US ETFs?

DifferentialTim · 16 October 2019

Hi, just a question of investing in US etf's from the aust ASX. After buy and sell, what happens at tax time? Do you have to fill out forms for tax separate to give to the US? or does your accountant do all that.

peter2 · 16 October 2019

If you are an Aust resident and buy US financial instruments your broker will ask you to fill in an 8-WBEN form. This form represents a tax agreement between US and Aust allowing you to pay all taxes owed to the Aust ATO instead of the US IRS.

DifferentialTim · 16 October 2019

peter2 said:
If you are an Aust resident and buy US financial instruments your broker will ask you to fill in an 8-WBEN form. This form represents a tax agreement between US and Aust allowing you to pay all taxes owed to the Aust ATO instead of the US IRS.

Ok, thanks i read about that form so that seems easy. So after you filled in that form and buy and sell lots of times. Do you still get your profits at T+2 ? and what happens next or what happens at tax time?

peter2 · 16 October 2019

The T+2 is an archaic Aust broker tradition of holding your money for as long as they can. Should be scrapped in this age of electronic transactions. At tax time if you're an Aust resident you convert all your US wins and losses into Aust dollars (at the time the trade was completed) and include overall gains in your annual Aust tax return.

DifferentialTim · 16 October 2019

peter2 said:
The T+2 is an archaic Aust broker tradition of holding your money for as long as they can. Should be scrapped in this age of electronic transactions. At tax time if you're an Aust resident you convert all your US wins and losses into Aust dollars (at the time the trade was completed) and include overall gains in your annual Aust tax return.

Thanks, so besides the form fillout, i dont have to do anything more different and can include all OS etf's with aust etfs and work out total gain or loss and time held for discounts ect? but how does the ATO know they are aust or OS ones and work out diff tax rates or is it all calculated the same rates?

Thanks

peter2 · 16 October 2019

Not OS ETF's, my comments only refer to US financial instruments. The ATO's main concern is that all your capital gains (US and Aust) are included in your annual Aust tax return. You'll pay the applicable Aust tax rates.
If you want to trade and invest to take advantage of tax discounts then you'll need to be much better informed. The ATO website will have all the information that you need.

DifferentialTim · 16 October 2019

peter2 said:
Not OS ETF's, my comments only refer to US financial instruments. The ATO's main concern is that all your capital gains (US and Aust) are included in your annual Aust tax return. You'll pay the applicable Aust tax rates.
If you want to trade and invest to take advantage of tax discounts then you'll need to be much better informed. The ATO website will have all the information that you need.

Many thanks for the info
Tim.

Sir Burr · 21 October 2019

Hi Tim,

Bit of extra info here too...
http://passiveinvestingaustralia.com/fund-domicile-and-avoidable-us-taxes

US ETFs?

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