the other country you claim to be living in. In recent years this has meant that a very aggressive ATO has been auditing expatriates who in several cases have lived overseas for a decade, and then claiming that they are in fact Australian tax residents and need to pay back taxes on everything they have earned in places like the Emirates, Hong Kong etc, where income tax is either zero or very low. This idiocy culminated in a recent case named Harding, where Harding, an Aussie who lived in Bahrain for 6 years, had a habit of changing his (rented) apartments in Manama every two years or so. The ATO picked up on this, and claimed that this was an indication of a "merely temporary or transient connection to Bahrain", therefore he retained his connections to Australia, and therefore he should be paying Aussie Tax on his tax free Middle Eastern Salary. Incredibly, the ATO took Harding through multiple judgements and appeals all the way to the Australian High Court, which threw the case out at the end of 2019. I guess after that the Australian government finally decided to change the law to something more modern, but as a I said, even the proposed new law is one of the harshest tax residency regimes in the world outside of the USA.
  3. Watch out for Rishi's next clever idea on HPC. The thread will be called " What other props can the government possibly implement even if house prices start dropping apparently irreversibly ? What could possibly save the Housing situation even if there were sky high interest rates, a falling currency, and people leaving Britain ? " The best ideas will be put to cabinet and implemented forthwith.
  4. I don't post on HPC very often, but I have to say, as a morale booster, this thread is definitely one of the best one's going, and always improves my mood. Nothing like living proof that property investment is not always a one-way bet, even if some of the discounted prices are themselves utterly ridiculous.
  5. You're welcome. You ever heard of a guy named Andrew Henderson ? Talkative yank who wrote a book called " Nomad Capitalist" urging Westerners ( mostly) to decamp their ever more intrusive and heavily taxing regimes in favour of moving nomadically over the course of a year between places like Montenegro, Turkey, Malaysia and Mexico. Buying a home in each place ( where real estate is pretty cheap incidentally) and following the seasons. I would expect that as the UK, USA, Australia, Canada, France, Germany etc start taxing their citizens ever more, this approach will become ever more popular amongst those people who have balls, brains, a certain amount of cash and a sense of adventure. Australians, though, would probably fight the concept on the basis that there is no place like home.....
  6. I might add that the Australian government doesn't seem to give a flying f*ck how its legislation affects expatriates. Its become a very insular country. Just look at the passport ownership figures. In the 80's and 90's, close to 90% of Australians had passports. Its now down to 57%. And considering a lot of that 57% only use their passports to go to Bali and New Zealand, the proportion of Australians who actually do real international travel is now lower than it has been for decades. An interesting phenomenon that as globalization has gripped the world, Australia has become a much more insular and parochial place.....
  7. Nope that rumour is not well founded. In fact only this past May Australia announced in its annual budget that it would reorganize its tax residency regulation, which is long overdue as the legislation governing this aspect of Aussie taxation life has been largely unchanged since the 1930's. The new proposed framework will have a "bright-line" days test to make somewhat of an objective criteria to ascertain who will be liable to Australian taxes. The days test is much harsher than the UK's tax residency regime though, and basically means that any Australian citizen who has an Australian bank account and spends 45 days or more in Australia in any year will be liable for Australian taxes on their global income. Considering that Australia at present imposes a 14 day quarantine on any incomers this is pretty harsh. You're left with 31 days if you do a single trip to the country in a year. And two trips under the present regime ? Forget it. There is another aspect of the proposed new legislation that appears pretty harsh, and that is that any Aussie who goes overseas to work in a country which does not have a double tax treaty with Australia, for example Hong Kong, or the United Arab Emirates, or Qatar, will retain their Australian tax residency for 3 whole years. ( I think Holland has a similar scheme) There is a get out clause but from brief reading it also seems pretty harsh, as in you have to organize yourself long term employment contracts ( over 2 years) and also long term accomodation in the place of work etc. Neither of those may be easy to organize in some parts of the world. So yeah, the new legislation needs some tweaking before it would appear to be competitive.
  8. Appreciate the tip. Truth is I am so disgusted at the real estate bubbles blown up in half a dozen locations around the (mostly English speaking) world and the constant lies and deception from TPTB that supports them that there is a vast psychological distance between my contemplating a real estate purchase and actually doing it. I actually have a fair bit of Gold, the real metal ( don't trust ETFs) but the fact that it is presently soaring is making me more nervous than just about any other financial development out there. Gold only soars rapidly when there is something seriously wrong with the foundations of the global economy.
  9. The exact same thought has occurred to me. I have several hundred thousand pounds in British banks. And my wife also has substantial cash savings in the UK. We are now seriously considering buying a property just to potentially cover our arses. But let's take this thinking one step further. If some of the banks collapse on a very large scale in the massive recession to come, how much will your property be valued at then ? You might have saved 60% of your cash value sitting on Real Estate, but its better to keep 100%. There has to be a better way to preserve wealth than taking a leap and buying a massively over-valued tangible asset.
  10. I do remember at the time of the Skripal poisoning there was a discussion on the BBC World Service where the BBC journalist was asking a City of London financial expert if there was any way that Russia could be "punished" for its egregious behaviour. The BBC journalist suggested that one way to get the message through to Moscow might be to prohibit Russians citizens or their connected corporations from buying British real estate. The instant, almost panicky rejoinder from the financial expert was to respond "That would be just cutting off our nose to spite our face". I laughed out loud.
  11. Unfortunately no. The British ruling class have developed the present social security system over a long period of time and have no wish for it to change. And brits themselves seem to prefer it, along with never-ending HPI. When I lived in France- about 15 years ago- there was a law that said that a French banker who approved a mortgage loan for more than a three times a French worker's salary could go to prison. I think a lot of British people would react to that sort of law with horror. How could house prices ever rise if that sort of legislation was in place ?
  12. Excellent observation. The difference between the French social security system and the British system is complete night and day. I worked professionally in France for some years before moving to the United Kingdom, and if I had wished- upon completing my four year contract there- I would have had close to 12 months of government payments in France at more than 75% of my previous executive salary. I thought it was a marvellous scheme not simply because it was so generous but also because it allows French workers who are being unfairly treated by their employers to tell their bosses to go ****** themselves. British workers are much more at the mercy of their employers, especially if they have heavy debts.
  13. There was an Australian Prime Minister named Paul Keating who reputedly said " If you're living in Australia and you're not in Sydney, you're camping". This is BS as concerns Australia, any one of the big five mainland capitals + the Gold Coast present an excellent lifestyle. However, in the case of Auckland compared to the rest of New Zealand it would actually be true. As for the rest, agree totally. 20% of the NZ economy is tourism, and that's going to be shredded for 2020 and probably a chunk of 2021 as well. Real estate prices are going to diiiiiiiiiive......??
  14. Hopefully nowhere near to Auckland. New Zealand has blown a property bubble in some parts of the country that is bigger than anything that could be found in Sydney, Melbourne, London, Oxford or Cambridge. A little of the froth has come off since Ardern banned foreigners from buying Kiwi real estate but it still has to come down a loooooooong way to be reasonable value.
  15. A hundred upvotes to your post Mr Dorkins. I think for many people HPI has become some sort of substitute life that compensates for all kinds of other inadequacies such as a lousy marriage, high blood sugar, social interactions that consist mainly of grunting to a neighbor and wondering how the ****** the family can ever move to another location for a better job. I've seen how people react to their house falling catastrophically in value before, back in Perth, in Western Australia about 10 years ago ( incidentally house prices in Perth have not yet recovered and are now falling even further) and it was like Margaret Mitchell described the southern plantation owners after the American Civil War. Their entire world had just fallen apart, so they were walking around like the ******ing living dead. ( Not her words of course)
  16. And I would suspect the next Winter of 2021/2022 also. These things historically speaking tend to play out slowly, with the 2007/2008 falls being an exception. I remember reading about Hurricane Katrina, and one author pointed out that the previous Hurricane to hit New Orleans from some years before was mooted to be a massive people killer but in the end did ****** all damage and killed nobody. That first hurricane, he said, killed more people through Katrina because people had the living memory that "Hurricane warnings are BS. Its going to be fine." In retrospect it was a massive missed opportunity not to let the housing market fall significantly- and I mean down 35%-45% rather than 15%- in 2007/2008, followed by a rapid bounce back. Many millions of people have now been utterly convinced that the government has it within its gift to avert House Price falls. Its simply not true.
  17. I am too. It is touching in a way just how deep the psychosis of HPI is baked into the British Psyche, as is the general notion that "the government will protect my housing investment". Nobody has felt much pain yet. Too much of the country is on a heroin drip of cash handouts and funny money. Isn't the first step to resolving a problem recognizing that there is a problem in the first place ? No pain ? Means no problem. We have created a Society of Fools.
  18. Wasn't it Einstein who said that the only two things that were truly infinite were the Universe and Human Stupidity, and that he wasn't actually sure about the Universe ?
  19. I wish the so-called Bond Vigilantes were real. So far they seem more like a Staffordshire Terrier rolling on its back presenting its soft belly to be lovingly scratched, and that seems to apply to basket case economies like Italy just as much as better credit risk countries like Australia. I am, however, watching with more interest what will be taxed here in the UK a little way down the line. I simply will not believe that you can borrow half a trillion GBP without making at least some semblance of a notion that it will be repaid. Sure, you can trash the pound, but I think the UK has historically speaking/politically speaking resisted that course more than some other countries. Australia, for example, doesn't have the slightest problem in crushing the AUD in order to save its bacon in times of trouble. I well remember the Sydney Olympics, back then, one US dollar would buy you two Aussie dollars, straight out. And Canberra embarked on this deliberate policy of smashing its own currency without the slightest trace of embarrassment. ( I expect them to do the same thing in the next 12 months as well)
  20. Why are you guys so impatient ? I don't know the UK housing market as well as you, but in past Australian recessions, house prices didn't bottom until more than 2 years after the recession started. I think you've all been spooked by the V shaped HP recovery after the recession of 2007/8, but the UK government had many more tools at its disposal then, and interest rates were far higher to start with. The government locker now is pretty well bare. I will admit that the public sentiment has not changed. I am utterly amazed at how brainwashed the British populace is about house prices, its like a form of mass psychosis. ( Australians are similar incidentally, at least in Sydney and Melbourne) and that is the greatest barrier to a HPC. But once the dam wall breaks , that psychology will take a battering. But this HPC is not going to happen overnight.
  21. I think the most telling quote I have heard reported about Trump is what he said when was landing in Air Force One in Baghdad and all the lights in the plane had to be dimmed so nobody would try and blow it out of the sky. Trump's reaction was to ask one of his advisors how much the USA had spent on Iraq related affairs, both War and Peace, since 2003, and heard the response: "$5 trillion USD" To which his response was " We spend $5 trillion USD on a country and we still have to fly in in complete darkness because they hate us so much" Trump is indeed a clown, but he knows a lousy foreign policy deal when he sees a cost benefit analysis presented in such obvious terms. GW Bush would have simply brushed that kind of thing aside as no consequence. I'll bet that Hilary would have as well.
  22. Actually, with a 20% HPC, by 2025 or so, there will be the 1 in 25 which has fallen 40-50%, from the 2017/19 highs. I would expect it to be considerably more than 1 in 25, especially in non-GBP £ terms. I get paid in a very hard currency, fortunately.
  23. Precisely Yup. That about sums it up. Having made it a point in my investing life never to buy an overvalued asset, I now have enough liquid cash to buy a good property entirely mortgage free, and in a nice part of London. However, I don't have the slightest intention of doing so. Why ? Because London property is seriously overvalued. When the prices drop to what I consider fair value, which would be 30%-45% less than they are now, then I'll consider investing in that sector.
  24. In this globalised world, and because both the United Kingdom and Australia run large immigration programs, many people now get their new passport in either country and then leave. So people can in fact end up going three ways. I haven't lived in the UK since 2012, I'm in the Arabian Gulf region now, where a British passport is far more respected - and generally gets a much higher salary offer- than an Australian one. And I work with a Pakistani and a Chinese guy who both have Australian passports. None of us are certain if we'll ever return either to our country of origin or our new country of citizenship, but the new passport helps with the choices. They are thinking about retiring to Thailand or to Bali, where Australians are favoured I was thinking about retiring to Gibraltar. I shouldn't have too much trouble doing that with a Brit passport.
  25. That's an interesting topic iamnuerate actually, and probably for another website. As many migrants will tell you, the grass actually is much greener on the other side based on your profession and also your heartfelt interests. Say you're British, you have an excellent degree in mining or alternatively, you are a doctor, (just a plain GP), or you're even just a garden variety plumber or electrician. You also love the sun, the beach, cheap fresh steak and you don't mind everyday street conversation where every second word is ****** and you'll be surrounded by urban architecture in places like Sydney and Perth compared to which Los Angeles looks like ******ing Prague. I will guarantee you that when you move to Australia your salary will double in real terms and your quality of life will be far better than anything you could find in Britain. (That is, you would have before the Aussie housing bubble really took off that is) There's a flip side to that coin as well, which sees thousands of Australians head the other way. I had an excellent degree in corporate Law and a good MBA, I also spoke three languages besides of English fluently, and had a wife who loved fashion, theatre, cold weather, and Medieval buildings. What the ****** would we do in Australia except bounce off the walls and wonder what it was all about ? The natural home for people such as myself is definitely in Europe, of which the UK is the easiest country to migrate to. My salary tripled when I came to London compared to Sydney, and the responsibilities I had in the British corporate world far outweighed anything I could have ever strived for in Oz. Its a smaller economy Down Under , and there's less room to rise up there before you hit the " you need to know somebody to progress further" ceiling.
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